Party's over: Airbnb law passed in Greater Lafayette Monday night

Both the West Lafayette and Lafayette City councils voted unanimously Monday night to pass an ordinance that will ban homeowners in residential areas from renting out their properties Airbnb-style.

The “transient guest houses,” as they are called by local government, have drawn increasing concern from neighbors recently. A staff report from a June Board of Zoning Appeals meeting referenced data that suggests transient guest housing has contributed to an estimated housing shortfall of 5,000 in West Lafayette.

Of particular concern in the staff report was that transient guest houses in the West Lafayette Community School Corporation don’t contribute to the school system, which is already the smallest by area in the county. City residents said guest homes don’t belong in neighborhoods – there are hotels to serve the same purpose.

“We support the residents who support the groceries and the fitness centers and the bookstores and the veterinarians, places that the visitors will never see,” West Lafayette resident Jill Stein said. “It's not that they aren't welcome. It's just that they can best support our local economy by staying in an actual hotel.”

“Capitalism has taken over with Airbnb,” West Lafayette resident Tim Word said. “It always works out for the Airbnb owner, but it never works out for the neighborhood.”

Lafayette entered the discussion last month when mayor Tony Roswarski asked that his city also be included in the zoning regulation, saying inspectors were noticing out-of-town home buyers looking to convert single-family neighborhood homes into rentals, and without the exemption required to do so.

“We have evidence that a lot of people are doing this without the special exemption,” he said at Monday night’s city council meeting. “They’re not even going through the process. And that has got to stop because we need to make sure we don’t have too many of these.”

The rental homes will only be banned in districts zoned for single-family residential buildings, and only if they operate as transient guest houses for more than 60 days per year. West Lafayette Mayor Erin Easter called these rental homes a “distinct issue in a college community.”

“We get frequent police calls from neighbors," she said. "And sometimes those range from just loud music to public indecency.”

Ann Arbor, Michigan was mentioned in the zoning appeals staff report as a comparison for West Lafayette. The home of Michigan University limited transient guest housing in 2021.

“We took up the issue in 2017,” Easter said. “The county passed countywide rules about how Airbnbs were handled through zoning. We already had a rental housing program, but we found it insufficient to handle all the issues we were having.

“At the beginning of last year, we adopted the special exception rule to require they go through a board of zoning appeals for special exception. But it was pretty commonplace they were approved regardless of neighbors’ concerns.”

A study by Purdue professor of sociology emeritus Richard Hogan suggests that less transient guest houses will free up more homes for families to live in, and in the long run reduce housing costs in the area.