Study committee endorses state pre-emption of local short-term rental regulations

The General Assembly's Interim Study Committee on Commerce and Economic Development on Monday recommended that state lawmakers next year pre-empt localities from adopting "any undue restrictions on the use of a person's primary residence as a short term rental."

Dan Carden, The Times

INDIANAPOLIS — Local governments in Indiana that currently do not regulate short-term home rentals soon may lose the ability ever to do so.

On Monday, the General Assembly's Interim Study Committee on Commerce and Economic Development recommended that state lawmakers next year pre-empt localities from adopting "any undue restrictions on the use of a person's primary residence as a short-term rental."

This could allow residential owners to offer their homes or condos to short-term renters.

The committee chairman, state Sen. Mark Messmer, R-Jasper, said his intention is that municipalities with existing ordinances reasonably limiting short-term rentals, particularly Lake Michigan beach towns, will be allowed to continue enforcing them.

However, the committee recommendation does not specifically endorse grandfathering the policies employed in Ogden Dunes and elsewhere that have been used to preserve year-round communities in lieu of becoming merely summer destinations.

Throughout the rest of the state, Messmer said he sees no reason why local governments should get to tell Hoosiers  they cannot list their homes on AirBnB, and similar short-term rental websites, to make extra money and promote tourism.

"We're not here to represent the local government; we're here to represent the people who elected us," Messmer said.

State Sen. Tim Lanane, D-Anderson, argued that the General Assembly should not insert itself, once again, between Hoosiers and their local governments, as it has in recent years to prevent localities from requiring a higher minimum wage than the state rate, or charging a tax for retailer use of plastic bags.

He said if the people living in a municipality want to prohibit or restrict short-term rentals to avoid turning residential neighborhoods into largely unregulated hotels, they should have the right to enact such an ordinance.

A similar pre-emption measure did not pass the 2017 General Assembly. It was referred to the study committee for further review.

The "aye" vote of state Sen. Randy Head, R-Logansport, made the committee's recommendation official after the panel earlier this month failed to secure the eight votes needed for approval.

Legislative rules provide that the General Assembly is in no way required to enact, or even consider, the study committee proposal when lawmakers convene in January at the Statehouse.

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Dan is Statehouse Bureau Chief for The Times. Since 2009, he's reported on Indiana government and politics — and how both impact the Region — from the state capital in Indianapolis. He originally is from Orland Park, Ill.