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Mayors and realtors clash over local rental caps as legislature weighs statewide preemption
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Summary
Testimony split sharply over a House amendment in HB 12-10 that would preempt local ordinances capping single-family rental units. Fishers and Carmel mayors urged preserving local authority; the Indiana Association of Realtors and other housing stakeholders urged preemption to protect private-property rights and housing supply.
Lawmakers heard heated testimony on proposed statewide limits to local rental-cap ordinances after witnesses described sharply different local experiences.
Mayor Scott Fadness of Fishers urged the committee to reject an amendment that would prevent local governments from limiting the share of single-family homes used as rentals. Fadness described two months of public engagement that produced a unanimous city-council ordinance capping rentals at 10% per neighborhood, a registration regime and exemptions for owners temporarily away for work. He told the panel that investor-owned homes in Fishers are “65% more likely to have code enforcement violations” and that a neighborhood in Fishers had 41% investor ownership, which he said motivated local action to preserve homeownership opportunities.
“Homeownership is really important for the middle class,” Fadness said, explaining the local policy choice and asking lawmakers to preserve local authority rather than preempt it.
Maggie McShane, senior vice president of government affairs for the Indiana Association of Realtors, asked the committee to keep the House amendment that would preempt such local ordinances. McShane argued that capping single-family rentals at 10% would shrink available rental stock statewide and could cause shortages if replicated broadly. “If something like this were enacted in every community, in fact ... we would immediately see about a shortage of about 30,000 units of available rental property,” McShane told the committee and warned of unintended supply-side effects and fair-housing concerns.
Other witnesses including Prosperity Indiana raised narrower concerns and offered policy fixes, such as limiting the preemption language to ‘residential rental properties’ or adding a landlord-nexus requirement that would require out-of-state investors owning multiple units to have an in-state manager. Senator Cadora pointed to Senate Bill 104 as a possible complementary approach to create a licensing or nexus requirement for large out-of-state owners.
Committee members repeatedly pressed both sides on data and consequences. Senator Baldwin said he appreciated mayors’ on-the-ground work but noted the legislature must balance local experiments against statewide market effects. Senator Walker and others asked whether a carve-out for municipalities that had already enacted ordinances would be a potential compromise; Realtor representatives said singling out communities raises fairness concerns.
The committee did not vote and signaled the matter will remain under discussion. Witnesses asked for clearer statutory language to avoid unintended effects on short-term rentals, zoning, or other rules.
