Carmel Neighborhood Takes the Lead On Banning Short-term Rentals

Writer & Photographer: Josh Brown

It is no secret that short-term rentals have been a hot-button topic for the past year in Carmel. Since January, the City of Carmel has been pushing back against the Indiana General Assembly on legislation regarding short-term rentals through companies like Airbnb.

Mayor Jim Brainard has argued that Carmel should be allowed to amend any city ordinances on short-term rentals and grandfather those changes in. But earlier in the year, the state passed a law stating that cities and towns cannot ban homeowners from renting their homes short-term or otherwise.

The topic has drawn the attention of several neighborhoods in Carmel. One neighborhood is taking matters into their own hands.

In June, the Cheswick Place Homeowners Association board officially passed a covenants change ruling that short-term rentals, like Airbnb, were not in the best interest of the neighborhood and would not be allowed. The neighborhood becomes one of the first in Carmel to pass such a covenant, and Cheswick Place HOA board member, Don Kellner, says it is a decision that nearly the entire neighborhood supported.

“This is not the type of community for an Airbnb, and with 95 percent of the accumulated votes approving this covenant change, the neighborhood clearly agrees,” Kellner says. “This is very much about protecting property value. If my next door neighbor turns their home into an Airbnb, it could have a detrimental effect on my ability to resale. The other issue is safety. We have a lot of kids in the neighborhood and people know who their neighbors are, but strangers coming in for the weekend have no knowledge of that.”

Getting the covenant amended and passed required two-thirds of homeowners in the Cheswick Place community to vote yes, and 95 percent of homeowners voted in favor of preventing short-term rentals. The amended covenant prohibits homeowners from renting out their homes for 30 days or less — still allowing long-term rental options.

It is a decision that came as no surprise to Julie Morton — a local realtor and co-owner of Carmel Homes Realty.

“I understand people having a concern with being in a neighborhood where people are renting out their home short-term through services like Airbnb because you are going to have a lot of turnover,” Morton says. “I’ve used Airbnb before, and they can be great, but they were in different environments. You just don’t know who is going to lease the house, and the HOA’s recourse is limited to the owner, not the short-term tenant. You buy a home in a neighborhood like this expecting residents to have a longer-term commitment to the community and one another. Realtors will become aware of which neighborhoods restrict such rentals and it will likely be a factor in homeowner purchasing decisions.”

As the Indiana state law currently sits, the decision of allowing or prohibiting short-term rentals falls upon each neighborhood’s HOA — leaving it up to the majority of the homeowners to decide. Morton, who is also a resident of the Cheswick Place community, says more Carmel neighborhoods are likely to follow Cheswick’s lead in passing similar amendments in the future.

“These restrictions are in place to protect the neighborhoods,” Morton says. “I think this will be something where other, similar neighborhoods will follow suit. Many of these HOAs are run by residents who are aware of this issue and this topic.”

Kellner says amending an HOA’s covenants can be quite time-consuming. While 95 percent of homeowners agreed with the amendment, getting them to actually vote is a different story and takes time and effort in educating neighborhoods on the topic.

For other neighborhood HOAs looking to begin this process in the future, Kellner says to be aware of the time commitment.

“Be prepared to go door-to-door for a number of weekends until you get enough people to voice their opinions and vote,” he says. “Every member of the Cheswick HOA board dedicated hours to knocking on doors and speaking with their neighbors. It does require a strong commitment of time and energy. But in the end, we feel that we served the neighborhood’s wishes, as well as helping to protect the value of our properties and the safety of Cheswick Place.”

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