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Indianapolis Star

Fishers council approves rental caps as legislature moves to override action

The Fishers City Council unanimously passed a first-of-its kind ordinance that restricts the number of homes that can be rented in subdivisions, in a move to stop institutional investors from purchasing houses at inflated prices and making them rentals. The 9-0 vote came after real estate interest groups made a last-minute push to nullify the ordinance in the Indiana General Assembly. Lawmakers attached to an unrelated bill a provision that would prohibit cities from limiting rentals. The surprise addition to House Bill 1389, which was discussed in a conference committee Monday morning, would need lawmakers from both chambers to sign off on it before a vote. At a packed Fishers City Hall meeting, residents were allotted 30 minutes to speak about the rental cap, with more than half saying they favored it but a sizable number clapping for those who opposed it. Those in support said they'd seen their subdivisions degraded by investors who paid high prices for lower valued homes, rented them, and neglected their maintenance, 'My job is to sell homes to people who want to buy them in desirable locations in the community,' said Fishers Realtor Jennifer Rice. 'All these rentals make neighborhoods undesirable. You have to be in the field to see this.' Opponents said the ordinance illegally limited what homeowners could do with their hard-earned property. 'It is not your right to say if I move next year…I can't rent my home,' said Marti Brown, a Sandstone neighborhood resident. 'It is baloney. It is un-American.' The administration of Mayor Scott Fadness and council worked one and a half years on the plan to address the local and national trend of outside investors gobbling up homes. Fadness said the rental cap would help keep lower-priced houses in the market because those are the ones most often targeted by Wall Street investors. That will give first-time buyers, who are typically younger with less wealth, a chance to own a home in Fishers and build equity. The ordinance would also establish a registry for landlords to make them more responsive to renters or city complaints. Opponents said Fadness and the council's work is outdated because the surge in institutional investors has subsided: the last one sold to an outside firm in Fishers was January of 2023. They also said it could severely limit the number of rentals available in county that already has an huge shortage and needs them for a growing number of lower-wage service workers. 'As we have shown, market conditions have changed and institutional investors have sold more homes over the last two years than they have purchased," said Chris Pryor, chief advocacy officer for the Metropolitan Indianapolis Board of Realtors, at the meeting. 'This is a trend that is likely to continue.' MIBOR and the Indiana Association of Realtors opposed the rental caps while the One Zone Chamber of Commerce, covering Hamilton County, supported the ordinance and called it 'thoughtful and strategic approach to ensuring long-term neighborhood stability and housing market balance.' Fadness said the corporate buyers could be back in the future and called the measure forward looking. 'What it means for the long-term ability of young people is to build wealth,' he said at the meeting. 'We want a viable stock of housing for starter homes.' Most of the councilors, explaining their votes beforehand, said they have been swamped with calls from constituents in favor. Councilor Todd Zimmerman said the city was taking a bold stand in the face of monied outside interests. Other cities have addressed the problem in various ways but Fishers officials found none that have used rental caps. 'As a nation, if somebody doesn't take a stand who will?' Zimmerman asked.' At some point somebody has to take a stand when there is land being bought up by foreign and domestic entities who are taking way the livelihood and opportunity for people to build their wealth within their homes, within their families.' Fishers' 240 subdivisions have varying levels of rental rates, most lower than 10% but about 50 have rental rates much higher, some reaching 40%. But Vare said some of the city's numbers on high rental rates in misleading. For example, of the 17 Fishers neighborhoods exceeding 30% rentals, 11 are condo or townhome communities, including three that were recently built as for-sale units. While some homeowners associations set their own rental caps, others don't address it all and still others don't bother because covenant rules usually require unreachable voting majorities The ordinance has several exemptions for people who want to rent even though it would exceed neighborhood's cap, including having had the house on the market for at least six months. Other exemptions include: Job relocation Renting to family members or legal dependents Deployed military Selling the property will cause undue burden. The ordinance will take effect Jan. 1, 2026.