Indiana Lawmakers Approve Bill Standardizing Local Airbnb Rules

Published April 24, 2017

The Indiana Senate approved a bill blocking local governments in the state from preventing homeowners from using Airbnb and other peer-to-peer economy companies to connect with consumers seeking short-term housing accommodations.

The state Senate approved an amended version of House Bill 1133 on April 6 and returned the bill to the House for final approval. The legislation would prohibit local governments from targeting homeowners using Airbnb or other short-term rental businesses with additional housing regulations, such as minimum rental duration regulations or increased noise and parking regulations, beyond those experienced by other homeowners.

Creating Win-Win Situations

Benjamin Powell, director of the Free Market Institute at Texas Tech University, says the peer-to-peer economy, also known as the sharing economy, is an example of voluntary exchanges benefitting everyone.

“It involves buyers and sellers cooperating to make each other better off,” Powell said. “The new feature of the sharing economy is that it often utilizes technology to mobilize labor and capital that are otherwise underutilized, in order to serve others. Often, this is done as a side job. Examples include renting a spare room in your home or using your car to give someone a ride, both in exchange for money, just like any other economic transaction.”

Enforcing Property Rights Protections

HB 1133’s author, state Rep. Matt Lehman (R-Berne), says local governments’ infringements on homeowners’ rights prompted him to write the bill.

“I really began to see, in my opinion, local governments usurping property rights,” Lehman said. “If it’s my house, I should have a right to do with it what I want. If I choose to rent it out on a weekend, I should have that right.”

Equal Protection for Homeowners

Lehman says the bill would prevent local governments from treating homeowners using Airbnb differently from others.

“You can regulate them like everyone else in the community: for noise, pollution, public safety, traffic,” Lehman said. “All those things are still under local discretion. You just can’t do it more strictly for Airbnb than others.”

Lehman said lawmakers should not impede new options for consumers and service providers.

“It’s a changing economy and a changing world, and we need to be able to adapt,” Lehman said.