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Fishers could become the first Indiana community to cap the percentage of single-family rental houses in the city’s subdivisions.
Chief of Staff Jordin Alexander presented a plan Monday to members of the Fishers City Council detailing a program that would require landlords to register rental homes in Fishers and receive a permit that would remain valid until an owner decided to sell. The plan would limit the number of single-family rental units to 10% per subdivision.
Houses that are rentals before the ordinance would be grandfathered in and would not subject to the 10% cap until they are sold to a new owner, who would be required to register the home.
Landlords who do not register a house would be subject to a fine. An application would be denied if a subdivision has reached the 10% limit.
The Fishers City Council is expected to hear the proposed ordinance introduction in either February or March.
“Really, this conversation boils down to the fact that single-family rentals are still increasing, and that’s not just something we’re seeing here locally, but something nationally as well,” Alexander said.
Fishers has been studying the topic of single-family rental houses since 2022 when the city worked with Philadelphia-based Urban Partners to produce a housing survey. The survey resulted in a 117-page report on the city’s housing stock.
The trend of out-of-state investors buying single-family houses began in 2008 during the Great Recession, and it has accelerated in Fishers since 2020.
Alexander presented statistics that indicate that more than 2,500 houses in Fishers are single-family rentals. That represents 8% of all single-family houses in Fishers and 30% of all rental units in the city.
Of those 2,500-plus houses, 1,186 are owned by out-of-state landlords and 583 are owned by corporate investors. Nationally, 3.8% of all single-family rentals are owned by institutional investors.
“That’s figuring in small communities, medium and large, but it does give you an idea that we are much higher here in Fishers than what that national average is,” Alexander said.
Relating to the proposed 10% cap, Mayor Scott Fadness said some neighborhoods in Fishers consist of 30% to 40% single-family rentals and that 50 neighborhoods are currently at 10% or higher.
Some homeowners’ associations have more restrictive rules regarding the percentage of rental homes. Fadness said those HOAs will be able to keep those guidelines in place.
“We’re not trying to be the most restrictive,” Fadness said. “We’re just trying to make sure that none of these neighborhoods tip the scale into where they’re going to 30% and 40% or 25% rental.”
If the City Council approves an ordinance this year, there would be a 10- to 12-month introduction period to allow landlords to register their properties without any fines. There would also be a 90-day period after the ordinance is approved before the 10% cap would go into effect.
City officials will hold meetings with HOAs around the city.
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Laughable.
Fantastic ! We need this in Noblesville too.
For local people who want to buy and hold a couple rental properties for investment, this isn’t good. It restricts where someone can buy and potentially takes away a qualified buyer.
The good part about it is controlling out of state investment pools that don’t do a good job of maintaining properties and controlling the actions of the people they have rented to. I’ve seen neighborhoods that were once good and now are trash because of the amount of rentals. This drags down properties values for the people who live in those neighborhoods.
There are plenty of qualified buyers out there. Removing homes from the ownership pool is probably more of a bad thing than good regardless of who the buyer is. The one exception is someone investing in a rental in the same neighborhood where they live…then they have eyes on and a double incentive to keep the property and renters in line with community standards.
As you point out, starter home neighborhoods full of rentals go to trash quickly once the tipping point is reached.
I feel there needs to be some nuance to this rather than some kind of blanket 10% rule. The local resident who wants to buy a couple of properties in the neighborhood, or is moving on to another home but wants to keep their current home as a rental shouldn’t be penalized. Capping ownership by large corporations or out of state entities to something like 5% would make more sense to me. I realize there would be a lot of details needed to be fleshed out to prevent one large corporation from creating 1000 smaller entities of 5 homes a piece for instance, but I feel that residents investing in their own cities, towns and neighborhoods is something that shouldn’t be hindered.
I wonder if there will be an attempt at pre-emption by the State Legislature. The out-state “freedom from regulation” caucus and the new governor may object.
If Republicans actually cared about lowering the costs of home ownership for the people who voted for them, they’d be on the leading edge of this.
But big corporations write really sweet campaign contribution checks.
Agreed, Trump and Braun will side with wall street. I think it makes sense to get corporations out of owning large pools of housing nationwide. Homeownership is one of the best ways for an average person to create wealth. Competition for houses from Wall street has helped to drive up prices.
Agree Phil!
This is very smart. Good for them.
Please take a look at this article to see what is happening in Indiana.
https://www.wrtv.com/news/local-news/report-nearly-half-of-rental-homes-in-5-indiana-counties-are-owned-by-investors#:~:text=INDIANAPOLIS%20%E2%80%94%20The%20Fair%20Housing%20Center,a%20decrease%20in%20home%20ownership.
If Marion County proposed this, the state legislature would trip over themselves banning it.