City of Carmel sends cease and desist letter to Airbnb hosts

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The City of Carmel has sent letters to several homeowners who listed their homes on Airbnb and similar short-term rental web sites, telling them that they are in violation of city zoning laws and that they have 10 days to cease operations or file for a variance.

Airbnb is an online resource for renting out a room or an entire home for a short-term period. Some consider it similar to running a bed and breakfast but only during select dates that the user chooses.

The City of Carmel said they’ve received numerous calls and e-mails from neighbors complaining about Airbnb hosts operating in the city.

Glenda Pilcher, a member of the Cool Creek North Neighborhood Home Owners Association, said a house in the neighborhood allegedly was purchased for the sole purpose of being operated as an Airbnb listing, which angered some.

“There are a group of neighbors that are very upset, and so we’ll have a meeting about that,” she said. “All I know is what people have told me, but we’ll look into it.”

City Councilor Sue Finkam, who represents that area, said neighbors are concerned about safety and increased traffic.

“They’ve developed a community there and they don’t want to disrupt that,” she said. “I support our zoning laws and err on the side of public safety.”

Finkam said neighbors said they have nothing against Airbnb but were particularly concerned that the owners of the house wouldn’t be living there.

Carmel Mayor Jim Brainard has previously told Current that he believes that all Airbnb hosts need to have their homes rezoned as a commercial business because it’s unfair to hotels who go through that process and pay higher taxes.

“Businesses such as our local hotels must invest a lot of money to meet the requirements of their zoning and be able to legally operate as a hotel,” states the city’s letter to Airbnb hosts. “Because of that, we don’t believe it is fair to our hotels to allow someone to operate a competing business when they are not held to that same higher standard of construction because of their zoning classification.”

Airbnb spokesman Ben Breit said his company is working with many municipalities to address these types of issues.

“Carmel’s host community wants to pay their fair share, and we want to help. Along those lines, we are engaged in productive conversations with officials throughout Indiana to pay local taxes,” he said. “Additionally, we ask all hosts to follow their local rules and regulations. At the same time, we are working with communities like Carmel to create fair, progressive rules for home sharing.”

Indiana State Rep. Matthew Lehman has authored House Bill 1133 that would prevent cities from banning short-term rentals such as Airbnb. Home Owners Associations could still prohibit short-term rentals. City Councilor Jeff Worrell said he hopes that legislation doesn’t pass.

City Councilor Bruce Kimball said he thinks banning Airbnb listings versus limiting the number of days might make Carmel look “old school” to millennials and tech companies, many of which use Airbnb frequently.

According to an October 2016 report of AirDNA, a site that tracks Airbnb usage, there are approximately  87 active listings in Carmel. The average daily rate is anywhere from $166 for one or two guests to $1,904 for nine or more guests.

The City of Carmel is asking residents to report any Airbnb activity by contacting the City of Carmel’s Dept. of Community Services at 317-571-2417.

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