Fishers and Carmel Take Action to Limit Single-Family Rentals in Local Neighborhoods

Fishers and Carmel are making headlines with new measures to limit the number of single-family homes that can be rented out in each neighborhood. These ordinances, pitched as a way to preserve community character and protect homeownership opportunities, are also stirring debate about housing affordability, property rights, and the future of rental markets in Hamilton County.

On April 21, 2025, the Fishers City Council unanimously passed Ordinance 022425A, establishing a hard cap: no more than 10% of single-family homes in any given subdivision can be non-owner-occupied rentals. Subject to certain exceptions, every landlord must register their property with the city and obtain a permit. Enforcement begins January 1, 2026, with fines ranging from $250 up to $7,500 for violations.

On the same day that Fishers passed its rental cap ordinance, Carmel introduced a nearly identical ordinance, also proposing a 10% cap on single-family rentals per neighborhood. Carmel’s plan, still under consideration, includes exemptions for hardship cases, such as military deployment, job relocation, or inability to sell after six months.

City officials in both Fishers and Carmel cite a surge in out-of-state and corporate ownership of single-family homes. In Fishers, 47% of all single-family rentals are owned by out-of-state investors, and 25% by institutional investors-some owning over 1,000 properties. The concern is that these investors can outbid local families, reduce homeownership rates, and, in some cases, neglect property maintenance, undermining neighborhood stability.

Not everyone is convinced by proposed rental restrictions. Real estate professionals and housing advocates have raised several critical concerns about potential rental caps. They warn that rental shortages could worsen, potentially driving up prices and allowing large investors to benefit at the expense of everyday renters. Historical data from Fishers neighborhoods with existing rental caps suggests that home values may stagnate, showing lower appreciation rates compared to the city average. Moreover, some critics argue that such restrictions represent a significant infringement on property rights, potentially constituting government overreach that could invite legal challenges. There are also fears of unintended consequences, with investors potentially redirecting their attention to higher-end or less-regulated neighborhoods, which could paradoxically exacerbate existing affordability issues in other parts of the city.

Fishers’ ordinance is set to take effect on January 1, 2026. Carmel’s proposal is still under review, but early indications suggest strong support among city officials. Whether these measures will protect neighborhoods or create new challenges for renters and homeowners is a debate that’s just beginning.

If you have any questions relating to these city rental restrictions and how they might impact you, or if you have questions about rental restrictions for your neighborhood, please contact McNeelyLaw LLP by calling (317) 825-5110.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation. 

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