Carmel Indiana Passes 10% Rental Cap: What Property Owners Need to Know
On Monday evening, June 2, 2025, the Carmel City Council unanimously approved Ordinance D-2770-25, introducing significant changes for single-family home rentals within city limits. The new regulation mandates that homeowners who want to lease their properties must first register and secure a rental permit. More importantly, it limits rental permits to no more than 10% of the homes in any subdivision or across Carmel as a whole. This marks a major policy shift, affecting landlords, homeowners, and investors throughout the city.
With this ordinance, the ability to rent out a home is no longer guaranteed. Even long-time homeowners must now follow a formal approval process before leasing their property. If a subdivision has reached its 10% rental limit, new permits will not be granted, restricting rental activity in many neighborhoods. This applies to both short-term rentals, such as Airbnb, which Carmel already regulates, and traditional long-term leases.
The intent is to preserve neighborhood character, encourage more owner-occupied homes, and prevent investor dominance. However, this adds complexity for property owners needing flexibility to rent due to life changes like relocating or downsizing. The availability of permits and timing will be critical factors moving forward.
Realtor Association Expresses Concerns
The MIBOR Realtor Association responded promptly to the ordinance’s passage, voicing significant concerns. They described the council’s decision as a “serious misstep” that could have far-reaching effects on Carmel’s housing market. MIBOR criticized the lack of comprehensive data or thorough analysis prior to approval.
Before the vote, MIBOR had presented detailed data and policy suggestions to the city council, cautioning about potential negative impacts on housing affordability, neighborhood stability, and community access. They also highlighted the additional administrative work this ordinance demands from city staff, questioning whether the city has a practical plan for enforcement.
Despite these concerns, MIBOR remains committed to collaborating with Carmel officials to develop balanced, data-driven policies that protect property owners and foster a healthy housing market.
Comparing Carmel’s Approach to Fishers
Carmel’s new ordinance closely mirrors a recently adopted rental cap in the nearby City of Fishers. Fishers also requires rental property registration and enforces a 10% limit on rentals per subdivision. Fishers imposes fines for violations, including $250 for unregistered rentals and penalties up to $7,500 for exceeding the rental cap.
Applicants in Fishers must provide detailed owner information and designate a local contact, reflecting a trend toward more robust rental oversight in Central Indiana.
Mayor Sue Finkam of Carmel acknowledged the similarity and shared that the city is collaborating with Fishers and their technology partners to develop an effective permitting and registration system. She emphasized the significant administrative efforts planned over the next six months to implement the ordinance smoothly and keep residents informed.
What Property Owners Should Do Next
For Carmel homeowners, this ordinance means taking prompt action to understand rental permit availability within your subdivision. Permits will be granted on a first-come, first-served basis until the 10% limit is reached, making timely registration essential if you plan to rent. Investors and prospective buyers must now include rental eligibility verification as a standard part of their property evaluation to avoid surprises after purchase.
Monon & Main Property is dedicated to helping owners and investors navigate these changes confidently. We provide a free rental eligibility assessment and market analysis to determine your property’s status under the new rules. We’ll guide you through the permit process and help you understand your options amid this evolving regulatory environment.
Monon & Main is a local, relationship-focused property management firm serving Carmel and Central Indiana. We specialize in making real estate investing and property management transparent and manageable—even as policies shift. If you want to learn how the new rental cap affects your property or need expert help with compliance and strategy, contact us today for a consultation or your free eligibility review.
