Airbnb Regulations: Indiana Exploring Law To Prevent Cities From Regulating Company

State legislators in Indiana are proposing a new law that would prohibit cities and towns within the state from placing restrictions and regulations on online home-rental companies like Airbnb and HomeAway.

The bill—brought by Republican lawmakers, who hold a majority in the states's House of Representatives and Senate—would prevent local governments from controlling how online rentals services can operate within city borders.

While the party proposing the bill often favors giving control to local government, it opposes doing so when it comes to Airbnb because cities would then be able to dictate what citizens can do with their own property.

"We are simply saying that if you own one of these, a local government cannot prohibit a short-term rental," Matt Lehman, the Republican representative who authored the bill, told the Associated Press. Lehman suggested local authorities can control rented properties through other means, including ordinances for buildings, noise and pollution.

The bill would place a cap on how many days a property can be rented out each year, limiting the owner to 180 days. It would also exempt homeowner's associations, which could still limit or ban their members from renting their property.

Members of local governments and home owners have opposed the bill, arguing it turns residential neighborhoods into commercial areas. Short-term rental homes can also attract unruly guests who cause problems for the neighboring residents.

The bill in Indiana mirrors one passed last year in Arizona that placed similar restrictions on local governments and their ability to regulate rental homes. Airbnb openly lobbied for the legislation in Arizona.

Because of the relatively recency with which these services have appeared, it's difficult to tell exactly what kind of impact Airbnb and other companies have had on residential areas.

Last year, a group of Democratic senators—including Elizabeth Warren and Diane Feinstein—pressed for the Federal Trade Commission to investigate the effects of short-term rental sites on the housing market.

"We are concerned that communities and consumers may be put at risk through violations of sensible health, safety, and zoning regulations under state and local law,” the senators wrote in a joint letter to the commission.

Airbnb has been accused of a number of harmful practices, including driving up property prices and disrupting communities. Users on the platform have also been accused of discriminating against renters for a variety of reasons including race.