State Makes Huge Mistake Blocking Rental Caps

Okay, let’s talk about a column. Speaking of the Indy Star—we touched on them earlier—our old pal Jacob Stewart, columnist for the Indy Star, has a piece out today. He’s actually going to join us later this week to talk about it. But it dropped this morning, so go check it out at IndyStar.com. And like I mentioned earlier, I’ve got a column coming out later this week as well—about the Mid-States Corridor, the pushback in southwest Indiana, and how people are outraged because they see the governor as potentially being one of the big financial winners of a project that could cost taxpayers billions. I think you guys are going to love it. But back to Jacob Stewart. His column today is about the state of Indiana banning Fishers and Carmel from putting rental caps on subdivisions. So a couple years ago, Fishers and Carmel said—look, we’re getting complaints from residents. And we’re seeing it ourselves. More and more homes are being bought by for-profit mega corporations. And those corporations are turning them into rentals. And those rentals aren’t being maintained the same way as owner-occupied homes. Not the same level of care, attention, upkeep. Homeowners noticed. They wanted something done. So Carmel and Fishers put in rental caps. I believe it was 10%. No more than 10% of homes in a subdivision could be rental properties. Well, the rental giants didn’t like that. Now look—there are plenty of good, local landlords. People like Ethan Hatcher, a friend of the show, who owns a small number of properties and rents them out. That’s not who we’re talking about. We’re talking about massive, for-profit corporations—often backed by venture capital—that are buying up large numbers of homes. And if you go back to 2020, one of the big reasons housing prices spiked was because money got really cheap. These corporations had access to way more money than regular people—and at better rates. So they could outbid families trying to buy homes to actually live in them. And then they turned those homes into rentals. I’ll never forget this. My now-wife and I were looking at homes in 2020. We found one we liked. But we thought there might be an issue with the roof. We went to the open house on a Saturday. I looked at it and said, “Hey, I like this place, but we need to get the roof checked.” The realtor told us—we had until Monday. I said, “Monday? I can’t even get someone out here that fast.” They said it didn’t matter. They’d have enough bids by then. Someone would buy it as-is. Even with the roof issue. And looking back, that was probably one of these corporations. They’d buy it, fix it, rent it out. The mortgage didn’t matter to them. They were getting money so cheap. Meanwhile, regular families couldn’t compete. That’s a big reason prices went up. So Stewart’s column talks about the damage from all this. After Carmel and Fishers passed those caps, the rental lobby went ballistic. They started lobbying lawmakers. Putting pressure on them. And lawmakers responded. They passed a law banning communities from setting rental caps. According to Stewart, it was buried in a 418-page bill—House Enrolled Act 1210. 418 pages. How many lawmakers actually read that? Out of 150? Probably not many. Stewart also points out how rental properties drive up costs. In Carmel, the average rent for a single-family home is about $2,700 a month. That’s three times what I’m paying for my house right now. It’s about four times what Jason is paying. And look—I don’t live in a mansion. You guys know that. We’ve talked about it. I live in a modest brick ranch on about a third of an acre. But we take care of it. We keep it up. Cut the grass. Keep the weeds down. Maintain everything. There’s pride in ownership. People know—that’s where my family lives. I want it to be nice for my daughter. I’m invested in it. Now compare that to rentals. The average rent for an apartment or condo in Carmel is about $1,900 a month. So single-family rentals are about $800 more per month on average. And this ties into a bigger conversation—property taxes. Stewart talks about how rentals can destabilize neighborhoods. Now look—I rented for years. There’s nothing wrong with renting. Pete the Planner—you guys know him—we’ve talked about this before. For a lot of people, especially younger people, renting makes sense. You don’t have to worry about maintenance. You’ve got flexibility. This isn’t about renters being bad. But renters typically aren’t there long-term. That’s different from homeowners. Homeowners invest in their neighborhoods. My dad’s been in the same house for 40 years. My neighbors across the street—45 years. I’ve lived within about a mile of the same area my whole life. I know the people. I know the neighborhood. When I was a kid, almost every house was owner-occupied. They were well kept. People took pride in them. Now, more and more of those homes are becoming rentals. And you can see the difference. Lawns aren’t as maintained. Trees aren’t trimmed. The overall care just isn’t the same. Rental properties don’t reward stability. They don’t reward long-term investment in a community. And the same thing is happening with property taxes. Think about how regressive that system is. Someone like my dad—living in the same home for decades, never selling, never cashing out—he’s probably paying four or five times more in property taxes than when he bought it. Why? Because other people sold. Other people cashed out. Some sold to rental corporations that drove up prices. So who gets punished? Not the people who sold. The people who stayed. We’ve created a system that punishes stability. It punishes people who do the right thing—buy a home, invest in it, take care of it, become part of the community. And this rental cap debate ties right into that. Look—there are arguments on both sides. But ultimately, this should be a local decision. If the people of Carmel or Fishers see a problem and want to address it with a policy—something everyone knows about when they move there—they should have the right to do that. Instead, the state stepped in. Another example of the state putting its thumb on communities it doesn’t really understand.