Indiana’s legislature has taken a clear stand for property rights, moving to strike down local rental cap ordinances that threatened investor portfolios across the state’s hottest suburban markets.
If you own or are acquiring single-family rental properties in Indiana, the most important piece of housing legislation in recent memory just became law.
On March 12, 2026, Governor Mike Braun signed House Enrolled Act 1210, permanently stripping Indiana cities of the authority to cap rental density in residential neighborhoods.
For investors, this is a significant and clear-cut win.
What Fishers and Carmel Tried to Do
Starting January 1, 2026, the City of Fishers implemented an ordinance capping new single-family rentals at 10% per neighborhood.
Carmel passed a nearly identical measure. Both cities framed these as homeownership protection tools, and both passed with unanimous local support after years of public engagement.
The target, explicitly, was investor activity. Local officials pointed to large out-of-state investment firms acquiring single-family homes at scale and converting them to long-term rentals.
But, the cap applied to all investors. Even those with 1 property in their portfolio.
Indiana rental cap — full timeline
What the Law Actually Does
Governor Braun signed the bill on March 12, although the two local governments can continue to enforce their caps through January 2028.
That’s the key date to mark on your calendar: January 1, 2028 is when Fishers and Carmel lose all enforcement authority over their rental cap ordinances.
The vote was about as decisive as it gets. The final version of House Bill 1210 passed 91–3 in the Indiana House and 48–0 in the Indiana Senate before being signed into law. This wasn’t a close call.
Indiana’s legislature spoke nearly unanimously in favor of property rights over local restriction.
Under the new law, local governments are prohibited from adopting or enforcing any ordinance, resolution, regulation, policy, or rule that prohibits or restricts an owner of privately owned residential property from using that property as a rental.
What Cities Can Still Do
The law does not remove all local oversight. Local governments are still able to mandate registries, enforce building and fire codes, health and safety standards, and more.
Carmel has already indicated that they will continue mandating that rental properties are registered with the city. This is to allow a direct contact to the property owner if issues arise.
Can HOA's Keep Neighborhood Caps?
The law applies to local government only, not private HOA’s.
If you are looking to purchase a rental home anywhere in the state, but especially Carmel and Fishers, checking to see HOA rules for that neighborhood is critical.
Voting in HOAs may also be limited to those who use their property as a homestead. So investors may be easily out-voted for individual HOA caps.
What HOAs Vs. Local Government Can Control
* Fishers and Carmel may continue enforcing existing rental caps until January 1, 2028, after which all enforcement authority expires under HEA 1210.
What Happens Between Now and 2028?
In both Carmel and Fishers, rental properties that existed before 2026 were grandfathered in and are not considered out of compliance, even if the neighborhood they sit in is above the 10% rental cap.
When or if those properties change hands, however, the cities will no longer allow them to be used as rentals if their neighborhoods are still above the 10% mark — until 2028, when enforcement ends entirely.
What this means practically: if you’re acquiring a grandfathered rental in an over-cap subdivision in either city before 2028, understand that the city may attempt to block continued rental use upon transfer. After January 1, 2028, that leverage disappears completely.
The Bottom Line
Indiana has drawn a firm line: Your right to rent residential property you own is protected at the state level, and no city or town can override it.
The passage of HEA 1210, with near-unanimous legislative support and the governor’s signature, signals that Indiana intends to remain a state where property rights, not neighborhood politics, govern what you can do with your investment.
For investors active in Hamilton County and beyond, the message is straightforward: the regulatory threat that materialized in Fishers and Carmel in 2025 has been neutralized.
Mind the 2028 enforcement window for existing cap ordinances, continue your HOA due diligence on every acquisition, and factor registration compliance into your operating costs, but the ceiling on rental density is gone
