Governor Mike Braun signed House Enrolled Act 1210 on March 12, 2026, and the headline write-up practically wrote itself: Indiana cities can no longer cap the number of rental properties allowed in a neighborhood, effective July 1. Carmel and Fishers, which had each limited rentals to 10 percent of homes per subdivision, now have until January 1, 2028 to unwind those caps entirely. For an investor watching the northern suburbs, that is real news.
For an investor underwriting a deal in Fountain Square, Garfield Park, or Irvington, it is almost entirely beside the point. None of those neighborhoods had a rental cap to begin with. The friction that actually governs a purchase on the near southeast side was never about how many rentals a subdivision could hold. It is a permit, a registry, and a set of neighbors who have spent three years making sure the city knows who owns what.
What HEA 1210 Actually Bans, and What It Leaves Standing
The new state law is narrowly written. It stops a city or county from capping the total number of residential rentals, and it shifts HOA voting power on rental restrictions to owners who actually live in their unit, cutting absentee investors out of that particular vote. What it does not touch is registration. Cities can still require rental owners to register a property, submit to inspection, and meet safety standards, as long as those requirements don't function as a disguised cap.
That distinction is the whole story for Indianapolis proper. The city's short-term rental program isn't a cap. It's a permit system, and it predates HEA 1210 by more than a year.
Indianapolis-Marion County's Chapter 852 ordinance took effect January 1, 2025, run through the Department of Business and Neighborhood Services. The fee is $150, one time, with no renewal charge under state law, and it applies per unit, not per owner. A duplex with two short-term listings needs two permits. That system was already in place, already enforced, and already untouched by anything the legislature did in March. If you're pricing a deal on the near southeast side using headlines about rental caps, you're solving the wrong problem.
The Registry Fountain Square Fought For
The permit program didn't appear out of nowhere. The Fountain Square Neighborhood Association had been collecting resident complaints about poorly managed short-term rentals since 2022, building a case that the city's biggest problem wasn't short-term rentals existing but not knowing who owned them. A meaningful share of the complaints traced back to a small number of properties, many held by owners who lived out of state and were difficult to reach when something went wrong.
That advocacy, paired with a broader coalition across the Historic Urban Neighborhoods of Indianapolis, is what got the registry written into code. The mechanics are straightforward once you know them. An owner registers, gets a permit number, and has to display it on every platform listing. If a property isn't registered, DBNS relies on the public to flag it. A neighbor calls, the department reaches out to the owner, and if the property is still out of compliance after that, it escalates to IMPD as a Class C infraction carrying a fine up to $500. As of March 2026, roughly 1,200 short-term rentals were registered citywide, and the city has said openly it knows there are more it hasn't found yet.
The full registry lives on the city's Landlord and Short-Term Rental Registries page, and it is worth a look before you assume a listing's Airbnb history transfers cleanly to a new owner.
What That Means for the Deal You're Actually Underwriting
Here is the part a median price will never surface. If you're buying a property in Fountain Square with an existing short-term rental income history, that income story depends on a registration that belongs to the current owner, not the property. You inherit the address. You do not automatically inherit the permit. Before you model a year of Airbnb revenue into your pro forma, confirm the registration is current, confirm it will transfer or that you can obtain your own without friction, and confirm the property hasn't already accumulated the kind of neighbor complaints that put it on DBNS's radar before you ever saw the listing.
This is also a neighborhood where that kind of scrutiny is organized, not incidental. Fountain Square residents built the enforcement mechanism themselves. An unregistered short-term rental here isn't operating in the quiet margins the way it might in a neighborhood without an active association. It's operating in the one Indianapolis neighborhood that made a multi-year project out of finding properties exactly like it.
The Cash-Flow Story That Already Moved
Even setting the registry aside, the deal in Fountain Square isn't the deal it was five years ago. By early 2026, median prices in the neighborhood were sitting in the mid-$300s, and days on market had stretched from the sub-10-day frenzy of 2021 to something closer to 30 to 40 days. Renovated two and three bedroom homes are renting in the $2,000 to $2,400 a month range. Run that rent against a mid-$300s basis and the yield compresses fast. This is a neighborhood that has shifted from a cash-flow story to an appreciation story, and the shift happened quietly enough that a lot of the "up and coming investment neighborhood" content still circulating online hasn't caught up to it.
That doesn't make Fountain Square a bad deal. It makes it a different deal than the one an investor might be underwriting from a five-year-old spreadsheet.
The lower-basis alternative sits a short drive away. Irvington, on the east side, was carrying a median price in the $180,000 to $230,000 range as of mid-2026, a meaningfully lower entry point with a walkable main street and a housing stock that still has runway. Garfield Park, immediately south of Fountain Square, occupies similar territory, with homes typically priced between $180,000 and $260,000 as its own historic housing stock continues to turn over.
| Neighborhood | Typical 2026 entry price | What's driving it |
|---|---|---|
| Fountain Square (core) | Mid-$300s, early 2026 | Renovated inventory, longer days on market, appreciation-led |
| Garfield Park | $180,000 to $260,000 | Historic stock still repricing, ongoing reinvestment |
| Irvington | $180,000 to $230,000, mid-2026 | Lower basis, more room for cash-flow math to work |
None of these numbers are a verdict on which neighborhood to buy in. They're a reminder that "the near southeast side" isn't one market with one entry price, and an investor comparing them on a single citywide median is comparing three different deals as if they were the same one.
Seasonality Is the Variable a Median Also Misses
There's a second layer worth building into any Indianapolis short-term rental underwriting, regardless of neighborhood. Citywide short-term rental revenue swings hard by season. As of April 2026, monthly revenue for an active listing typically peaked in May through August in the roughly $2,000 to $2,250 range, driven in part by events like the Indianapolis 500, and dropped to around $1,000 to $1,020 in January and February. That's a spread of more than $1,200 between the best and slowest months on the same property. Indianapolis also had 1,430 active short-term rental listings as of April 2026, up 85 percent year over year, which means more competition chasing that same seasonal demand curve. An underwriting model built entirely on peak-month numbers will overstate the year every time.
What This Means Before You Write an Offer
None of this argues against buying on the near southeast side. It argues for pricing the parts of the deal that don't show up in a listing description.
- Confirm the property's short-term rental permit status directly with DBNS before assuming any existing Airbnb income carries over to a new owner
- Model rental income on a trailing twelve months, not a peak summer month, given the seasonal swing between May through August and January through February
- Treat Fountain Square as an appreciation-forward hold and Irvington or Garfield Park as the better starting point if cash flow in year one is the priority
- Watch days on market as an exit signal, not just an entry signal. A market that moved from 10 days to 30 or 40 days changed your liquidity assumption whether or not it changed your purchase price
The state legislature just spent a session on rental caps that never applied here. The rules that do apply are quieter, and they were built by the neighborhood itself. Underwriting that difference correctly is the difference between a deal that performs the way the listing suggested and one that surprises you in month four.
If you're comparing entry points across the near southeast side, or anywhere else in the Indianapolis market, Estansion Group by BLP works both sides of this kind of decision, from sourcing and renovation timelines to the numbers that hold up after closing. Schedule a free consultation and we'll walk through the specific corridor you're underwriting.
