Let local market forces take over

Anytime an upstart business from the new “sharing economy” pops up, the establishment fights back, often with the help of government accomplices. The monopolistic taxi companies’ attempts to thwart Uber and Lyft are the most notorious example from the last few years.

And now the fight moves to vacation rentals, which are to empty spaces what Uber is to drivers and riders. Through Airbnb, people can rent rooms or even whole houses for short periods. Guess who doesn’t like it? The existing hospitality industry. Guess who’s helping with the fight? City governments.

The fight is on right now in Carmel, where city officials say renting out space violates zoning regulations.

And the General Assembly might get involved. A bill now in committee would prohibit local governments from stopping short-term rentals.

We appreciate the sentiment behind the bill. It recognizes that a new economy is emerging with tremendous benefits for all and that too many government rules and regulations can stop and kill budding businesses. Sometimes the best thing for government to do is to just get out of the way and let market forces take over.

But we’re reluctant to give the proposed legislation our strongest endorsement because it would be a big departure from home rule, even in a state like Indiana that has had a reluctant embrace of local control. “It’s terrible legislation,” says Carmel Mayor Jim Brainard. “It’s micromanagement of our local zoning, which we’ve done for decades in the state of Indiana.”

He has a point. Zoning is one of only a handful of government functions the state has been willing to stay out of. Letting Indiana sneak in here would set the cause of home rule back significantly.

So we would much rather see companies like Uber and Airbnb thrive because local governments are using common sense.

“Government power can definitely slow progress and make it harder for innovative companies to compete,” columnist and retired pollster Scott Rasmussen has written.

“Regulators will always serve the status quo. Free market competition, on the other hand, will encourage innovation and improve the lives of consumers. It’s the best form of regulation. The reason is simple: Consumers will seek out the option that serves their best interests.”

This was distributed by Hoosier State Press Association. Send comments to awoods@tribtown.com.