Hamptons, North Fork tied up in web of short-term rental rules

Different regulations from town-to-town complicates market

(Photo-illustration by Steven Dilakian/The Real Deal; Getty Images)
(Photo-illustration by Steven Dilakian/The Real Deal; Getty Images)

In the Hamptons, the tourism sector is strong enough to attract visitors despite high prices and snarled traffic. Now homeowners — and the short-term renters they might hope to entice — have to navigate a patchwork of new and in-progress rules governing the practice of renting out their homes for the summer.

Rules are changing all around the state, but the East End has always been seen as an escape from the hustle and bustle of New York City, a safe haven where parties are tasteful, neighbors know one another and no one would rent to a dud. The perceived onslaught of investors is warping that view.

“Historically, young families that were fortunate enough to buy a house out here would spend the summer with Grandma and rent it out,” Jeanne Nielsen, the chair of assessors for East Hampton Town, told the East Hampton Star last summer. “Now those houses are being bought up by corporations. … No one knows who really owns them.”

The regulatory changes threaten hosts’ business if revenue they anticipated booking via Airbnb or VRBO does not materialize. And visitors to these communities may be forced to turn back to tried-and-true hotels. (In New York City, under similar regulations, hotels are taking advantage of the opportunity.)

And since the rules vary among communities, hosts in East Hampton aren’t facing the same scenarios as hosts in Southampton, while crackdowns differ in parts of the North Fork, like Southold. 

East Hampton

East Hampton only allows homeowners to rent out homes for two stays of no more than 14 days each every six months. And the town is aggressive when hosts don’t follow the rules.

East Hampton officials turned to subpoenas in 2022 as a way to find hosting companies’ payment records and root out illegal short-term rentals. Town Supervisor Peter Van Scoyoc had labeled them an “important tool” in enforcing East Hampton’s rental policy. Later, a judge nixed the use of subpoenas for that purpose. 

Without subpoenas, town inspectors are forced to knock on doors and question guests about the length of stays; hosts instruct guests to claim they are family members instead of renters to get around such probes. Out of more than 300 hosts who used Airbnb in East Hampton last summer, only eight were cited.

Southampton

In Southampton, those who want to rent out their homes must first get a permit and then commit to renting for at least two weeks at a time. Residents can rent out up to two bedrooms in a house to a maximum of two renters as long as communal spaces are shared; no rental permit is needed for that, according to a section on the Town of Southampton website

According to the town, it takes one to three weeks to obtain a permit, though the timeline may slow during the summer season. An official will inspect the home before a permit will be issued.

Southold

Last summer, the Southold Town Board began considering updates to the town code on short-term rentals, which are restricted to 14-day minimum stays. 

Sign Up for the undefined Newsletter

Violations draw a $500 fine, but the board was seeking a harsher penalty. It wanted to increase fines up to $10,000 for a first offense and $20,000 for a second offense, along with the revocation of short-term rental permits. Even 15-day jail sentences were on the table.

Other proposals were for homeowners to post their permits in their homes, or to include their rental permit number in advertising and social media posts. Town Supervisor Scott Russell separately pushed for keeping shorter stays in commercially zoned areas while increasing the minimum stay to 30 days in residentially zoned areas.

At the end of last summer, the Southold Town Board unanimously approved several changes, according to the East End Beacon, but not all that were being considered. There are no jail sentences, and the minimum stay is still 14 days, not 30. Penalties rose to at least $3,000 per offense.

As of last summer, Southold counted more than 800 listings on Airbnb and nearly 1,000 rentals in the town database.

Villages sometimes clamp down even harder than the towns they’re part of. Greenport, which is located in Southold, is implementing a new software system to search the web for illegal rentals and looking at its code in an effort to balance the needs of short-term renters with the communities they play in.

“For a few years, it’s been a bit of the Wild West,” Mayor Kevin Stuessi said in an interview. He expressed concerns about the “zombie homes” in the village that sit vacant between Labor Day and Memorial Day in part because investors like them for their short-term rental opportunities in summer but have no interest in trying to fill them the rest of the year.

Stuessi hopes that increasing regulation on short-term rentals in the village will spark a revival of other lodgings, such as bed and breakfasts.

Riverhead and Shelter Island

Forget about two-week stays in Riverhead. The town’s rental rule on short-term rentals doesn’t allow for stays of fewer than 30 days. Hosts have to shell out $300 for two-year permits.

That cost pales compared to the costs of violating Town Code Chapter 263. A first offense triggers a penalty between $250 and $1,000, or up to 15 days in jail. The jail sentence doesn’t increase with subsequent violations, but the fines can jump to $5,000.

Shelter Island, which currently permits stays of no more than 14 days, clarified in 2023 that accessory apartments couldn’t be rented short-term at all, confusing homeowners.

Around the Hamptons, the aftershocks of stringent short-term rental policies are massive. Business owners bristle at the strict new rules, which hinder tourism, while local inn and bed-and-breakfast operators take the opposite view, finding that harsher regulations allow them to reclaim some of the bookings they had lost to Airbnb and others.

So should the state try to step in and regulate short-term rentals in a cohesive way across New York, to clamp down on confusion for all? Stuessi doesn’t think so.

“[It] should be left to individual towns to manage,” Stuessi said. The conditions, he noted, are so different in each place.