A lawsuit challenging Shelter Island’s controversial short-term rental law was dismissed in federal court Friday, though those involved say the issue is far from settled.
The lawsuit claimed proponents of the legislation were trying to regulate the "type" of person who visits the resort town — which is only accessible by ferry and where the year-round population is less than 2,500 — and that the law violated their constitutional rights.
The plaintiffs, six women with interest in Shelter Island property who said they were negatively impacted by the law adopted in 2017, and the town agreed to dismiss the suit because Shelter Island amended its short-term rental law in June. A federal judge in March dismissed the major claims and town officials believe the new law addressed the remaining claims.
The plaintiffs have said that the new law is still too strict and that they may file a new lawsuit.
“We are considering all of our options, including commencing a new suit based on the even more expansive and intrusive new law that includes imprisonment as a penalty for violating any part of the law,” said plaintiff Michelle d’Arcambal, who is an attorney.
Violators of the law can face fines from $250 to $5,000 and up to 30 days in jail.
Municipalities have grappled with how to regulate short-term rentals in recent years with the growth of home-sharing websites. Short-term rental supporters say those stays allow residents to bring in extra income and support the tourism economy. Critics have expressed fear that they can commercialize residential neighborhoods on the sleepy island.
The previous Shelter Island law required a two-week buffer period between guest check-ins, regardless of the length of the rental. Among the changes the new law offered is a “Homesteaders Hardship” license that allows year-round residents who meet certain income thresholds to rent their home once a week between Memorial Day and Labor Day and once every two weeks the rest of the year.
The Shelter Island Town Board in June voted 4-1 in favor of tweaking the law, with Supervisor Gary Gerth voting against it, citing the need for more information.
The town had not enforced the previous law, Gerth said, but 122 property owners have registered since the amended measure took effect. Gerth, a critic of the original law adopted before he was elected, said the board could examine the new law’s effect and make additional changes.
“I’m with the town board in preventing the commercialization of town areas," he said. "We just want to get the data.”