East Hampton to crack down on short-term rentals

The issue of illegal short-term rental properties in East Hampton has grown so acute — with out-of-town investors buying up homes and flipping them for vacation rentals — that town officials are looking to beef up enforcement, they said.

Town officials said they will consider purchasing software to aid enforcement of their rental property registry law, which was established in 2015. Only about half the 1,874 properties listed online as short-term rentals are registered with the town, which has a $200 application fee, according to data presented by Deputy Supervisor Cate Rogers. Rogers used AirDNA, a vacation rental industry market analytics company.

Having more homes used by seasonal vacationers risks diminishing the area's housing stock for full-time residents and damaging the local hotel industry, Rogers said during a recent presentation before the town board.

Short-term rentals in East Hampton are limited to 14 days and can occur only twice in a six-month period, Rogers said. 

Monitoring multiple online platforms for illegal or unregistered rentals through traditional methods is difficult, she said, recommending the town seek proposals for monitoring software.

Out-of-town investors — who she said are now supported by specialized lenders, marketing businesses and property management companies — have changed the game.

“I do think we are looking at commercial investment in our residential districts by investors who only seek to make profit and are not looking at being part of this community at all,” Rogers said.

Town officials acknowledged that short-term rentals are a vital part of the town’s economy. East Hampton is a seasonal tourist destination, and even some full-time and part-time residents rely on being able to rent property to vacationers for supplemental income, they said.

“It's a balance. We live in a very beautiful place. A lot of people want to come here. We want to support that; that helps our economy,” said Councilman Ian Calder-Piedmonte. “But we need to make sure that we don't become purely seasonal, and that we have a healthy, vibrant year-round community that we've always had.”

East End issue

Towns on the East End are grappling with how best to handle the surge in short-term rentals. 

Over the summer, Southampton Village enacted a new law prohibiting rentals for less than 14 days at a time, Newsday reported. The Town of Southampton has the same requirement. Other towns such as Riverhead try to prohibit vacation rentals altogether by requiring a rental period of at least 30 days.

Earlier this year, Southold Town started using the Rentalscape software program to help identify illegal short-term rentals, Rogers noted. She told Newsday the software would also identify how many properties are being operated by out-of-town investors. The town board agreed to solicit proposals from vendors for the monitoring software.

Recommendations eyed

Rogers suggested several ways the town could better regulate short-term rentals. Those include creating a single section of the town code specific to short-term rentals; ensuring Suffolk County's hotel/motel tax applies to short-term rentals; and creating a town tax on short-term rentals. The town could also increase rental registration fees to offset expenses incurred by the town related to those properties and require rental properties to be the owner’s primary residence. 

Board members cautioned that new regulations could disrupt the tourist-driven economy.

Councilman Tom Flight requested more data on problems stemming from short-term rentals and said the board must “be very careful in not pushing away visitors” by adopting more regulations.

Councilman David Lys said his family has rented out homes and used it to “put kids through school, buy cars and other things.” The board needs to make sure new regulations don’t “affect that traditional form of revenue resources for our community members out here," he added.