Short-Term Rentals: When Neighborhoods Meet Big Business
The Shifting Face of Short-Term Rentals in East Hampton
The streets of East Hampton carry a sense of community often passed down for generations. Yet, lately, there’s been a noticeable change—a growing tension between the traditional calm of local neighborhoods and a surge in properties acting as full-time short-term rentals. It’s impossible to ignore just how much the short-term rental landscape has reshaped East Hampton, echoing shifts seen in cities from Denver to the Hamptons.
Local Leaders Grapple With Community Versus Commerce
This week, the East Hampton Town Board took a cautious step toward tougher oversight of short-term rentals, following an extensive presentation by Councilwoman Cate Rogers. At the heart of the discussion was the issue of investors turning residential properties into businesses—something the town code explicitly prohibits.
Councilwoman Rogers brought up the mounting concern that some investors are motivated purely by profit, with no desire to contribute to community life. She backed this up with pages of industry data, firmly stating, “This is no longer the rental market residents once knew.” According to AirDNA, an industry tracker, there are now more than 1,800 short-term rentals in the area, averaging over $1,200 per night. Most guests stay just four nights, a sign of rapid turnover and the growth of professional operations over casual home-sharing.
More Data, Fewer Assumptions
Rather than rushing to introduce new laws, the board opened the floor to commentary from both officials and residents. They agreed something has to be done about those flouting the rules, but the challenge is in drawing the line between legitimate local renters and those cashing in on the area’s booming tourism.
“East Hampton isn’t just a commodity,” emphasized Councilman David Lys, echoing words from the Town Supervisor’s recent address. His family has rented homes here for five decades, so he’s seen first-hand the difference between tradition and the wave of corporate-style rentals dominating recent years. Board members highlighted a critical distinction: traditional seasonal homeowners shouldn’t be penalized by restrictions targeting high-frequency, investor-driven rentals.
Defining the Modern Short-Term Rental
Councilwoman Rogers offered a precise definition: a short-term rental involves a single-family home rented for less than two weeks, at least three separate times within a six-month window. This means families renting out a primary residence for a month or full season—something long done in East Hampton—would remain unaffected by newly discussed rules.
Since the town’s rental registry law was established in 2015, over 12,000 rentals have been recorded. Yet, even as the overall industry flourishes, annual registrations have stayed flat—a troubling trend, given so many more properties now operate as short-term rentals. Locals have noticed an influx of new players: online booking platforms, property management companies focused solely on short-term rentals, and even financing tools specifically designed for investment in this market.
Technology for Transparent Oversight
To get a clearer picture of what’s really happening, Ms. Rogers pointed to software recently acquired by neighboring towns like Southold. This kind of platform scans rental listings across third-party sites, flags rule-breakers, and lets local officials cross-reference owners, tax records, and registrations. The software’s even capable of blocking listings that exceed local limits—features seen as vital for managing the sheer volume of rentals without overwhelming the town’s administrative capacity.
Though not yet included in next year’s preliminary budget, there’s growing interest on the board in investing in tools that offer clearer oversight and more effective enforcement. Ms. Rogers and others argue that without access to solid data, the town can’t hope to put effective controls in place.
Possible New Approaches to Regulation
- Requiring short-term rentals to be primary residences
- Raising registration fees for short-term rental properties
- Imposing a local transient occupancy tax
- Mandating proof of compliance with Suffolk County tax guidelines
These options could help slow the commercial encroachment and rebalance things in favor of true local owners. Suffolk County recently implemented its own occupancy tax on all short-term stays—extending beyond hotels to private rentals. By mid-2024, not only must local homeowners comply, but platforms like Airbnb have begun collecting the tax directly, streamlining compliance.
Tourism Dollars and the Ripple Effect on Community
It’s estimated that short-term rentals bring in more than $100 million yearly for area homeowners. Councilman Tom Flight stressed the need to weigh any new measure carefully, given how vital tourism is to the local economy. “As this industry tips toward large-scale, outside operators, there’s a risk of losing local control,” he noted. There’s an underlying concern: as investment firms and even national brands like Marriott step into the short-term rental arena, the traditional sense of small-town ownership could easily slip away.
Ms. Rogers reiterated that her aim is to preserve a supplemental, community-friendly use of residential properties—keeping neighborhoods vibrant while discouraging “strictly commercial ventures” that feel out of place and don’t contribute to the social fabric.
Next Steps: Prioritizing Community Needs
The board agreed they need more feedback and time to assess the impacts before making final decisions. Investing in tools to improve transparency and compliance appears likely, with further debate to determine what additional restrictions, if any, will move forward. The core question remains: how can East Hampton welcome visitors and nurture its vital rental economy—without losing the unique sense of place that makes it special?
Every community faces its own version of this balancing act. Here in East Hampton, the hope is to keep homes, streets, and traditions welcoming for residents and guests—today and down the road.