Airbnb and the Hamptons: The Effect of Short-term Rentals on the East End



The Hamptons are famed for being a summer haven to the affluent of New York City seeking a break from the muggy, heat of the congested city. Yet the landscape of ‘summering’ in the Hamptons has changed as house-sharing sites such as Airbnb, HomeAway and VRBO have introduced short term rentals that allow tenants to rent out their homes directly. Demand for shorter rentals has increased as individuals who are keen on a weekend or two out East have more options besides hotels, yet this demand has led to a shift in the market.

“Not every landlord wants to be bothered with changing tenants every weekend.”

“The short-term rental apps and websites have significantly changed the rental market throughout the Hamptons,” said Scott Strough, a Compass real estate broker, to Sag Harbor Express. “Tenants have now scheduled by the week or weekend instead of being locked into a month or longer. It has hurt the people who depend on the rental income of the summer as it has diluted the number of full season tenants and monthly tenants. Not every landlord wants to be bothered with changing tenants every weekend.”

The turnover of guests staying in the Hamptons has also resulted in complaints of congested streets and loud noise. Companies like Airbnb and HomeAway have come under fire as the cause of these issues. The Town of East Hampton have enacted tougher
regulations and policing to enforce laws and limit rentals under a two week period.



Where tenants could get away with renting out their homes for as short as a weekend, the East End mandatory rental registry requires all homes listed for extended stays, register with the town, pay a fee of $100 and undergo inspection for meeting building codes. Homeowners must then post all ads with their registry number visible to all. This allows for easier tracking of properties not in compliance with safety codes and issuing fines or jail time to those who do not abide by the new regulations.

However, the Hampton’s stricter policies have also impacted seasonal tenants who rent out their homes for a month or longer, as no more than 4 unrelated adults can occupy a home at a time. “The town has responded to very vocal, hysterical people who claim to have party houses next door to them,” said Conni Cross, a resident of Cutchogue who’s guests tend to enjoy low-key activities in the Hamptons, like biking and wine-tasting. “It does exist, but it’s a very, very small percentage.”

“…the short-term rental activity will be driven underground, where it cannot be monitored, regulated or taxed.”

According to Cross, the new restrictions will cost her an estimate of $30,000 in revenue due to her property’s success with weekend rentals as opposed to two weeks or more.

“The extreme restrictions implemented by Southampton and East Hampton are incredibly burdensome for homeowners and visitors,” said Ashley Hodgini, an Airbnb spokeswoman, to The Real Deal. “In our experience, it will be difficult for either town to achieve compliance with these policies. Instead, the short-term rental activity will be driven underground, where it cannot be monitored, regulated or taxed.”

Yet, many locals and brokers do not view house-sharing services as detrimental to the real estate market as many predict and see a way for companies like Airbnb, VRBO and HomeAway to cater to specific demands while many clients still prefer to go the traditional route of using a broker to rent out properties.

Senior Managing Director of The Corcoran Group in Sag Harbour and Montauk, Chris Tice said, “Many homeowners who have gone this route, they’ve had poor experiences with a tenant. Conversely, we have heard from some renters that when they booked through these services the house they rented was not what they expected. Many of these homeowners and tenants have returned to work with Corcoran because they want
a trusted expert in the process.”

As for the future of the Hamptons and Airbnb? “A lot of people are renting their own homes and using sites like Airbnb, and what they can do online with the rentals, I don’t think there’s any way of controlling that,” said Enzo Morabito, a licensed associate real estate broker with Douglas Elliman Real Estate in Bridgehampton. “We will not be a part of it, it’s just not who we are. But the people who own these homes, as long as they are within the legality of what they’re supposed to do on Airbnb, who cares?”