Airbnb And Similar Sites Could Further Gut Affordable Housing, Officials Say


Internet sites like Airbnb and VRBO have been making it easier for transient visitors to many communities, including those on the South Fork, to find short-term rentals, while allowing some homeowners to make a dent in their mortgage payments—but at a considerable price to the neighborhood, critics say.

“The constant flow of transients creates noise, garbage and other life-quality problems for the neighbors,” one Springs resident posted recently on Facebook, adding that a house in her neighborhood fetches $500 per night, with about a dozen 20-somethings leaving cigarette butts and empties in the street as they set out one night to go clubbing. “Airbnb rentals are changing neighborhoods, and even entire communities, and not for the better,” she wrote.

Housing officials in Southampton and East Hampton town this week echoed another concern—that Airbnb and similar sites, which link property owners with potential short-term renters, could gut what remains of an affordable housing market in the area.

The problem has been reported nationwide, most recently in San Francisco and New York City, where critics say an already lean stock of affordable residences is increasingly being turned over to tourists and other short-term visitors.

There is little financial incentive for homeowners to rent to a consistent person or family year-round when sites like Airbnb make it easy to turn over frequent short-term rentals, explained Tom Ruhle, East Hampton Town’s director of housing and community development, this week. “If you’re renting your house for $1,600 a week, versus $3,000 a month, you’re making more than double,” he said. “Other than it being illegal, if these houses are being run as a motel, they become more expensive, which drives up the cost of housing, which eventually leads to problems.”

When searching for a full house rental for the week of August 20 to 27, the search “Southampton, NY” renders 68 rentals, however the results pull listings from as far west as Center Moriches, to as far east as Montauk. Prices in Southampton ranged from $300 for a one-bedroom apartment to $3,100 for a six-bedroom home with a swimming pool and tennis court. A search for “East Hampton, NY” rendered 70 listings, but again, results varied from Hampton Bays to Amagansett.

Prices for homes listed in East Hampton Town ranged from $221 for a studio apartment to $2,500 for a five-bedroom home on Spread Oak Lane in Northwest Woods.
The East Hampton Town code allows homeowners to rent their homes for fewer than 15 days twice in a six-month period. Anything more than that is a violation, according Betsy Bambrick, the town’s director of code enforcement.

Southampton Town and Southampton Village both restrict renting out individual rooms, stating that “the leasing, occupancy or use by a tenant of less than the entire rental property is prohibited.” They also ban the selling of shares for less than a month, prohibit “transient rentals” and limit the number of rentals to two turnovers when a home is being rented for less than a month.

In East Hampton Town, Mr. Ruhle described the influx of short-term rentals as “a flood” and possibly “the largest code enforcement problem the town has.”

East Hampton has seen a “significant increase” in the number of complaints regarding excessive turnover this summer in comparison to last, the primary reasons being sites like Airbnb and VRBO, according to Ms. Bambrick. “Excessive turnover wasn’t utilized last summer in the way it has been this summer,” she said.

Given a release posted on the town’s website in July, Southampton seems to share a similar flood of complaints and violations. The post alerted residents to “significant violations” of the town code via “party houses,” where specific homes were identified for overcrowding, excessive turnover and underage drinking.

“The concerted efforts of the Code Enforcement Division and the town attorney’s office to address these and other major code violations have resulted in over $94,000 in fines levied against the property owners since June 1,” the town stated. Southampton Town Attorney Tiffany Scarlato could not be reached for further comment.

“I’m finding a lot more people, for obvious reasons, are looking for short-term, higher-yield return rentals and getting out of year-round rentals,” said Curtis Highsmith, the executive director of Southampton Town’s housing authority.

Both Mr. Highsmith and Mr. Ruhle said the increase in short-term rentals and subsequent decline in affordable housing have contributed to a larger commuter population, causing more traffic and wear and tear on roads. “There’s an abundance of highway activity because people can’t live here, they can’t reside here and have to commute,” Mr. Highsmith said.

In extreme circumstances, Mr. Ruhle said, the overall lack of affordable housing has led to homelessness, especially in the summer, when people who opt for more affordable winter rentals, typically September through May, end up with nowhere to go as rentals are at a premium. “There are some people living in the sand dunes, in their cars, in campers, in the woods,” Mr. Ruhle said.

A longer “summer season” could amplify the problem, he said, noting that the Long Island Rail Road plans to extend its summer schedule through November, The change could “crush down on the winter rental market,” the housing director said.

Yet Airbnb prides itself on fostering global connections and providing users with a unique travel experience, according to its website. And many renters and hosts feel similarly.

“They understand they’re coming into my home, and it’s not a hotel,” said an East Hampton resident who rents his second home to short-term guests through Airbnb, and who requested anonymity, as his rate of turnover is illegal. “Yes, you’re paying a fee, but you’re also sharing something,” he said in an interview earlier this summer. “I want people to get the Airbnb experience. It’s this sort of understanding that we’re all in this together,”

The increase in short-term rentals has also struck a nerve with hotel, motel and traditional bed-and-breakfast owners, who claim the sites create an unfair playing field for legitimate businesses.

“There is a need for transient places out here,” said Chris Allen, owner of A Butler’s Manor, a bed-and-breakfast in Southampton Village. “Sites like Airbnb market themselves as this great way to experience a place and give you a unique perspective of the area. It’s the same way a bed-and-breakfast is marketed—but I have to go through all the legalities of it.”

Mr. Allen said he pays a total of 11.625 percent between sales tax and an approximately 3-percent hotel tax—something homeowners who rent through Airbnb and similar sites don’t have to do. “It’s a black market economy,” he said.

Airbnb sends homeowners 1099 forms so they can declare their profits as taxable income, but it is entirely up to the homeowner to follow through. “We expect all hosts to familiarize themselves with and follow their local laws and regulations,” Airbnb’s website states.

Mr. Allen added that while he hasn’t seen an impact in business at his bed-and-breakfast, the laws that homeowners may be evading while advertising through Airbnb still puts him at a disadvantage.

“It bothers me that I’m not playing on a level field,” he said. “If I knew that the village trustees, or the town, would say Airbnb is fine and change the code, then I would have three more houses and I could fill them up with just the overflow of people that I can’t accommodate here. But I won’t do that, because it’s illegal.

“If we’re going to face reality, Airbnb will not go away. I don’t think it poses enough of a hassle for [the town] right now to do much—but that’s not to say it won’t in the future.”

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