Short-Term Rentals Now A Cottage Industry

Nearly 600 mostly short-term rentals in Montauk are listed on Airbnb, one of many competing services on the Internet — and there do not be appear to be any vacancies for the Fourth of July weekend. Homeaway lists about 340 houses available in East Hampton. And on Vacation Rentals by Owner, another website, just over 200 properties recently had dates open for this summer in Sag Harbor.

Many landlords who post their houses and rooms on these sites — which have gained notoriety after stories like one about a rented apartment in Manhattan that was used for a for-profit orgy — seem to rent by the night. This is a violation in the Town of East Hampton (which includes Montauk and parts of Sag Harbor), where rentals for less than two-week periods are limited to two every six months.

Guest rooms are another story. They can be rented in houses that are owner-occupied in East Hampton Town, although no more than two rooms can be rented at the same time. Guest rooms also are regulated by the New York State building code based on square footage.

These sometimes de facto hotels have come under scrutiny by the state and City of New York, and The New York Times recently took notice of them as a new cottage industry here, assessing the impact on traditional, broker-represented listings. Even some public officials have gotten in on the trend, notably Suffolk County Legislator Jay Schneiderman, a former East Hampton Town supervisor, who offers his ocean view house in Montauk to vacationers on several websites.

“People renting their homes — that’s a big piece of the local economy. That’s allowing the schoolteachers to stay, and a lot of the local work force,” Mr. Schneiderman said. “I’m one of those people. I wouldn’t be able to stay out here if I didn’t have that rental income.”

Mr. Schneiderman’s newly renovated, 2,500-square-foot, five-bedroom house, which sleeps 10, can be seen advertised on Homeaway and V.R.B.O. for $1,000 a night. However, he said the way the website is set up creates the wrong appearance. He does not rent by the night, he said, and looks to rent to families. “A lot of people get confused — think they can have it by the weekend. I’m constantly turning people away. I believe I’m fully complying with the code as I read it.”

Mr. Schneiderman’s house has a pool, and is “steps away to one of the world’s most beautiful private sandy ocean beaches,” its online listing says. Pets and smokers aren’t allowed, but children are welcome. The fine print on the advertisement calls for a three-week minimum stay. Mr. Schneiderman said he likes to rent the house for the summer and has done so for the last six years after it became an “economic necessity” following a divorce. He is also in the hotel business as an owner of Montauk’s Breakers motel, where he lives in the summer while he rents his house.

He is far from alone. Tim Bock, an East Hampton Town Trustee, and his wife, Susan, more or less continually rent out two rooms in their house on Highland Boulevard for between $69 to $99 per night. Guests have to share a bathroom if more than one room is rented. The cost for a week is about $700; it is $1,800 per month. If more than one person is to occupy a room, they charge an extra $30 per night. The Bocks have a page of their own on Airbnb, and it showed no rooms available this weekend.

“You have to do it, just to survive out here,” Mr. Bock said. “It’s mostly weekends, it’s mostly Europeans,” said his wife, who handles the bookings, adding that “we are the cheapest game in town.”

Though the Bocks have three listings on Airbnb, Ms. Bock said she only rents two rooms, complying with the East Hampton Town code. She had considered opening a third room for the summer, she said, but is taking the listing down because she likes to keep one room available if their children come to visit.

Testimonials on such sites as Airbnb indicate that many hosts are paying little attention to the town’s rule on no more than two short-term rentals in a six-month period. Last year, a single room that goes for about $330 a night in a Northwest Woods contemporary garnered nine glowing testimonials between June and the end of September. A $660-per-night cottage overlooking Fort Pond in Montauk with a two-night minimum stay, and word that it is available for parties and special events, had at least 19 reviews from separate guests last year.

The Bocks have received 211 mostly positive reviews on Airbnb since joining in 2010. In 2013, they received 70 reviews; in June this year there already were three. The rule about excessive turnover does not apply to guest rooms in owner-occupied houses, so the Bocks, and others who limit rentals to two rooms, are in the clear. Even Airbnb reminds its users to mind local laws. “I did get a notice from them about the town code, but I don’t know that the town cares,” Ms. Bock said.

Sometimes arrangements are outright questionable. Last summer, a year-round rental tenant of a house on the outskirts of East Hampton Village was evicted after she was caught operating an illegal apartment over a garage as a bed and breakfast.

“What’s on our radar is trying to make code enforcement more effective, more responsive, and dealing with things in a timely manner,” East Hampton Town Supervisor Larry Cantwell said. “Short-term rentals that by themselves are not illegal, but that are illegal once they are rented out more than twice than they are allowed to, is something that we are dealing with,” he said. “Absolutely no matter who it is.”

Michael Sendlenski, an assistant town attorney who prosecutes code violations, said parsing out homeowners who violate the code isn’t a simple task. “It is not as easy as going to Airbnb and saying they’re doing something illegal,” he said. He said that while homeowners can offer short-term rentals twice in a six-month period, “it is the third time it becomes illegal pursuant to the town code, and it becomes a motel at that point.”

Information about potential violations can be gleaned from short-term rental services, and elsewhere, but the vast majority of charges are “complaint based,” he said. “We use all the information we get to build the metrics of whether the use is legal or not,” he said, though he acknowledged there is little time to spend combing through such websites. “We don’t have the luxury of sitting around contemplating whether each of these things is illegal.”

Jeff Bragman, an East Hampton attorney who handles many zoning cases, said the reason the code offered guest room exemptions despite the concern about excessive turnover was because an owner at home would be “less likely to turn into a circus.” Mr. Schneiderman also sees a problem with excessive turnover in what are supposed to be single-family residences.

“I think there’s like 400 or so Montauk people who rent by the weekend. I do think that’s a little bit much.” The first problem with the rental code, Mr. Schneiderman said, is that it is rarely enforced. “You actually could rent by the weekend, but you could only do that twice. It is really very confusing the way the law is written.” However, he said the biggest problem is “not the guy who rents two weeks to a family.” Instead, he said, “It is the hundreds of houses that are rented as group houses.”