Second Quarter 2016 Homes Sales and Short Term Rentals

First half sales statistics in the Hamptons and Shelter Island continue to be discussed in the news. As mentioned in my prior market report earlier this month, Shelter Island experienced a strong first half. The 2nd quarter brought 19 total transactions totaling $24,277,810 with a median of $950K. This is an improvement compared to 18 total transactions in 2015, a year ago, totaling $17,650,900 and a median of $705K.

The Shelter Island Town Board continued to address short term rentals at Tuesday’s work session. Councilman Jim Colligan said that he favors regulation that is “fair and reasonable, we put it on trial for a year and if we find out it doesn’t work we tweak it.”

Many municipalities throughout the world debate the pros and cons of “home sharing” and frame regulations around it. The Voice of San Diego, a publication in one of the top 5 AirBnb-friendly cities in the US, wrote: “Some property owners…are exploiting the sudden popularity of the sharing economy to turn their properties into mini-hotels where they are only rented out on a short-term basis, with rentals as short as two days. They can bring noise, parking problems and trash, as well as increased crime…They are being operated as businesses, and should be treated as such. Are short-term rentals businesses or are they something else? If they’re businesses, the city has regulations about them in residential neighborhoods. If they’re hotels, they should abide by the same health and safety regulations. The properties should carry commercial liability insurance, and undergo regular inspections. If they have a pool or hot tub, those facilities need the proper safety equipment that’s mandated in hotels.”

At the Town Board meeting, three homeowners with properties on Sylvan Road expressed their personal concerns and thoughts about short term rentals, which start at one night, secured on direct rental websites such as AirBnb, VRBO and Homeaway.com

The homeowner whose property has been the subject of the recent controversy, including noise and group rentals said “we spent every penny we had on that house…we knew we would have to rent the house. We are sorry but we are going to do our absolute best. This house is our baby…I wish our neighbors would have come to us to ask questions because we would have told them how strict we are with our tenants…we strongly suggest families, we have turned down probably about 90% of the inquiries because they are not families. This is not a flop house, this is not a party house. We are doing everything we can…to screen these tenants…I ask: who are you, what do you do for a living, I think it borders on illegal the amount I screen these people.”

The neighbor whose home is directly next door responded, “a point to be had here that you rent to families, families are not the issue. These are hotel operations that are unsupervised and unregulated. There is a constant flow of people coming in and out of the house…at what point do you say this is an industrial operation, a commercial operation, in a residential home.”

Phil Diorio, the neighbor whose property is directly across the street from the subject property and who is a member of the Zoning Board of Appeals said, “this is the impetus to look at what is going on with the short term rentals overall on Shelter Island. I think this is nothing less than a debate about the future of Shelter Island; where we are going to be in 20 years and do we want to be an island of transient rentals? If we do not put some limits on this…we will be overwhelmed [with short term rentals] because the math works. Why put money in the stock market? Buy a house and rent it for $500-$600 a night…do that for 100 nights a year for $50K-$60K that’s a nice return on your investment…This is a debate for the soul of Shelter Island…Personally I don’t want to live on an island full of transient rentals. This is the number one issue, along with water quality and quantity.”