Southold to limit number of Airbnbs and other short-term vacation rentals

Short-term vacation rentals in Southold Town could be drastically scaled back under a new proposal that would cap permits at 1% of homes in each hamlet as officials try to balance resident concerns with demand for tourist accommodations.

As the short-term rental industry has grown in popularity, complaints from neighbors about loud parties, trash, parking and other issues have also spiked. Seasonal vacation homes have also strained the year-round housing supply, driving up costs amid a regional crisis, officials said.

“We are struggling to regulate it,” Southold Town Attorney Ben Johnson said in an interview. Since 2015, Southold has banned rentals of less than 14 days, but enforcement has proved virtually impossible, officials have said. “We understand this is a seasonal economy. … Most of the complaints we get are from people that it’s just a revolving door next to their house,” Johnson said.

Under the proposal, short-term rental permits would be capped at 1% to distribute offerings across the town’s nine hamlets and awarded via lottery. Based on the 1% cap, 119 homes could be eligible for short term rental permits, according to a town planning analysis — an 80% decrease from the current rental market.

Last year, Southold began using the software Rentalscape to track illegal short-term rentals. Figures from the latest report show there are about 640 short term rental properties in town that earn $27.5 million in host revenue, Johnson said. The average nightly rate is $902, according to the town report.

Fishers Island, which does not have any hotels, would be excluded from the law. Though part of Southold Town, the four-square mile island is only accessible by ferry from New London, Connecticut, which Johnson said makes enforcement impractical.

Councilwoman Alexa Suess, who owns a jewelry studio in Greenport, said the proposal aligns with the town’s affordable housing goals while encouraging tourism. Suess said small business owners she’s conferred with support the measure.

“The irony is that even though tourism is necessary … they need employees to work at their businesses, and it is getting harder and harder to find either seasonal or year-round employees,” she said in an interview. “Improving housing stock is in the best interest of everybody, including business owners.”

The median home price on the North Fork reached an all-time high of $1.25 million in the third quarter, Newsday recently reported. The median household income in Southold is $116,667, according to U.S. Census data.

Day and weekend trippers are a major source of business for restaurants, retailers and other industries, said Amanda Giuliano, of Southold, a small-business owner who co-chairs the town’s Economic Development Committee.

She said the proposal is a “step in the right direction” toward balancing the seasonal economy with the needs of full-time residents.

“We cannot build a sustainable tourism economy on the backs of a workforce that can no longer afford to live here,” Giuliano said in an interview. “If we don’t have people working, there will be no tourism.”

Properties must have a valid general rental permit, which is a two-year certification that includes fire and safety inspections, to enter a random short-term lottery permit drawing. Other eligibility requirements include holding $1 million in general liability insurance and following parking and waste removal plans. Properties served by cesspools are ineligible.

In addition, only one short-term rental permit will be issued per owner or LLC, according to a draft of the law. An owner or their representative must be physically available to respond to potential complaints and violations promptly within 60 minutes during rental periods.

Southold budgeted $120,000 for a new full-time code enforcement director in its 2027 budget in anticipation of the new short-term rental rules. The town board still has to hold a public hearing and approve the legislation. Town officials are aiming to roll out the lottery next year, with the permit system taking effect in 2028.