Year-Round Renting Is A Costly Rat Race

Bruce and Rebecca Engel were newly married and back from five years working overseas when they started looking for a home to rent on the South Fork, where they had lived for several years prior.

Mr. Engel's mother was here, and the couple liked the community, but they weren't ready to purchase a house. The 30-somethings started looking for a year-round rental, east of the Shinnecock Canal.

They went to real estate agents and scoured online listings and Facebook postings daily. Bruce Engel said what they found was paltry, and disheartening.

Many of the houses they looked at in their price range were extremely tiny, or in deplorable condition. Others came with outlandish requirements, like paying a full year's rent in advance—upward of $30,000.

The couple—she works in fashion, he's an architect—started nudging their price point steadily upward, hoping the selection would improve.

We had to change our whole sense of what our budget was," Mr. Engel said recently. "We were looking for something around $2,500 or less. Once we started searching, we realized that was not realistic at all." After months of searching through the usual channels, the Engels' finally "lucked out" through a friend of a friend, landing a smallish three-bedroom in the Clearwater neighborhood of East Hampton for about $3,400 a month.

"We're not going to be bleeding money, but we're not going to be saving it either," Mr. Engel said. "We both do all right, and, even so, that is a lot for us. It's frustrating to be spending so much on rent and not moving toward anything. I don't understand how working people manage out here."

The Engels' story is a common one for a broad community of families, couples and relatively well-to-do singles. As more and more landlords have been lured to online listing-houses like Airbnb and the big returns they can see through booking numerous short-term summer rentals, the paucity of year-round rental houses has become a joke throughout the eastern portion of the South Fork—one about which few people are laughing.

The Engels' price range for monthly rent, the "mid 2,000s," is the sweet spot for many East Enders looking for rental housing. They make enough to afford what would be very high monthly rent for a relatively small house in most parts of the country, but either aren't ready to buy or can't quite bear the costs of a down payment and mortgage. Instead, many end up paying nearly what a mortgage would cost in monthly rent, which leaves them handicapped in trying to save for a six-figure down payment.

The search, for many local families like the Engels, has grown more and more difficult—and, often, desperate.

Gail Simons, her husband, Mike Martinson, and their three children spent 10 weeks living out of a camper in Montauk at the end of last summer after the house they'd rented for three years, despite what they described as rampant problems with it, was suddenly yanked out from under them by their landlord just as the summer approached.

The couple runs an aquaculture company, selling oysters grown in Lake Montauk to restaurants, and earn livings that Ms. Simons, an East Hampton native, said made them willing to pay a hefty sum to stay in Montauk, where their kids attend school and church.

But there was simply nothing for rent on a year-round basis, at any price.

Come the fall, when houses all over Montauk were suddenly sitting empty, but still no new year-round listings appeared, Ms. Simons crafted a six-page "resume" about her family—a pitch about their trustworthiness and an appeal for consideration as year-round tenants—and dropped it at the front doors of houses all over the hamlet.

"I was thinking maybe someone would be sick of the damage to their home and problems of the summer rentals, and would see us as a responsible family that would treat their house like it was ours," Ms. Simons recalled.

The ploy did not work—exactly. No landlords had sudden changes of heart, or business plan, but someone at the Catholic church the family attends saw their appeal on a community bulletin board and suggested a residence on the church property could be rented to them.

"There were so many families in our same position at the same time," Ms. Simons said from the family's new house, which they are renting from the church on a year-round basis, with a lease. "Families are just piecing it together. There's this hush-hush thing, but a lot of people end up camping illegally in someone's backyard and hoping they can at least find a winter rental."

In Montauk, almost no rent below the actual cost of a mortgage for a $750,000 house will get one a year-round rental. In other areas, the options are there—the farther west, the more there is—but the shrinking selection has pushed prices up steeply.

"Literally, four years ago we got a house, a nice house, in Noyac for $2,200 a month," said Michael Hegner, a carpenter who lives with his brother and a roommate, also construction workers. "We had to find a new place last fall—the house got sold—and even a dump, way smaller than where we were living, was like $2,800 or $3,000 plus utilities, and there weren't even many of those.

"We're three single guys, we don't want to live in a tiny apartment together, and we make pretty good money, but unless you can pay $4,000 a month, there isn't much. It took us a long time, up to the point where it was like, 'Guys, we have to move out soon …' to change our expectations about what we could get."

Mr. Hegner said his roommate, who grew up in Hampton Bays, decided to move back in with his parents for the summer and commute to the East Hampton construction job the three are working at for the next two years. The brothers are now splitting a two-bedroom cottage with one shower in North Sea, for $2,900 a month that they got at a discount from the original asking price only because they offered to make some improvements to the house.

"It needs a lot—like, really a lot—of work," Mr. Hegner said.

Like the Hegners' roommate, many people have been forced to simply abandon their hopes of living east of the canal and pushed west, resigning themselves to joining the "trade parade" of traffic each morning.

"We want a nice house, with a little yard, for the kids," said Maria Molina, who lives with her husband and young daughter, and her brother and his wife and daughter, in East Hampton. Both families are preparing to move to Hampton Bays after being unable to find a suitable house in East Hampton. The two men will commute to East Hampton to their landscaping jobs. Ms. Molina, who works mostly in the evenings and at night for a Sag Harbor cleaning company, said she will quit her job and try to find other work closer to the family's new home.

For the lucky few, being priced out, or locked out, of the rental market forces them to reconsider their options. Once monthly rents push above $4,000, shelling out the money for a mortgage instead of rent makes much more sense—if one can come up with the down payment.

Adina Azarian had been renting year-round since 2008 until the house was sold in 2014. Last year she set out looking for a new rental, something under $3,000 a month.

"There was nothing very nice for less than $4,000 a month, at that price. It forced me to consider whether I could buy something," said Ms. Azarian, who bought a house in Northwest in April. "For me, at least, it was a blessing in disguise."

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