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Hamptons Life

May 11, 2018 5:31 PMPublication: The East Hampton Press & The Southampton Press

U.S. Open Boosts South Fork Rental Market

The crowd at the U.S. Open at shinnecock Hills in 2004.  PRESS FILE
May 14, 2018 11:20 AM

Trying to find a house or even a room to rent between now and the end of June on the South Fork is going to be like finding a needle in a pricey haystack.

The U.S. Open golf tournament, taking place from June 11 through 17, is coming to Shinnecock Hills Golf Club for the fifth time, and overnight accommodations for staff and spectators are in high demand.

The four previous U.S. Opens held at Shinnecock Hills Golf Club took place in 1896, 1986, 1995 and 2004. Since the last time, new means for finding lodging have been created—namely, online marketplaces for short-term rentals such as Airbnb—though real estate agencies are still a go-to resource for visitors coming to town for the U.S. Open.

“Homeowners are anxious to make a load of money,” said Beau Hulse of Coldwell Banker Beau Hulse Realty Group. “The rental business is coming from both ways: the people coming in looking for a place to stay, and the homeowners looking to rent.”

Mr. Hulse said the number of people inquiring about short-term rentals is up at least 15 percent. Those rentals go for between $6,000 and $15,000 for the 10-day U.S. Open.

“People are going to start to find that if hotels are not available, they are going to turn to [rentals],” Mr. Hulse said, “because we don’t have hotel-motel strength needed for an event like this.”

According to tourism promotion agency Discover Long Island, as of last week there were fewer than 100 hotel rooms on the South Fork still available for the U.S. Open—asking between $140 and $800 a night.

“This type of thing happens every year, and people who wait until the end always look for an adjustment on the pricing,” Mr. Hulse said, suggesting that visitors think homeowners will offer more reasonable rates than hotels.

Diana Weir, Southampton Town’s director of housing and community development, said summer-long rentals on the South Fork are being replaced by short-term rentals in general, not just for the Open.

“The new generation of renters don’t want seasonal rentals,” she said. “They only want to stay for a week. … Airbnb, and all of these agencies and different websites that do short-term rentals, have really been encroaching on the housing stock here.”

In 2008, the Town of Southampton enacted a law restricting home rentals to a minimum period of two weeks. In anticipation of the U.S. Open, the Town Board updated the rental permit law in December 2017 to allow shorter stays during events that attract large crowds. For the waiver to take effect during a particular event, the Town Board must vote to temporarily relax regulations. Homeowners will still have to obtain rental permits and have their homes up to code.

East Hampton Town does not have a short-term rental allowance, and villages differ on restrictions on short-term rentals. But Carl Benincasa, Douglas Elliman Real Estate’s regional vice president of sales, said villages are where most of the business comes from.

“There is vigorous activity in the rental market this year,” Mr. Benincasa said. “Those are the more densely populated areas, so there is a lot more inventory available outside of town permitting.”

He also said he’s not worried about Airbnb taking away some of the business. “It’s a convenient way to do it. I don’t think it is affecting our business that we have seen,” Mr. Benincasa said. “I think, over the years, we might see some effect.

“You know, I think there is something to be said about having an agent who knows the area and can bring you to various properties and explain their location, their convenience. I think that is something—when you are spending hundreds of thousands of dollars on a rental—that you certainly would prefer to have.”

With a month to go before the tournament begins, there are 532 Airbnb guests expected to arrive on the South Fork the week of the U.S. Open, according to data provided by the website. This is up from 340 expected guest arrivals the weekend before the U.S. Open.

Many guests are from other states, including California, Massachusetts, Florida, Pennsylvania and New Jersey. They also are an older crowd—40 percent of guests are over 50. Nearly a quarter of the hosts are renting through Airbnb for the first time, and the majority are women.

Many local residents are hosting Airbnb guests for the first time during the U.S. Open, which Airbnb attributed to the rule change.

“We would also like to thank Supervisor Jay Schneiderman and the Southampton Town Council for their vision in allowing people to share their homes during the U.S. Open, and look forward to making sure that Southampton residents can take advantage of home sharing year-round,” said Andrew Kalloch, a public policy manager at Airbnb.

Altogether, Airbnb hosts will make $433,000 in revenue, which is almost four times more than the weekend before. Also, there are many more private-room bookings during U.S. Open week, which means homeowners are willing to offer spare bedrooms for rent.

Southampton Town Department of Public Safety and Emergency Preparedness Administrator Steven Troyd said the town has seen an influx of rental permit applications due to the U.S. Open. There will be 1,600 total rental permits active during the golf tournament. “That number is not exclusively for new rental permits but an overall number that includes rental permits that have already existed,” he clarified.

All permits are followed up on with code inspections to ensure compliance and safety. He said he’s sure that there will be permit and code violations, though how many is still unclear because of the new transient rental law.

“A lot of times, we have people report it. Neighbors see what is going on, and they call us. We do patrols and see when houses are occupied frequently with different people—that’s an issue,” Mr. Troyd said. “We have other forms of investigation, too. But I am not going to tip my hand, so to speak.”

Robbie Zalzneck, of U.S Open Player Services, said the association works with players to help secure accommodations at every U.S. Open. Mr. Zalzneck said some players—between 30 and 40 out of 156 total players—choose to rent a home in lieu of a hotel room. Players are responsible for paying for their own accommodations.

“The process is ongoing, and we are prepared to work with qualifiers, as they get into the championship field,” he said. “Two stages of U.S. Open qualifying end on June 4.”

“I think our streets are going to be packed,” said Judi Desiderio, the CEO of Town & Country Real Estate, looking at the undisclosed number of short-term rentals coming in from the firm’s eight East End offices. “If you got a little place on the ocean in Southampton, and it’s only got four bedrooms, it’s going to be a crazy [price]. Not to mention the amenities.”

In the most luxurious neighborhoods, rentals are going between $30,000 to $150,000 for the U.S. Open, depending on the location, Ms. Desiderio said.

More than 245,000 attendees are expected during the U.S. Open. The golf tournament is slated to generate more than $120 million in economic impact for Long Island, creating more than 1,000 part-time local jobs within the community, according to Discover Long Island.

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