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Hamptons Life

Jan 7, 2019 1:54 PMPublication: The East Hampton Press & The Southampton Press

Airbnb Program Abroad Is A Model For Subletting On The South Fork

Jan 7, 2019 2:06 PM

Landlords don’t have to look very far to find regulators cracking down on Airbnb: New York City wants hosts to register their homes and Southampton and East Hampton towns restrict the amount of time hosts can list their property for.That makes Victoria Kahn, founder of Century 21 Agawam Town & Village Realty in Southampton, particularly interested in an international partnership the rental website made with Century 21 France earlier this year.

“Century 21 is the largest real estate network in the world and has always been a leader in implementing new ideas in real estate,” Ms. Kahn said. “There aren’t many year-round rentals or other rental options that are affordable for a growing population that needs it here—if this partnership is extended to other communities, it could be very successful.”

The partnership allows renters in Paris, which is the top earning region for Airbnb, to request Airbnb-friendly leases so that they can sublet an apartment on the website for up to 120 days. In return, the landlord and Century 21 get a cut of the renter’s take, Airbnb gets its transaction fee and the Parisian government, which incentivizes the program to meet the increased demand for affordable short- and long-term rental options, gets fee revenue from associated permitting.

It’s similar to a program Airbnb has in the United States called the Friendly Buildings Program that connects landlords, property managers and homeowners’ associations to allow tenants in their buildings host Airbnb guests as part of their lease agreements—that is, without a real estate company involved.

Airbnb and Century 21 intend to eventually extend their partnership to the other 852 Century 21 branches throughout the country. Laurent Vimont, the president of Century 21 France, has called it “a win-win” for everyone involved.

“It does have to be a win-win in order for it to work,” Ms. Kahn said. She speculates that the success of the program will be grounded in Airbnb’s ability to get all of the partners on the same page.

But it shouldn’t be hard as more than 60 percent of households in Paris are rented, and rent is a household’s largest expense. Ms. Kahn, who has lived in France for a stint, said Paris—and the South Fork, for that matter—suffers in terms of having housing available for people who work there every day. Under this partnership, local workers would have a place to stay for stretches at a time, and renters who travel for work would be able to receive an additional source of income for subletting.

“The need for housing for young people is huge—and it has to be addressed here on the South Fork, too, because we don’t want to see them all forced out,” Ms. Kahn added. “There will be constant changes to the system and code here until we find a solution, and an application here could be it.”

Steven Troyd, the Southampton Town public safety and emergency management administrator, chuckled when he heard about the overseas partnership. He said it would be a code enforcement blunder here.

“The online market is driving up more [problems] than before,” Mr. Troyd said. “There are people who don’t have any permits at all, and using the internet to do it. It’s all short-term rentals.”

Southampton Town’s rental permit law was amended in December 2017 to allow for short-term stays in the town during special occasions. Landlords are still required to obtain the necessary rental permits and pass code inspections. Airbnb reports nearly 15,000 Airbnb guests arrived in the Hamptons between Memorial Day and Labor Day, 830 of whom had short-term stays for the U.S. Open golf tournament at the Shinnecock Hills Golf Club in June.

Mr. Troyd said his department saw an uptick in the amount of illegal rentals or short-term rentals that extended beyond their allowed stay. For instance, on just one day in July, 12 notices and two summonses were issued by town code enforcement for safety and rental permit violations.

“There is only one permit and they should be going through the town,” Mr. Troyd said. “The town will ensure that there was a safety inspection or a certification. It preserves and saves the lives of the people who stay there and it helps with the resiliency of the town because, for instance, while we can’t prove how many fires we have prevented we know that inspections prevent fires and other safety issues.”

A similar raid in East Hampton in July found 32 people living in cramped and unsafe conditions in a four-bedroom house, void of safety requirements and rental permitting. Initial speculation alluded to it being Airbnb related, but it was later found that it was temporary housing for seasonal workers.

Regardless, that’s unacceptable to Josh Meltzer, the head of policy for Airbnb in the Northeast.

“Airbnb encourages hosts to think carefully about their responsibilities, and understand any local, relevant regulations or required permissions in their lease, HOA or co-op board regulations,” Mr. Meltzer said. “Airbnb outlines these recommendations [online]. That said, while we are glad that towns took key steps to allow for home sharing during the U.S. Open, we know that our host community across the Hamptons rely on home sharing long after big events are over. We look forward to working with these communities to ensure local residents can take advantage of home sharing year-round.”

Mr. Troyd said that if Airbnb was to extend the French program to the South Fork, towns would have to create safeguards to protect tenants and landlords. He speculated that the town boards could adopt an ordinance that requires a rental permit number that would hold real estate brokers accountable. East Hampton already has a similar law on the books.

“The towns are doing their best to check for illegal rentals but with limited resources,” Ms. Kahn said. “That’s why having a reputable real estate company in the mix to ensure the rules are followed makes sense. Brokers have an expertise in screening tenants and are beholden to ethics and housing laws—Airbnb just really becomes a payment vehicle.”

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