Priced Out: Hamptons Share Houses A Thing Of The Past - 27 East

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Priced Out: Hamptons Share Houses A Thing Of The Past

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Enzo Morabito, associate real estate broker with Douglas Elliman

Enzo Morabito, associate real estate broker with Douglas Elliman

Drew Green, an associate broker at Saunders

Drew Green, an associate broker at Saunders

Cindy Scholz, associate broker at Compass

Cindy Scholz, associate broker at Compass

Sophie Griffin on Aug 16, 2021

“The Hamptons, once upon a time, used to be the playground for the wealthy and the wannabe-wealthy,” said Drew Green, associate broker at Saunders. “Now it’s become the playground for the wealthy, and the wannabe-wealthy are hopefully house guests.”

The pandemic-induced real estate market has driven prices up, up and up, and inventory way down. But even before coronavirus made its way across the world, the share house — a more affordable option for spending summer weekends in the Hamptons — was an endangered species. A share house is rented for the season by a large group of people who divide up the rooms and the weekends.

“Share houses are something that I used to partake in, prior to my moving out to the Hamptons myself,” Mr. Green said. “Generally [they’re] from Manhattan. Generally, they’re young, and they combine their monies to coordinate a share. Sometimes there are full shares, sometimes there were half shares, sometimes there were even quarter shares. It depended on how much money each individual contributed. Depending on the house, you’re going to have anywhere from four to 24 people sharing a house on a given weekend.”

Technically, most share houses are illegal — there have been laws on the books that no more than four unrelated people (by blood or marriage) are allowed to rent a house together. According to Mr. Green, enforcement historically tended to be lax, but later tightened somewhat.

“When I first started in the business, they didn’t do a lot in the way of enforcing those laws,” he said. “But as the Hamptons became more exclusive, property owners next to these so-called share houses would complain frequently regarding the noises, and the more they complained, the more the municipality started cracking down on share houses. They really started emphasizing those laws probably about 12 to even 15 years ago.”

More enforcement plus higher home values put the squeeze on share houses, making them rarer. Mr. Green said even a decade ago it was hard to find share houses to any great extent.

“Share houses were the domain of the 20- and early-30-something crowd,” he added. “And frankly they’ve been priced out of the marketplace in general. … That house that was once upon a time a nice house with four bedrooms and three bathrooms for $45,000 and a pool: that doesn’t exist anymore. That same house today is probably starting at $100,000 for the season. The younger crowd has really been priced out of the Hamptons rental market.”

The pandemic didn’t only accelerate the price increases, it made share houses less safe. Share houses involve lots of people sharing space and usually partying, both big COVID no-nos. With it being a strong sellers’ and rental market, homeowners could be picky.

“Owners, since the supply is so low, can be very particular,” said Cindy Scholz, an associate broker at Compass. “An owner does not want to rent to a share house.”

Ms. Scholz also pointed to new technologies that made surveillance of share houses easier.

“I think in the past five years, more people have created these smart homes,” she explained. “So you have a Nest camera or something like that … it’s a hundred dollars to put a camera up. Owners can actually see who’s coming and going. It’s harder to kind of scoot around the truth.”

Additionally, Ms. Scholz described the shift in the types of properties available within the East End market. As people fix up their homes and try to make their assets more appealing, they’re less likely to want to rent to share houses.

“Share houses, in my mind, are usually lower-end property,” Ms. Scholz said. “The Hamptons market is really heading towards an ultra-luxury market. Even places that at one time might’ve been more affordable, like Montauk, [which] was always a destination for share houses. Now Montauk is very much a luxury market.”

Ms. Scholz also tied the price increases in the rental market to general trends within the area.

“The cost of going out to eat, the cost of cocktails, the cost of groceries have all gone up,” she noted. “I mean, inflation is a real thing. And I think that this younger demographic who used to be able to maybe get away with having a cheaper version of the Hamptons is no longer able to do that.”

So where is a 20- or 30-something with some cash and a desire to get away from the city to go?

“I am hearing that people are getting some share houses on the North Fork,” Ms. Scholz said. “But I would say largely people are priced out of that share house market.”

Enzo Morabito of Douglas Elliman pointed to a number of factors leading to the decline or death of the share house. Fewer nightlife spots are one cause he noted.

“Now there’s no clubs, there’s very few of them,” Mr. Morabito said. “And that’s changed the landscape of the young people. Where before it used to be — I mean, the share households all came out here and there was a whole culture that started out of that. Some of the towns right now that exist, like Remsenburg: I bet you can call anyone in Remsenburg who’s in their late 60s, 70s and ask them how they met, they met through share houses, and they ended up settling there.”

Mr. Morabito also cited low inventory, people staying in their homes instead of renting them, competition, and low interest rates on mortgages, which push people to buy instead of rent.

“Whoever’s holding the inventory right now pretty much controls the market,” he said.

Although Mr. Morabito felt that the pandemic hadn’t shifted the demographics of buyers he encountered, he explained that where buyers were looking had changed, with the west of the Shinnecock Canal seeing surges.

“It used to be that west of the canal wasn’t really ‘The Hamptons.’ ... If you made it, you had to be east of the canal, but with the pandemic it really shook up values,” Mr. Morabito said.

As offices reopen and more aspects of New York City are open for business, his clients have proximity to the city as a priority.

“If you really are a worker bee and you have to drive from here to New York, from Westhampton Beach it’ll take you an hour, depending on traffic, [maybe] an hour and a half. East Hampton, safely, is three,” he said.

Mr. Morabito also noted that some young people — maybe those same ones who would’ve been part of a share house — are settling west of the canal as well.

“The millennials and the hipsters discovered that, just like they discovered Brooklyn,” he said. “It’s the same thing here. They’re buying small cottages in Hampton Bays.”

Price, however, seems to be king. As home values continue their climb, basic necessities as well as going out become more expensive, and the Hamptons-ness of the Hamptons only intensifies, it seems the humble share house may have met its end.

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