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Town blocks many vacation rentals: Most owner-occupied properties limited to year-round use

Two concerns spurred the Town Board’s latest change in rental laws on the Island — safety and the need for more year-round housing.

For the first time in memory, a proposed change in housing rules went without comment at a public hearing held on May 16, followed by a unanimous 5-0 vote by the Town Board.

The newly adopted change mandates that owner-occupied properties can’t provide vacation rentals unless they receive a “homesteaders hardship license.”

This license is granted only if owners meet financially specific criteria, which proves that failure to offer properties on a short-term basis would cripple their ability to meet expenses.

An owner would have to prove that gross income without rental income would be less than 500% of the U.S. Department of Health and Human Services poverty guidelines.

Anyone who qualified for a hardship license to maintain a short-term rental won’t be able to offer a year-round rental.

The stated reason for blocking most owner-occupied rentals from being used as vacation rentals is to provide more needed housing year-round on the Island.

The new legislation also requires all rental properties to pass safety inspections. They must have valid certificates of occupancy or certificates showing they comply with state, county and local regulations affecting fire and building codes.

The total number of bedrooms must match the number indicated on records filed with the Building Department. Each bedroom can’t house more than two people, except in the case of children ages 3 or below,who are not counted in total occupants allowed in a room.

The need for action on safety emerged following a fire in a vacation rental house in Noyac last August in which two sisters, ages 19 and 21, lost their lives and three other family members were injured.

In the Noyac case it was determined the electrical system in the vacation rental was not in compliance with the National Electrical Code, and smoke detectors were inoperable outside the upstairs bedroom where the sisters were sleeping.

Shelter Island plans to hire an experienced inspector on an hourly basis to work nights and weekends to ensure violations are investigated and actions taken if the owners are not in compliance.

The need was recommended by Town Attorney Stephen Kiely and Senior Building Inspector Reed Karen, since the existing Building Department staff has been overwhelmed with applications for permits and ensuring new structures or additions meet approved plans.