Overview: Are Short-Term Rentals Allowed on Shelter Island, NY?

Explicit answer: Yes—short-term rentals are allowed on Shelter Island, but they are tightly regulated. Town Code §105-30 makes 14-day-or-less rentals generally prohibited unless the owner qualifies for one of three permitted categories:

• Owner-occupied premises (owner or specified immediate family on-site during rentals), or
• Homesteaders Hardship License (limited frequency windows for qualified primary residences), or
• Limited Commercial Vacation Rental License (one property per owner; one rental every 14 days; strict eligibility and compliance obligations).

In addition to licensing and registration, all rentals (regardless of term) must undergo a safety inspection (either third-party certification or Building Department inspection), comply with the Town’s occupancy rules, and meet all state/fire code and building code requirements.

How to Start a Short-Term Rental Business on Shelter Island

1. Confirm eligibility and select a licensing pathway:

• Owner-occupied route: An owner (or specified immediate family member) must be simultaneously domiciled on the same or immediately adjacent lot (including accessory structures) during each rental term.
• Homesteaders Hardship License: Available only if the property is the owner’s primary residence receiving a Basic or Enhanced STAR exemption; owner’s gross income (excluding net rental income) must be less than 500% of federal poverty guidelines; frequency limits apply.
• Limited Commercial Vacation Rental License: Available if you do not qualify for the owner-occupied or homestead categories and have no prior vacation-rental license suspensions/revocations; only one license per person/entity; you may license only one property.

2. Complete the mandatory safety inspection:

• Provide a written certification from a licensed architect, engineer, or home inspector that the rental unit fully complies with:
  • New York State Uniform Fire Prevention and Building Code
  • Property Maintenance Code of New York State
  • Town of Shelter Island Codes
• Certification must include: number of bedrooms per building plans on file, square footage of each bedroom, locations of all smoke and CO detectors, and a description of improvements shown on the survey.
• Alternatively, request an inspection by the Building Department (appointments Mon–Fri 9:30 AM–3:00 PM or alternating Saturdays; call 631-749-0772). Ensure all battery-operated devices (smoke/CO alarms, pool door alarms) are working and batteries are not removed prior to inspection; removing batteries results in a failed inspection.

3. Register and license:

• Register the rental with Code Enforcement (valid for two calendar years; no fee).
• If renting 15+ days (long-term), submit the Long-Term Rental or Renewal for Vacation Rental or Homesteaders Hardship Registration Form (no fee).
• If renting 14 days or less (vacation rental):
  • First-time applicants: submit the Vacation Rental License Application; $150 fee; license expires 12/31/2025.
  • Renewals: submit the Long-Term Rental or Renewal form; $150 fee; license expires 12/31/2025.
• Submit all forms and questions to Michael DeSanctis, Building Department.

4. Notify the Town before each rental:

• Use the Rental Registry Notification Form to notify the Town of each rental’s dates and registration number; no fee.

5. Meet advertising and guest communication obligations:

• Every advertisement must include: registration number, total bedroom count (not exceeding building plans), and minimum permitted rental term.
• Distribute the Good Neighbor Brochure to tenants prior to or at the start of the rental (considered part of the rental agreement).
• Provide owner’s personal cell phone number and a local contact person (name, address, phone, email) to the Town and all neighbors within 200 feet.

6. Enforce occupancy and good-neighbor standards:

• Occupancy limit: not more than two persons per conventional legal bedroom; children age three and under do not count toward occupancy.
• Comply with noise, lighting, and parking regulations; you are jointly and severally liable with your tenants for violations; penalties run with the property.

7. Maintain compliance and renew:

• Licenses and permits run the calendar year; both expire on 12/31/2025 and must be renewed.
• Keep certificates current; update addresses for service of process and ensure agent designation remains accurate.

Required Documents, Permits, Licenses, and Guidelines

• Safety Inspection Certification (or Building Department inspection) per Town Code §105-10 E.
• Long-Term Rental or Renewal for Vacation Rental or Homesteaders Hardship Registration Form (PDF)
• Vacation Rental License Application (first-time 14-day-or-less rentals) (PDF)
• Rental Registry Notification Form (for each rental) (PDF)
• Good Neighbor Brochure (PDF)
• Rental Safety Certification Form – Safety Inspection Checklist (PDF)
• Notarized Self Checklist (Town’s vacation rental application requirement)
• Proofs for Homesteaders Hardship (Basic or Enhanced STAR exemption; federal income tax returns for income verification; destroyed or returned after review)
• Corporate disclosure (for partnerships/LLCs/trusts/corporations) listing all owners and confirming no other Vacation Rental Licenses are held or applied for by any principal

All forms and submissions to: Michael DeSanctis, Building Department, mdesanctis@shelterislandtown.gov.

Specific Regulations: City/Town, County, and State

Town of Shelter Island (Chapter 105 – Rental of Real Property; most recent amendment requires safety inspections):

• Safety inspections required for all rentals (owner certification by licensed professional or Building Department inspection).
• Vacation rentals are generally prohibited unless qualifying under owner-occupied, homestead hardship, or limited commercial license.
• Owner-occupied premise: owner (or specified immediate family) must be domiciled on same/adjacent lot during rental.
• Homesteaders Hardship License:
  • Property is owner’s primary residence receiving Basic/Enhanced STAR.
  • Owner’s gross income (less net rental income) < 500% of HHS Poverty Guidelines (verified each registration period with tax returns).
  • Frequency: one rental per 7-day period between Memorial Day weekend and Labor Day; one rental per 14-day period at all other times.
  • One license per qualifying owner; cannot combine with other vacation rental categories to increase allowed rentals.
• Limited Commercial Vacation Rental License:
  • One property per individual/entity.
  • Frequency: one rental per 14-day period (period runs from first day of the initial rental term and continues for the following 13 days).
  • Valid for two calendar years (concurrent with registration); fee set by the Town Board ($150 currently).
  • Multiple licenses prohibited; not transferable; agent for service of process required (Town Clerk or local agent).
  • Must disclose all principals for corporate/other entities; prohibit issuance if any principal already holds or has applied for a Vacation Rental License on another Shelter Island property.
• Occupancy and structure:
  • Total occupancy ≤ two times number of legal bedrooms (children under 3 do not count).
  • Number of bedrooms used as bedrooms cannot exceed number indicated on building plans on file with the Building Department.
• Advertising:
  • Must include registration number, bedroom count, and minimum permitted rental term.
• Registration and notifications:
  • Two-year registration required (no fee); notify before each rental (no fee).
• Enforcement and penalties:
  • Violations deemed unclassified misdemeanors; escalating fines and potential imprisonment.
  • Progressive penalties: first offense (up to $250, waived if owner promptly complies), second offense (up to $2,000 and/or up to 15 days), subsequent violations (up to $5,000 and/or up to 30 days).
  • License suspension/revocation for repeat offenses (up to 6 months for second offense; up to 12 months for third; permanent for fourth or egregious violation).
  • Town may seek civil injunctions; fraudulent information is a misdemeanor (up to $5,000 fine and up to 3 months imprisonment).
  • Owners are jointly and severally liable with tenants for quality-of-life violations; penalties run with the property.

Suffolk County:

• County Hotel/Motel Tax typically applies to rentals shorter than 30 days; hosts must collect and remit the tax. The amount and mechanics vary; verify current rates and requirements with the County.

State of New York:

• Rental properties must comply with New York State Uniform Fire Prevention and Building Code and the NYS Property Maintenance Code.
• Additional state-level short-term rental registration/tax obligations can exist; consult the NYS Department of State and Department of Taxation and Finance for statewide rules and any reporting requirements.

Contact Information

• Building Department (forms, inspections, licensing):
  • Phone: 631-749-0772
  • Email: mdesanctis@shelterislandtown.gov
  • Department page: www.shelterislandtown.gov/182/Building-Department
• Police Department (complaints, noise/disturbances):
  • Phone: 631-749-0600
• Town Hall / Main Contact:
  • Address: 38 North Ferry Road, Shelter Island, NY 11964-0970
  • Phone: 631-749-0291
  • Website: www.shelterislandtown.gov
• Town Clerk (agent for service of process designation):
  • Town Clerk’s Office, Town Hall

Source Pages

• Property Rentals (registrations, forms, contact): www.shelterislandtown.gov/202/Property-Rentals
• Rental Regulations (Town Code Chapter 105 – full text): www.shelterislandtown.gov/DocumentCenter/View/248/Rental-Regulations-PDF
• Town Code §105 – Rental of Real Property: ecode360.com/36794269?highlight=&searchId=17967055808265799#36794269
• Town Code §133-17 A. – Accessory Apartments: ecode360.com/7732421?highlight=&searchId=17967102519592200#7732421
• Building Department: www.shelterislandtown.gov/182/Building-Department
• Forms and checklists (via Property Rentals page): www.shelterislandtown.gov/202/Property-Rentals
• Additional local commentary (informational): www.penelopemoorerealestate.com/short-term-rentals-and-the-rental-market/
• Third-party management overview (informational): www.gosummer.com/vacation-rental-management/shelter-island-new-york

Key takeaways for investors:

• Short-term rentals are permitted, but only in specific, tightly controlled scenarios; the most viable paths are owner-occupied rentals or the limited commercial license (one rental per 14 days).
• Compliance is actively enforced; safety inspections are mandatory, penalties escalate rapidly, and many obligations run with the property.
• Accurate registration, timely notifications, proper advertising, and consistent good-neighbor practices are essential to protect your license and avoid fines or suspension.