On September 7, 2026, a new bayfront house at 29 Wills Point Road in Montauk closed at its full $23 million asking price. A buyer had come forward three days after it was listed in July. The Piero Lissoni-designed spec house has seven bedrooms and about 10,000 square feet on 1.6 acres above Fort Pond Bay at Culloden Point. The New York Post reported that the sale set a record for a Montauk home not on the ocean. The earlier marks were $14 million in 2022 and $17 million at 18 Maple St. last year. The listing broker told the Post he had closed three Montauk oceanfront deals over the past year, and every one sold for less.
The Post's explanation was space, and the rules that govern it. The broker said the house was permitted before East Hampton Town's tougher size limits took effect. That point does more to explain the price than the view. Across Montauk, Wainscott, Amagansett and Springs, the most limited thing a buyer can now acquire is the right to build a large house on a lot, and that matters more than any particular stretch of water.
Two Laws, Four Months Apart
The town tightened its rules in two steps. Most coverage, including the Post, describes only the first one clearly.
The first step was Local Law 24 of 2024, adopted December 5, 2024. It cut the maximum size of a single-family residence from 20,000 to 10,000 square feet of gross floor area. It took effect March 1, 2025. Applications and permits that were complete or valid before that date were exempt.
The second step changed the formula that applies below the cap. The Town Board voted it through on March 20, 2025, and the town attorney's record lists Local Law 6 of 2025 as adopted March 21. It lowered the allowance from 10% of lot area plus 1,600 square feet to 7% of lot area plus 1,500 square feet, effective July 1, 2025. A corrective law adopted in January 2026 kept that formula and the 10,000-square-foot ceiling. The current code text reads "7% of lot area plus 1,500 or 10,000, whichever is less." On lots with more than one residence, the cap applies to all of them combined.
These rules are part of the town zoning code, which covers the unincorporated hamlets. East Hampton Village and Sag Harbor Village have their own codes, so the formula does not apply there.
What the Formula Does to an Acre
The figures below come from applying the old and current formulas to common East End lot sizes. They are illustrations calculated from the code text. They are not determinations for any specific parcel, which will also face setbacks, coverage limits and environmental review.
| Lot size | Old formula, 10% + 1,600 sq ft | Current formula, 7% + 1,500 sq ft | Difference |
|---|---|---|---|
| 0.5 acre | about 3,780 sq ft | about 3,020 sq ft | about 760 sq ft |
| 1 acre | about 5,960 sq ft | about 4,550 sq ft | about 1,410 sq ft |
| 1.6 acres | about 8,570 sq ft | about 6,380 sq ft | about 2,190 sq ft |
| 2 acres | about 10,310 sq ft | about 7,600 sq ft | about 2,710 sq ft |
Two numbers in that table matter most. On a 1.6-acre lot like the one at Wills Point, the current formula allows about 6,380 square feet, roughly a quarter less than before. And under today's formula, a lot has to be about 2.8 acres, or roughly 121,000 square feet, before the 10,000-square-foot ceiling comes into play at all.
The roughly 10,000 square feet reported for Wills Point is a press figure, and it may not match gross floor area as the code defines it. The code leaves out several kinds of space, so a house can have more livable area than its GFA. Even so, a new house of that scale on 1.6 acres is one the current formula would not allow. The broker told the Post it could not realistically be built on the ocean today: "It's pretty much impossible to amass a piece of oceanfront property that would allow for this type of house to be built."
How the Code Counts a House
GFA under the town code is not the number on a floor plan brochure, so the definition affects a lot's value as much as the formula does. As currently written:
- Basements and attics are excluded, along with any space with a ceiling under five feet.
- Stairwells and interior spaces with ceilings over 15 feet count twice. A double-height living room uses up floor area quickly.
- An attached private garage counts toward the house only for floor area above 600 square feet.
- Open-air porches and roofed patios attached to the main house are excluded. The same features attached to an accessory structure count toward that structure.
- Detached accessory buildings are regulated separately. The adopted text generally limits them to under 600 square feet, and a pool house is limited to 200 square feet plus as much as 400 square feet of open-air appendages.
The formula limits how large the main house can be. The accessory rules mean the remaining space can't simply move into a barn or a pool pavilion. A buyer who wants a compound with a large main house, guest space, and room for tennis or padel courts needs more land than before, along with an understanding of which elements count toward which limit. The Post reported that buyers with that kind of wish list are going north of the highway and inland, where bigger parcels still exist.
The House That Already Stands
This is where the rules start to affect transactions. A house built or permitted under the old rules may now exceed what its lot allows. The town code generally lets a lawfully existing nonconforming structure be enlarged, altered, repaired or reconstructed only if its degree of nonconformity does not increase. The code defines reconstruction as replacement in place and in kind of all or a substantial part of a building. In sensitive locations it may also require natural-resource permits or bluff and dune variances.
When the size rules were first proposed in 2024, the East Hampton Star described them as applying to new construction going forward rather than retroactively. The published code does not say plainly what a planned full teardown and rebuild of an over-limit house can keep. A buyer counting on existing square footage should expect that question to come up in due diligence, and the answer will depend on the specific lot and the town's review.
Some flexibility exists, though not much. During the 2025 debate over the formula, the East Hampton Star reported the supervisor saying that a homeowner could ask the Zoning Board of Appeals for relief to convert otherwise permitted attached-garage area into living space.
The Same Shortage Shows Up in the Q3 Numbers
The Wills Point sale and the third-quarter market data point the same way. In the Hamptons, supply limits are shaping prices more than buyers are.
Jonathan Miller of Miller Samuel published his Q3 2026 Hamptons analysis on October 8. It put the Q3 2026 median sale price at $1,875,000, down 6.3% from a year earlier. That drop came after six straight quarters at the first-, second- or third-highest levels on record. Sales between $1 million and $5 million made up 65.5% of all Q3 2026 sales. The share of sales above $5 million was the lowest in five quarters. Long Island Business News reported 973 Hamptons listings at the end of Q3 2026, down 22.5% from 1,256 a year earlier. Its separate single-family series put the Q3 median at $1.995 million. The two medians measure different groups of sales and are not interchangeable.
Miller told The Real Deal that the drop reflected which homes sold, not what homes were worth:
"That's why the overall prices dropped, not because prices are declining, but because there's less at the top and more in the middle."
He also told the outlet that inventory was falling almost three times faster than sales. Only 5% of Q3 2026 deals involved a bidding war, a pace he described as tight but "not a boom."
When the top tier is this thin, a new large house in an unusual setting faces little competition. Miller connected that directly to the size rules in the Post: "The limits on home size construction force a growing number of buyers to look for alternative locations to create a house the size they want, and that seems to be north of the highway."
He added two cautions. He called the inland megadeals "still a very small niche of the super luxury market, in the very early stages of evolving," and said "oceanfront pricing continues to expand faster." The Post's example was a contemporary oceanfront house on Beach Lane in Wainscott that sold off-market earlier this year for $59 million, up from $45 million in 2021.
Questions Buyers Ask About the Cap
Does the formula apply in East Hampton Village or Sag Harbor Village? No. The town zoning code covers East Hampton Town outside its incorporated villages. Both villages have their own codes.
Is the 10,000-square-foot cap the number that usually limits a house? On most lots, no. Under 7% of lot area plus 1,500 square feet, the formula limits the house first on lots smaller than about 2.8 acres. Lots created under the town's Chapter 193 open space preservation rules are exempt from the formula with sufficient proof, though they still have to meet building coverage limits.
Did anything change in 2026? A law adopted January 22, 2026 corrected cross-references so the code's tables matched the 2024 and 2025 laws. It kept the same formula and ceiling.
Has the law measurably raised prices for older, larger houses? No published local data has measured that yet. The Wills Point sale and Miller's comments show which way the market is moving. They do not put a number on the premium.
Before you decide what a property can become, it helps to know what its lot allows under today's formula. Deborah Srb works with buyers and sellers across East Hampton Town to read a parcel's acreage, existing structures and permit history together with its asking price, so each side knows what the square footage is worth before negotiations begin.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
