Though the moratorium passed the Common Council unanimously last month before being vetoed by Mayor Rick Rector Friday, four council members changed their tune during Tuesday night’s vote, voting against overriding the veto.
The moratorium was meant to pause new STRs from coming online while the council hashed out legislation further regulating the rentals.
Alderman John Rosenthal has been pushing for legislation making it illegal to operate “non-owner occupied STRs” – rentals the operator doesn’t actually live in. This is meant to level the playing field between traditional hotels and STR operations and to address the city’s affordable housing crisis.
Tuesday’s vote, which needed eight of 11 council members on board to pass, fell along familiar lines.
Though 10 of the council members are democrats, with the 11th, Alderman Dominick Merante, an independent, councilmembers have split into two wings since they came into office two years ago. The more radical wing, which includes Common Council President Thomas DePietro and Alderman Kamal Johnson, the mayor-elect, voted to override the veto. The other band, consisting of Merante and three others, voted against.
The four dissenters gave different reasons for their votes.
Alderman Rich Volo noted there had been “zero economic studies” on how the moratorium would impact the city and pointed to the budget, passed by the council directly before their initial vote on the moratorium, which calls for $60,000 more in revenue from the city’s existing lodging tax.
The city already taxes STRs and traditional hotels at four percent. With no more STRs coming online, Volo expressed doubt this revenue would materialize.
In an interview last week, Volo said the city’s fund balance – its rainy-day fund – was getting disconcertingly low, suggesting losing revenue from new STRs wouldn’t be fiscally responsible.
He also called the moratorium “a knee-jerk reaction to the housing issue” on his blog and pushed for the city to instead take up the recommendations in the council’s 2017 Strategic Housing Plan.
Alderman Rosenthal responded directly to Volo’s comment at Tuesday night’s vote, saying there was no “silver bullet” for the city’s housing woes, and this was merely one tool the city could use. The council was also looking at re-zoning the city and creating a new comprehensive plan, he said.
Alderwoman Eileen Halloran also voted against overriding the veto, asking Rosenthal before her vote if he would consider shortening the moratorium to six months. Rosenthal said nine months was the maximum time allotted, and the moratorium would be null once the new legislation was passed, which he predicted could be done in less than nine months.
However, Rosenthal stuck with the original length for the moratorium, and Halloran voted no.
Aldermen Rob Bujan and Merante said they did not oppose regulating STRs, but a moratorium was unnecessary.
DePietro voted last, when it was obvious the override would fail, and took a swing at the dissenters.
“Democracy is not simple. This has been the most open process for creating a law…ever in the city. So now, certain councilmen who will not be with us in the future have decided we have too much democracy,” he said.
Aldermen Volo was voted out earlier this year, and Alderman Bujan will leave his position after unsuccessfully running for council president. Both voted against the override.
There was clapping from a few members of the audience when the override failed.
The city was getting a new mayor in the new year, Rosenthal said, and the moratorium could be reintroduced.
Alderman Johnson was elected in November after winning the democratic primary against Mayor Rector last summer. He voted to override the veto, and affordable housing was a major talking-point of his campaign.
Draft legislation making non-owner occupied STRs illegal was floated in July by Rosenthal, but the complexities of defining which STR units are owner-occupied has held back the legislation.
There are more than 350 STR units in the city of 6,200, according to the lodging tax roll, which was acquired by The Other Hudson Valley in October through the Freedom of Information Law. The average STR owner operates 2.5 units, though they are usually within the same building. A handful of property owners operate STRs in multiple buildings.
Restricting non-owner occupied STRs is meant to free up housing stock for renters, who have been squeezed by more than a 300 percent jump in rents since 2000. Rosenthal has also said real estate speculators with an eye for converting rentals to STRs could be further inflating rental prices.
Mayor Rector’s veto message on Friday stated the crafting of legislation regulating STRs didn’t need a nine-month moratorium, given the period already spent discussing such legislation. It also stated the moratorium does not address affordable housing, and it gave the appearance that Hudson was against development.
The moratorium was not “an anti-business, economy-crushing” measure, Rosenthal said Tuesday, as it would allow current STRs to continue operating, and includes a hardship clause for those in the midst of setting up STRs.