The bill, which still must be signed into law by Mayor Kamal Johnson, seeks to stop short-term rental operators, such as those using Airbnb, from renting out multiple properties or listing properties where they do not reside. The bill is meant to preserve the character of neighborhoods and to help alleviate an affordable housing crisis in the rapidly gentrifying city.
The Common Council vote was unanimous, though two members expressed qualms about the bill, the end-result of a process that began in the summer of 2019.
Hudson, with a population of 6,000, has increasingly become a destination for day-tripping downstaters during the last decade. Three hotels have opened since 2018 to accommodate them, and STRs have spread across the city.
Residents and elected officials worried STRs constricted the housing market, altered the community character of neighborhoods, and that Airbnb guests were loud and not invested in the city.
The bill’s passage follows a six-month moratorium on new STRs that began early this year.
The law would limit STR operators to renting out 3 units – a unit is defined as a rental with its own entranceway – and mandates the operator must live on the same tax parcel as the units. If a resident wants to rent out their personal abode, they must reside there at least 50 days a year, and can rent it out no more than 60 days a year.
From the beginning, Alderman John Rosenthal, who crafted the bill as the chair of the legal committee, said the law was not meant to go after people renting out their own homes, but instead was intended to reign in people who operate multiple STRs, a practice akin to running unregulated hotels.
Rosenthal expressed reservations about the bill’s final form in an interview just before the vote, but said he supported the law regardless.
The main point of contention in the bill is the amortization period – the grace period for property owners currently operating STRs on multiple properties. Rosenthal said he wanted the amortization period to be up to five years.
“A longer amortization period does more to protect the law from (legal) challenge and provides additional revenue for us to do real housing planning initiatives…I felt that it was a desire to build wider consensus with the community – it felt like the proper thing to do,” he said.
Hudson imposed a four percent lodging tax on STRs and traditional hotels in 2017. The tax raised about $310,000 in 2019, according to the city budget. Though most STRs would still be able to operate under the new law, Rosenthal estimated the city was giving up $150,000 in revenue over the next five years with the law, money that could be spent further addressing the rental crisis.
Rosenthal, who had repeatedly expressed during the bill’s crafting it was not “a silver bullet” for housing issues, said Tuesday the law’s effect on the rental market would take time, and that it would free up far less housing than was needed.
A list of registered STRs in the city was acquired by The Other Hudson Valley at the end of last year through a Freedom of Information Law request. It shows there are 143 individual properties registered within the city, but that most STR operators only own a single STR.
At the time, only nine people operated STRs at multiple addresses, though some people rented out multiple rooms at one address.
There was concern the new law pulled the rug out from under STR operators who were essentially promised they could continue to rent out their properties if they registered and started paying the lodging tax when it passed in 2017.
Alderwoman Jane Trombley brought up this point in comments during the vote.
“For me, this was a lesson learned…now we’re taking back what the (2017) law was,” she said. “We should have thought this through a little more.”
Rosenthal said he still believed in the bill’s foundations, but the amortization period was too short and other council members had considered the law too dogmatically.
“This rush to do it from this ideological bent is just maddening to me, [as is] the way in which people are thinking about the issue,” he said.
The bill took so long to come to fruition partially because of disagreements over a moratorium on new STRs that was first proposed the summer of 2019. The moratorium was intended to pause a rush of new STR registrations while the city decided on a law to limit them. A nine-month moratorium was unanimously passed by the Common Council in November 2019 but was controversially vetoed by outgoing Mayor Rick Rector the next month. The Common Council needed a two-thirds majority to override the veto, but the override spectacularly failed after several council members changed their opinions of the moratorium in between the votes.
Mayor Kamal Johnson signed a six-month STR moratorium in February, paving the way for the new law.