HUDSON — The Common Council unanimously approved a proposed short-term rental law that would limit non-resident property owners’ ability to rent their homes.

Mayor Kamal Johnson will hold a public hearing Dec. 3 before signing or vetoing the law, he said.

Under the proposed local law, short-term rentals are permitted in Hudson if a resident of the city operates up to three units on the same parcel where the resident lives.

A person who owns a residence in Hudson and lives there at least 50 days of the year may operate it as a short-term rental unit for a maximum of 60 days per calendar year.

A building or unit that is not permitted to operate as a short-term rental but was entitled to do so prior to the law’s adoption and was operating as a short-term rental prior to March 6 and paid a lodging tax for the period ending May 31, may continue to operate for a year from the date the law goes into effect.

The Zoning Board of Appeals may grant a short-term rental owner an extension to continue operating for up to three years after the law is enacted if the applicant demonstrates substantial investments were made to improve the property. The owner must provide documentation of receipts from the short-term rental and expect revenue through the extension date.

Applicants must also demonstrate the property cannot obtain a reasonable return on their investment if it is used for any other purpose and the lack of return is solely because of the prohibition of the short-term rental and not other market forces.

The zoning board may offer the minimum extension period needed to mitigate the loss of a reasonable return on the investment. The property owner can appeal the zoning board’s decision.

While short-term rentals bring lodging tax to the city, critics argue it saturates the housing market with short-term visitors as local residents struggle to find full-time affordable housing.

The proposed law acknowledges increased tourism activity from short-term rentals has a positive economic impact on the city. It also recognizes that, unlike hotels and traditional bed-and-breakfasts, the revenue from short-term rentals is not typically subject to New York sales tax.

The law would also remove an exception for studio apartments in the definition of a dwelling unit in the Hudson City Code.

“I just wanted to thank [4th Ward Alderman] John Rosenthal and the whole legal committee and everyone who worked on this law and who considered it for so long, and also I wanted to thank the residents of Hudson,” 1st Ward Alderwoman Rebecca Wolff said after the vote.

Johnson had declined to comment on the proposed law until the council voted. The next step will be for the mayor to hold a public hearing before he decides whether to sign off on the law. He said he cannot give his thoughts on the issue before the public hearing.

“But let’s just say it’s passed unanimously and I always support those efforts,” he added.

In December 2019, the Common Council rejected overturning former Mayor Rick Rector’s veto of a nine-month moratorium for short-term rentals.

The failed proposed law would have prohibited anyone from leasing or renting their homes for 30 or fewer days. The goal of the moratorium was to give city officials time to draft regulations for short-term rentals.

Rosenthal planned to reintroduce a new short-term rental bill in 2020 under the new mayor, he said in December 2019, before spearheading the new local law.

“After a long and contentious process, I am happy that our hard work is bearing fruit,” Rosenthal said Thursday.

Rosenthal expects the mayor to sign the resolution into law.

Limiting short-term rentals will help preserve the supply of residences available for longer-term rentals or home ownership in the city, as well as maintaining the traditional character of the neighborhoods, according to the law.

Fifth Ward Alderwoman Eileen Halloran, who voted for the law, expressed concern Thursday for people who came to Hudson to make an investment with short-term rentals and for the lodging taxes that will be missed.

Mark Siegmund, a Hudson property owner and part-time resident, is planning to rent his home on occasional weekends when he is not using it, he said last month when the council was considering the local law.

“The proposed STR (short-term rental) law would only allow us to rent our house out for up to 60 days a year, which is an improvement on zero days a year that was in the earlier draft,” he said. “Though obviously we would prefer not to have restrictions on being able to make economic use of our house.”

The argument the law would reduce housing costs in Hudson by increasing the supply of housing rented on a long-term basis is misguided, Siegmund wrote in a letter to the Common Council.

Siegmund argued creating more housing would be a more effective way to address affordable housing, rather than taking away short-term rentals.

“STRs in Hudson do not just bring in tax revenue, they also promote economic growth and employment in other ways, including by encouraging the hiring of local contractors and workers, housekeepers and property managers, and by creating incentives for local homeowners to purchase furniture and art from Hudson’s antique stores, furniture stores and art galleries,” he wrote.

It is more likely that many of the short-term rentals will be sold to second homeowners from New York City than used as long-term rentals for local tenants, he added in his letter.

But the crucial point of the law isn’t that it will directly affect affordable housing, but will discourage outside investors who do not have concern for the character of Hudson’s community and are not looking for a place to live full-time, Common Council President Thomas DePietro said Thursday. The law would indirectly impact affordable housing because having a lot of short-term rentals takes rentals off the housing market, he said.

“It’s an effort to preserve community character and make Hudson a place that people want to visit and live in,” DePietro said.

“To visit and live in,” he emphasized.

Crafting the law was a community effort, DePietro said.

“Not only did we get lots of feedback from the community, but we also had numerous lawyers contribute aside from our own attorney,” he added.

DePietro pointed out the profitability of the housing market in response to property owners’ qualms about the law.

“Fortunately, this regulation comes at a time where it is quite easy for outside investors to sell their properties at a significant profit,” DePietro said. “And that’s happening already, by the way. I know a number of cases.”

Hudson resident Michael Glickman does not believe the law will impact his short-term rental business because he operates as a hotel, booking guests from and Expedia, not Airbnb, he said Thursday.

But he thinks the law is a bad idea.

“It’s a terrible idea [to limit short-term rentals] because there’s a shortage of beds as it is and I believe this will impact us, and in a negative way, because there won’t be enough places for people to stay,” Glickman said.

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