Tuesday, July 14, 2020

STRs and Hudson

Yesterday, the HDC Emergency Business Task Force held a roundtable discussion of the proposed law to regulate short term rentals (STRs) in Hudson. The proposed law can be viewed here. Seventy-eight people participated in the Zoom meeting.

The meeting started off with Bob Rasner, president of the HDC board, presenting a study that he and HDC executive director Branda Maholtz had done to provide factual evidence that "Hudson's economy is heavily dependent on visitors." The entire study can be found here, but some of the more salient facts are these. In 2019, visitors staying overnight in Hudson paid $346,193 in lodging tax and $692,386 in sales tax. As the study points out: "Before they dined or shopped they paid over ONE MILLION DOLLARS in taxes." The study also provides these statistics:
In 2019 there were 492 rooms available each night in Hudson. Each of those rooms brings a minimum of $32,648 visitor spending to the city each year. Every room contributes $703.64 in lodging taxes. Every room contributes $10,438 in restaurant charges. Every room contributes $2,280 in sales taxes. 
The study also pointed out that in three significant revenue lines--lodging tax, sales tax, and parking fees--the City is falling significantly behind last year and what was budgeted for this year.
  • Lodging Tax--in 2019, the City budgeted $280,000 and took in $346,193; in 2020, the City budgeted $340,000 and in the first half of the year has taken in $24,705.
  • Sales Tax--in 2019, the City budgeted $1,700,000 and took in $1,791,922; in 2020, the City budgeted $1,900,000 and in the first half of the year has taken in $419,099.
  • Parking Fees--in 2019, the City budgeted $315,000 and took in 346,864; in 2020, the City budgeted $350,000 and in the first half of the year has taken in $94,829.
Rasner commented, "The City budget is falling way short on revenue from these sources, and now we are looking at restricting them."

In talking about the purpose of the law, Alderman John Rosenthal (Fourth Ward) spoke of the large number of houses that are being converted to STRs and the need for workforce housing and claimed that "STRs contribute to the increase in rent." Responding to that, Rasner asked: "Does the [Legal Committee] have any factual evidence that this legislation will have any effect on affordable housing?" Rosenthal did not have a clear answer to that.

Interestingly, Rosenthal, who chairs the committee that drafted the legislation, seemed to want to distance himself from the current draft. At one point, he said he wanted a "simple law," with a "simple residency requirement." He also expressed the opinion that the second draft--the one now being considered--"dives too far." One was reminded that when Mayor Rick Rector vetoed a nine-month moratorium on new STRs in December 2019, he pointed out that the Legal Committee had already been working for more than a year on legislation and during that time "there could have been common sense legislation such as 'owner occupied' regulation put into place." 

Rosenthal maintained that the draft "is not necessarily the one that will be passed next month." When Monica Byrne observed that what he was saying was inconsistent with the draft legislation, Rosenthal said he had decided to "put this out to get input" to arrive at "sensible legislation." He also reported he had gotten responses from people who "totally support the concept." 

At the end of the meeting, Rasner commented on how respectful the group had been in its discussion, which was true, but he obviously wasn't monitoring the chat. When the new owner of two buildings that were formerly part of the Inn at Ca' Mea remarked, "Taking away beds, we will strangle the city's economy," Dylan Weidman retorted in the chat, "Y'all wealthy bastards are strangling our community."

The link to the recording of the Zoom meeting can be found here.


  1. I would like to first of all tip my hat to Alderman Rosenthal for engaging with citizens regarding a controversial piece of legislature; he handled the hot seat well and should be commended for getting out in front of a difficult topic.

    I have long been a proponent of reasonable restrictions on short-term rentals. Our housing market is small in Hudson, and STRs take rentals out of the market that in a normal economy would prevent us from growing out service sectors that aren't tourism-related. As we are now discovering, tourism is sometimes a fickle beast.

    Having said that, our city's economy is at this point in crisis, and there aren't any magic lamps to rub to close the revenue gap we're going to face this year. This is a terrible time to make decisions that might spook any part of our economy, encouraging struggling small businesses dependent on tourist dollars to shutter their doors. We need more information to make a data-driven decision that helps us move away from dependence on tourism; we currently lack that data.

    I also take issue with Weidman's point, which I found to be an especially reductive kind of arrogance, that 'Y'all wealthy bastards are strangling our community.' Restrictions on STRs will affect hotel and restaurant workers, shop owners, and myriad other residents who are currently dependent on tourist dollars to make ends meet. We don't all have trust funds, and until we have a reasonable path to step off our dependence on tourism, those of us without trust funds need those dollars to pay our bills.

  2. unfortunately, there are few jobs in hudson for those who are projected to live in "affordable worker housing". there are no jobs, especially now. the economy is on the brink of a sever recession.

    Where is all this money coming from to build the housing for all of those unemployed people ?

    Tourism is a really generator of sales taxes and jobs that help the Hudson community survive.Tourism also supplies jobs to people with non technical skills.

    Proposals for worker housing with no supporting research should not be considered.

    Hudson has a real business now and it should be supported. It is all we have-- why kill it with ill advised legislation in the middle of the onset of a recession, or perhaps worse.

    It makes no sense for the those who have invested their lives here.

    1. The money is coming from state and federal programs, with huge tax benefits to developers, who often re-sell and move on, leaving the local municipality to grapple with the everyday costs. And in case anyone missed Gossip’s post on Hudson Housing Authority the other day, HHA is still looking to add to more low-income apartments on lower State St., potentially the 70 they proposed last year. Added to Galvan’s 70 proposed units on N. 7th, plus a potential other 70 on Galvan’s original site across the street, which was in the first proposal, we have another 210 potential low income units in a town that can’t meet its budget as it is, and has a dearth of middle income housing, but is already overbuilt in low income housing. What ever happened to the proposal for middle income apartments by Redburn? They were shot down and moved on. Maybe the city should reach out to them.

  3. From what I understand: All lodging properties in Hudson are essentially empty - no guests. But if you look down Warren Street there are people walking around, most not local. So. Where are they staying. If not in the "regular" places like bandb's and hotels, then it must be in AirBnB's. So cut off the tax from those places and add the tax NOT being collected by the usual places and where does Hudson find itself? With an even huger short fall than before. Stupid and just plain dumb.

  4. I made some lengthy (sorry about that) comments about STRs on Gossip’s blog last Thursday. It seems there are a lot of people opposed, but they aren’t an organized group. Last year the town of Chatham tried to pass similar laws, organized, and shot it down.

    1. Your comments last week were kind of brilliant.

  5. As a general rule, regulation of a sector of an economy to create social outcomes often comes with externalities, good and bad. Force multi dwelling unit owners to chose between a competitive return on their investment and a loss, and most (hopefully all) will opt to exit the market. How? By selling. To whom? Those that can afford the cost of living in an area of the country with growing demand. The result? Either a single-family home OR more expensive units in the MDU. In either case, the cost of housing in Hudson will only increase. Externality? Definitely. Negative? Definitely: rents have to rise in such a market or the property becomes owner-occupied. Is there a positive externality? Yes -- property values in Hudson will continue to climb and those who already own will see significant asset appreciation. Somehow, though, I don't think that's what the drafters seek.

  6. I sent an email with my comments and questions to John Rosenthal. I received no response. It was not in support of doing anything right now, given the current state of the city's finances.

  7. Alderman Rosenthal responded to my email by saying the current draft would be substantially revised but the core of the legislation would still be a requirement that STRs be operated by full-time residents of Hudson. He said this requirement is not unreasonable and predicted it would not adversely affect tourism, but he did not say what the reason was for the law.

    I'm planning to email the other members of the Common Council to object to the restrictions on short-term rentals. If anyone would like to help try to coordinate this, please contact me at marksiegmund@gmail.com.

    1. I don't have much of a horse in this race, but I suppose the condition of full-time residency is meant to prevent carpetbagging.

      I prefer this condition - the Hudson for Hudson approach - over a laissez faire policy which promotes speculation. The latter can get out of hand very quickly.