The Last Shall Be First

Yesterday was a full day of meetings, and almost every one of them involved something worthy of reporting. We will begin, however, with the last meeting of the day: the informal meeting of the Common Council, which began shortly after 7:00 p.m. and went on until 9:16 p.m. The big issue of the evening, which the Council didn't get to until 8:00 p.m., and which explained why the meeting was attended by seventy-six people, was the proposed law to regulate short term rentals in Hudson.

At the outset of the discussion, it was made clear that there would be no discussion about the need for the law. The only thing open for discussion was determining the length of the amortization period--the amount of time property owners operating what the law would render illegal short term rentals (STRs) had to convert the units to long term rentals or sell the property. An earlier iteration of the law set the amortization period at three years; last night, the choice was between five years and one year.

John Rosenthal (Fourth Ward) voiced his support for a five-year amortization period. He argued that a longer amortization period would allow the City to collect lodging tax from the illegal STRs for a longer period. He suggested that the money from the lodging tax could be used to address the city's housing issues. He maintained that there was no incentive for the owners of STRs to rent out their property as long term rentals at affordable rates, so shortening the amortization period would not result in a greater availability of affordable housing. He also asserted that a longer amortization rate would protect the law from legal challenge. He also made the point that only STRs that were registered and operating when the law was enacted could continue, and therefore there would be no new STRs that did not meet the requirements of the law.

Tiffany Garriga (Second Ward) restated her position, taken at the Legal Committee meeting on August 26, that she would not support the law if the amortization period were more than a year. Rebecca Wolff (First Ward) said she had "still not been presented with a compelling reason for why five years is desirable" but indicated she would support two years or one year with the ability to appeal. Dominic Merante (Fifth Ward) predicted it would take one or two years to recover from the financial impact of COVID-19, and the City could recoup some lost revenue if the amortization period were five years. 

Council president Tom DePietro called for a motion. Rosenthal moved to set the amortization period at five years and use the money from the continuing lodging tax to fund housing initiatives. In making his motion, Rosenthal contended that by shortening the amortization period, "We will just be attracting people who can afford high rent. It will do nothing for people who need lower rent."

When the vote was called, Rosenthal, Merante, and Eileen Halloran (Fifth Ward) voted yes. Garriga, Shershah Mizan (Third Ward), Wolff, Calvin Lewis (Third Ward), Malachi Walker (Fourth Ward), and Dewan Sarowar (Second Ward) voted no. The motion was defeated. Walker betrayed he had missed the point that there would be no new STRs that did not meet the requirements after the law went into effect when he said, "Within five years, most of our people will be gone."

Sarowar introduced a motion to set the amortization period at one year; the motion was seconded by Garriga. Although there had been no discussion before the vote on the motion to make the amortization period five years, discussion was invited before the vote on the motion for one year. Several of the members of the public who commented seemed to have missed the same point Walker had. Elizabeth Dickey urged "doing this quickly" and spoke of people "who will continue to be displaced." Kaya Weidman declared, "The city is hemorrhaging children and families," and asserted that the law "is not a win unless [the amortization period] is one year." A commenter identified only as Wheeler said, "If it's five years, a lot of people will be long gone by then." Nick Zachos pointed out that people being evicted get ninety days, so an amortization period of less than a year would be fair. "Any longer," said Zachos, "would be hard for our community to hold on." Shanekia McIntosh said STRs were "pushing out the poorest people of Hudson" and went on to say, "The people who have built Hudson are being pushed out."

Steve Dunn warned that the City has serious fiscal issues and urged, "There is a revenue source that should be considered." Mary Ann Gazzola argued for a longer amortization period "just to take in some of the revenue."

The first to speak, Dylan Weidman had declared, "It's time for Hudson to stand up to predatory investors." During the discussion, two of those alleged "predatory investors" spoke. Chris Lewine, who denied being a "predatory investor," said he was "counting on the opportunity to run an Airbnb business" to support the needs of his family. In a letter to Tom DePietro, Lewine had said, "Since buying my building, I have removed unsafe asbestos, replaced a century-old heating system with modern HVAC, improved fire safety, updated plumbing and electrical and more, while offering store space to a small business of a full-time Hudson resident at below-market rent. The only way that I am able to do this is by recouping some of the costs through a STR. I'm not looking to get rich, I'm just looking to break even." Last night, Lewine told the Council, "If there is a short amortization, I will charge as much as possible to recoup my investment." Similarly, Julia Sauceda, who also denied being a "predatory investor," told the Council that she and her husband "took our savings and put it into a short term rental." "The house is our nest egg," she said. If the amortization period were one year, she asserted, "We would sell right away and try to recoup."

In addition to warning about the fiscal consequences to the City, Dunn warned about unintended consequences: "Owners will sell out, and some of those [buildings] will become single family homes." He went on to say, "If you get too draconian, it could backfire." Maya David asked, "What is the direct correlation between low income housing and STRs?" She predicted, "These properties will be sold for top dollar, so how is this helping?" Haylee Adkins made a similar prediction: "If we regulate STRs, these houses will go up for sale. It is a seller's market." John Kane urged the Council to "speak to real estate agents about who are buying houses now." He went on to say, "People who will buy the houses are not the people we want."

Nevertheless, when the vote has taken, the Council voted overwhelmingly to make the amortization period just one year. Those voting yes were Garriga, Mizan, Wolff, Lewis, Walker, Sarowar, and DePietro, who had not voted on the motion to make the amortization period five years. Voting against the one year period were Rosenthal, Merante, and Halloran.

After the vote had been taken, Wolff said that her passionate advocacy for the STR law had been "based on a sense of injustice." She described Hudson as "a small place that cannot survive the treatment of homes as businesses" and restated that point by saying, "The size of our city does not allow for homes as investments."

Jeff Baker, counsel to the Council, then asked if they wanted to include a "safety valve" in the law, which would allow owners of STRs to request a one year extension based on hardship. This was something he had suggested earlier on in the discussion. Garriga declared she was against any opportunity for an extension. Wolff, however, said she was in favor of "some kind of safety valve." When asked who would decide if an extension would be granted, Baker said the logical body would be the Zoning Board of Appeals. Wolff wanted the Common Council to be the deciding body. It was agreed that Baker would draft the language for such a safety valve to be written into the law in time for the Council's regular monthly meeting on Tuesday, September 15. 
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