Balancing the Short-Term Rentals Market in the Hudson Valley

Over the last few years, the Hudson Valley and Catskills have become increasingly popular short-term rental (STR) markets, and part of the national debate about their merits and shortcomings.

While many residents that operate STRs experience financial success and help bring visitors to their area, many others think that STR sites like Airbnb and VRBO are transforming the community for the worse. However, the real impact STRs are having on our region is much less black-and-white, says John C. Cappello, Esq., a partner at the Walden-based law firm Jacobowitz & Gubits who specializes in land use and municipal law. “We’ve worked on both sides of the issue, representing municipalities trying to create legislation and homeowners who are attempting to use their property as an STR,” he says. “As with most land use issues it’s all about finding balance.”

As the region’s most popular tourist communities like Woodstock and Hudson begin to implement legislation limiting STRs, Cappello stresses the importance of finding a path forward that best meets the needs of the community. “When done right and regulated correctly and fairly, short-term rentals can have a benefit to the community,” he says. “But there can be abuses, especially when there are too many short-term rental units, particularly in more rural areas.” 

For communities without much existing hotel infrastructure, but plenty of recreational opportunities (such as rural towns in the Catskills) STRs provide an accessible way for visitors to vacation there. And when they visit, they provide an economic boost to local restaurants, shops, and residents operating STRs alike. 

“Given the housing costs in the region, any relief you can provide a homeowner can generally be perceived as a good thing,” Cappello says. “If they can rent out their house for a few weeks a year they can generate a little extra income to help them pay their mortgage or make repairs to their home they otherwise wouldn’t be able to afford.” 

On the other hand, he says, “there is concern in some communities that people are buying homes solely for the use as full-time STRs in effect creating unsupervised mini hotels in residential neighborhoods. Also, some residents have raised concern that if unregulated, STRs will result in excessive noise, traffic, sewer, and other nuisance issues.” Cappello says.

As for the solution? It’s time for municipalities to realize that STRs are here to stay, and that the best path forward lies in the creation of thoughtful and fair legislation that will benefit the community as a whole.

“Zoning regulations and/or licensing requirements that require an STR owner to limit the number of people per bedroom, demonstrate that any septic system is in working order, identify off-street parking and provide a local contact available to address any issues that may arise is the low hanging fruit. Other measures to consider could be limiting the number of days a homeowner or lessee could rent the home, limit the total number in any particular area based upon fair and objective criteria, and requiring a certain percentage of STRs be owner occupied," Cappello says. “The landscape is still evolving and there’s not a lot of case law yet, so long as a municipality is creating legislation that is reasonable and based upon objective and supportable criteria, there’s a fairly wide ability to set limits that work for all sides.”