Hudson Valley Towns Have a New York City Problem
Upstate schools are closing and volunteer fire departments are struggling with recruitment. Some locals blame a surge of city residents who bought second homes during the pandemic.
The rolling hills of the lush Hudson Valley have everything a New York City resident might have craved during the pandemic. Buying a home less than two hours north of The Bronx meant access to relative calm, spacious backyards, niche stores offering artisanal products and nationally recognized culinary destinations.
And the early days of COVID created a favorable buyers’ market for borough-dwellers looking to escape city limits. But with home prices more than doubled since the pandemic began, upstate locals now say they can’t find affordable places to live, and the fabric of the community is being undermined by absentee landlords.
In January, Greg Beytis began looking for a new apartment in Ulster County after his girlfriend’s landlord raised the rent and abruptly informed him that he could no longer live in the apartment since he wasn’t on the lease.
“I can’t find anything, nothing. I have friends who had to leave the area — either going farther upstate or to Pennsylvania where things are cheaper,” said Beytis, 38. He was born and raised in Ulster County and works six days a week doing handyman and construction jobs in the area. “But I can’t leave because my kids are still in school here.”
Even renters like Beytis, who are not looking to buy a home, have been hit hard by the rapid increase in prices. Thirty percent of renters in Ulster County, where Beytis was born and raised, pay more than half of their income on housing, according to a county report.
Beytis has been paying $380 a week to live in a Kerhonkson hotel while he struggles to find a new apartment. Because they can no longer stay with him, Beytis is only able to see his two high school-aged kids once or twice every two weeks, compared to three or four times a week when he had stable housing.
“Before, you could start looking for an apartment and find one tomorrow. Now it’s like if someone posts an apartment on Craigslist or something, and if it’s not a scam, you have to call people and beg them,” said Ashley Goodman, 35, Beytis’ girlfriend. “You have to have cash ready to go and offer to sell them your firstborn child, if that’s even enough,” said Goodman, a state correctional officer who is looking with Beytis for an apartment where they can live together with his kids.
Adding Fuel to the Fire
These trends are also documented in neighboring Putnam, Dutchess, Orange counties. The number of New York City residents moving to the Hudson Valley and Catskills region increased by 124.4% in the first year of the pandemic, estimates CBRE Group, a real estate investment company. The exact impact of this pandemic surge is hard to calculate. But the rapid changes have reignited debate in town meetings and community forums about vacation rentals and second homes across the region, where municipalities are considering closing schools and volunteer fire departments as the number of full-time residents wane.
As part of a plan to stem home price increases, Ulster County in 2021 released a report that urged its municipalities to curb the proliferation of short-term rentals, which represent 12% of all rental housing in the area.
“It is increasingly important for municipalities to have local regulations in place to help them monitor short-term rentals and mitigate their negative consequences,” the document stated.
A year after the report was issued, ten of the 24 municipalities in the county implemented regulations.
But the measures have been polarizing. Some residents have celebrated the apparent reversal of recent trends, but others allege that the restrictions have failed to differentiate between longtime mom and pop landlords and large property investment companies.
Ulster County’s housing crisis is not entirely new. In the seven years before the pandemic, the average sale price of a single-family home in Ulster County increased by 17%, due in large part to low levels of new home construction and the beginning of the Airbnb boom.
But according to Adam Bosch, a former journalist who has tracked housing affordability extensively in the region through his Hudson Valley think tank Pattern for Progress, the pandemic made an already precarious situation much worse.
“Even before the pandemic we had significant price growth,” Bosch said, pointing to slow home construction that did not keep pace with demand. “But the pandemic gave an existing trend rocket fuel.”
Between 2020 and 2022, home sale prices in the county increased 56%.
“There is a statistically significant portion of the housing stock locked up in short-term rentals right now,” Bosch said. “Is that the housing stock that’s needed by the people who are struggling most to find housing right now? Probably not. But it’s part of the supply chain. If people who are in smaller houses could move up into those houses and free up a piece of that cheaper stock for others to get out of the rentals, it frees up the flow of people between different types of housing.”
Three years after the pandemic began, many companies that once had bustling metropolitan offices now stand empty many days of the week. Even now, after the city regained nearly all jobs lost during the pandemic, office occupancy is only at 45%, THE CITY reported earlier this month.
The turn to remote work has allowed many NYC-dwellers to continue to earn metropolitan incomes in cheaper and more scenic places, like the Hudson Valley, where that had previously been impossible.
“I think there was a kind of a shift in priorities during the pandemic,” said Christina Galbato, who purchased a second home in the town of Saugerties in July. Galbato had been renting an apartment in New York City for eight years before buying the house. “Having so much time to think about what you’re doing with your life and what’s important to you during COVID — I feel like probably a lot of people realized that like they were maybe just looking for a different type of lifestyle that maybe is a little bit slower and a little bit more peaceful.”
Galbato, who stays in her second home one or two nights a week, now charges $261 for her house per night on Airbnb when she isn’t around.
Across Ulster County, owners of vacation properties have fared very well during the pandemic, according to a report conducted by StayMarquis, a vacation rental company: the gross booking value for all short-term rentals in Ulster County reached $85 million in 2022, a 92% increase from 2019. Those renting on Airbnb saw revenues increase 133% in the first year of the pandemic alone, according to the Ulster County comptroller.
Public Services Impacted
Theoretically, an increase in demand for housing in the area should be good for school enrollment and other public services in Ulster County.
But it appears that the newcomers, many of whom are only in the area part time, are not participating in municipal life the same way as longtime permanent residents.
During the first year of the pandemic alone, the region had a net gain of over 30,000 people from New York City, according to Pattern for Progress.
But at the same time, the public school enrollment dropped countywide by 8%, state Department of Education data shows — continuing an ongoing trend. Conversely, private school enrollment increased for the first time in 15 years by 7% in 2021.
Before the end of the school year in June, parents and administrators will have to decide whether to shutter one of the last remaining public elementary schools in the Onteora Central School District, which encompasses the towns of Shandaken, Olive, Woodstock, West Hurley and parts of Marbletown and Lexington, due to plummeting student enrollment.
There is not yet conclusive data to suggest that the influx of New Yorkers during the pandemic created enrollment decline. In fact, the initial plan to reconfigure Onteora’s elementary schools was drafted in 2019 after decades of plodding student decreases.
But lifelong resident Emily Sherry, who runs a food pantry in Woodstock called The Table, feels that things have only gotten worse.
“I can’t tell you how many families come to the pantry and say, ‘Please help me find a place to live, I don’t want to take my kids out of school,’’ said Sherry, who is also the president of the Onteora School Board. “And there is nothing we can do for them.”
Sherry stressed that she wasn’t speaking on behalf of school district leadership, which officially sought to distance itself from the polarized debate over short-term rentals and urban out-of-towners. Ultimately, regardless of the impact of the pandemic, Sherry and Onteora District Superintendent Victoria McLaren agreed that the district should focus on allocating resources to best serve its dwindling student population.
“There is no data to indicate whether the pandemic had a direct impact on school enrollment,” McLaren said in a written statement.
Schools weren’t the only public services that have taken a hit.
Lieutenant Commissioner John Dunning of the Accord Volunteer Fire Department said that the changing demographics of the county have challenged his already limited resources.
“The Accord [fire] department has 88 square miles to cover, and the increase in population has really strained our capacity,” Dunning said.
The Hudson Valley has been a part-time destination for New York City residents for decades.
“I understand that it’s important to preserve the community we live in. We don’t want it to turn into all short-term rentals. And we definitely don’t want investors buying up all the homes and renting them basically like hotel rooms,” said Heather Cross, a travel agent who bought her second home when she was living in New York City in 2013. She now lives in New Jersey with her family, but spends many weekends in their second home. “But I think there has to be a lot of nuance. Honestly it’s a small town, Woodstock, there’s not that many people that actually live there.”
Cross is a member of the Short Term Rental Association of Woodstock, which has been petitioning the Town Board to relax the strict cap on permits that has prevented many part-time residents from earning rental revenue. Some residents who spoke to THE CITY have been renting out their homes for almost 20 years, and rely on the additional revenue to help with their mortgages.
She said her family will be able to keep paying their mortgage even though she wasn’t able to get a permit, and was forced to stop offering it as a vacation rental.
“And so, you know, the thing I’ve been saying to the people in the town when I’ve been talking to them is that we really need to use a scalpel and identify the problematic properties and deal with them,” said Cross.
Countywide, opponents of short-term rental regulations point to the economic development tourism has brought to the area, where 45% of jobs added in the last year were in the tourism and hospitality sectors, according to the county’s comptroller.
“We are all dependent on the year-round residents. They’re the contractors, they’re the electricians, they’re the plumbers,” said Laurie Ylvisaker, a real estate agent in the area. “But most of the newer businesses have been formed and are thriving by the hipsters or the new market. And that’s great.”
Deborah DeWan has lived in Woodstock for five decades, and now serves on the town’s Housing Committee, a volunteer board responsible for crafting housing policy. Like other longtime residents, said she wants to continue Woodstock’s longstanding tradition of welcoming newcomers. But she also laments the neighbors she has seen disappear in the past few years.
“Neighborhoods aren’t neighborhoods when it feels like 60% of the houses on my block are empty during the week,” DeWan said.
She is concerned that, without intervention, the housing crisis will make it impossible for enough people to stay to fulfill the basic needs of a community.
“Who is going to bring me soup if I get sick on a Tuesday?”