Greg Beytis has lived in the Hudson Valley for his whole life, so he remembers a time before the pandemic when finding an apartment only took a week, if that. But as of March, Beytis has spent four months looking for an apartment to rent where he can stay with his kids.
“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, who works six days a week doing handyman and construction jobs in the area. He is paying $380 a week to stay in a hotel. “But I can’t leave because my kids are still in school here.”
Between 2019 and 2022, the price of houses in the Hudson Valley rose by 56 percent, according to a report by the county’s comptroller, who cited a severe shortage of available homes. Those like Beytis, who aren’t looking to buy, weren’t spared either: 30 percent of renters spent more than half of their income a month on housing.
As municipalities scramble to find a solution for the ballooning housing crisis, residents, legislators, and local economists have blamed the 124.4% increase in New York City residents who moved just two hours north during the pandemic, seeking refuge from COVID-ravaged urban density.
This type of migration was well documented nationwide throughout the pandemic, when second home purchases increased nationwide by 88 percent, according to real estate research firm Redfin. Los Angelians rushed to small towns outside of Boise and Spokane. Wealthy business people were no longer tethered to financial capitals, and flocked to the scenic ski town of Aspen.
Three years later, many of those pandemic homebuyers have returned to the city, leaving their second homes vacant, or offering them for exorbitant nightly fees as vacation rentals. The small towns left behind are reeling from a simultaneous housing affordability crisis and sharp declines in the full-time population.
But the catalog of research that has attempted to evaluate the economic impact of the second home surge has been contradictory. Some have argued that an increase in the tax base and tourism revenue compensates for any negative effects on housing supply. Economists and local town boards alike have sparred about how to balance the economic growth that comes from an influx of residents and tourists with the dwindling resources for full-timers.
Murky Economic Impact
The 2010s marked the first boom for Airbnb. Everywhere from Lisbon and Barcelona, the United Kingdom and the United States, the economic impact of second homes and short term rentals have been linked to increases in home prices.
A study conducted by the University of California’s Marshall School of Business found that a 1 percent increase in Airbnb listings – used as a proxy for all short term rentals since it is the largest online platform – contributed to a 20 percent of the rent price increases across the corresponding zip codes, and nearly 15 percent of the home price increases.
The study also found that the impact of Airbnb prices was more pronounced in regions with higher levels of part-time residents who own second homes, since these properties are often used as short term rentals.
“The pandemic changed things a lot. The demand in rural areas increased overall, which by itself, could increase the prices regardless of AirBnb. But AirBnb made things worse,” said Davide Proserpio, one of the paper’s authors.
But Proserpio also pointed out that price increases brought on by second homes and short term rentals might be offset by increases in tourism revenue, increasing the tax base, and encouraging residential investment, which can reduce house prices in the long run.
Still, these same unresolved tensions have created severe rifts on a local municipal level, as communities that were once insular try to parse through the impacts of recent transformations.
Transforming Public Services
In the Hudson Valley, these cleavages are most clearly articulated in school board meetings, as parents and administrators debate over whether to shutter one of the last remaining public elementary schools in the Onteora School District due to plummeting student enrollment.
Theoretically, an increase in demand for housing in the area could be good for school enrollment and other public services in the area. An influx of wealthy residents could increase the school tax base and potentially increase the number of school-age kids.
But it appears that the newcomers are not participating in public services in the same way as longtime permanent residents – either because they are not there on weekdays, or because they rent their space to a rotating crop of tourists. In the meantime, families like Beytis’ struggle to keep their kids enrolled in the area.
During the first year of the pandemic alone, the Hudson Valley saw a net gain of over 30,000 people from New York City. At the same time, public school enrollment dropped region-wide by 8 percent. Conversely, in the 2020-2021 school year private school enrollment increased for the first time in 15 years by 7 percent.
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 is president of the Onteora School Board and runs a food pantry 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. “And there is nothing we can do for them.”
Polarizing Localities
These conversations have reverberated across local municipalities nationwide, where many local elected officials have vociferously decided that second homes and short term rentals are to blame.
Many have targeted AirBnbs and other short term vacation rentals as a way of protecting the dwindling permanent populations.
After a pandemic era surge in housing costs, incumbent Mayor Torre of Aspen, Colorado, made vacation rental restrictions a centerpiece of his successful bid for reelection against real estate agent Tracy Sutton.
Similarly, Coeur D’alene, Idaho, a vacation town of 55,904 people, experienced a 5 percent increase in population in the first year of the pandemic alone, and a whopping 45 percent increase in home prices.
“The question is – how many short-term rentals can you have in an area before it starts impeding on the neighborhood or before the neighbors starting realizing ‘hey I don’t live in a neighborhood, I live in a hotel’?” Council Member Daniel Gookin said in an interview with a local Fox News station.
These same sentiments were echoed thousands of miles away at last month’s Woodstock Town Board meeting, where community members discussed the recent restrictions on short term rental permits. The greatest opposition came from second home owners, who argued that the new permitting process would cut off essential revenue that supplements with mortgage payments.
“If we don’t get a permit, we’re going to have to make a choice of whether we are going to be able to move to Woodstock full-time in a couple of years, which has been our plan, or whether we’re going to have to sell,” said Michael Henry.
But other attendees had different priorities.
“I don’t want to see folks that are local, whether they’re here full-time or not, not be able to stay here,” said Reginald Earls, one of Woodstock’s elected Town Board members. “But I did grow up pretty poor. So there is a part of me that feels like, excuse me, some people can’t get one roof over their heads, many people have to think – can I afford to have enough money to have one house?”