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The Airbnb Invasion

We made the 2019 "trending destinations" list. What does it mean for the Catskills and Hudson Valley?

The Shipping Container House
Photo from The Shipping Container House in Tivoli, an Airbnb listing in the Hudson Valley.

It’s a good time to be an Airbnb host in the Hudson Valley. Earlier this month, the vacation rental site listed the Catskills and Hudson Valley region as one of its top 19 “trending destinations” for the upcoming year:

2019 marks the quintessential time to visit this region with the 50th anniversary of Woodstock coming up and many famous musicians and groups rumored to be performing. But don’t just come for the show: with its rich wildlife and hiking trails…and ski resorts to book and mountains to snowboard, the Catskills provide the perfect backdrop for a laid-back, season-agnostic retreat. And along the Hudson River, aspiring second-career farmers and growers can find inspiration by visiting the area’s many vineyards, orchards and farms. 

The company shared some data to go with its tantalizing descriptions of our local attractions: Bookings in the region are up 100 percent year-over-year, and searches are up 130 percent.

Growing interest in the region as a destination bodes well for the increasingly tourism-driven Hudson Valley economy. But is Airbnb a good thing for us? With short-term rentals increasingly under fire around the globe for displacing local residents, and a worrying shortage of long-term rental options in our own region, it seems clear that the popular platform is a double-edged sword.

An Airbnb cottage in Woodstock, where the popularity of short-term rentals is straining the long-term rental market. According to a 2016 report by Ulster County Community Action, rent in Woodstock consumed an average of 46 percent of household income, far above both the 30 percent affordability threshold used by housing advocates and the state average. 

Urban Problems in Rural Places

While Airbnb backlash in urban centers has gotten a lot of media attention, the platform is also making an impact in more rural places. In recent years, local realtors even in small rural towns have seen an increase in homebuyers looking for Airbnb-able properties—and factoring a little extra Airbnb income into the projected cost of their mortgage. Hard numbers on how Airbnb is affecting local real estate costs are tough to come by, but with the popularity of the site with both tourists and local property owners surging, it seems likely that it’s making an impact.

Ulster County has been grappling with a severe shortage of affordable rental housing for years. In a recent report by the Woodstock Times, housing advocates at the local nonprofit RUPCO draw a direct line between the rise of Airbnb and an increase in homelessness in the heavily rural county:

[Kathy] Germain, who has been dealing with Ulster County’s growing affordable housing crisis for more than ten years, said the rise in local homeless numbers was a direct result of “bottlenecking” due to the growing scarcity of available housing. RUPCO has closed its long waiting lists for Section 8 HUD housing, and local motels have filled up with people in need of housing.

Housing demand is outstripping housing supply. Rental markets in various parts of the county have been taken over by the Airbnb phenomenon, exacerbating the housing crisis for lower-income populations. And according to the New York State Association of Realtors, there were only 1018 Ulster County homes available for sale this February, the lowest inventory in many years.

Nowhere is the crisis more acute than in Woodstock, Upstate House reports:

The shared economy has gotten unwieldy in Woodstock, which has the most Airbnb accounts in Ulster County, says Kirk Ritchey, the chair of the town’s short-term rental task force. Woodstock’s glut of short-term rentals has “drastically altered the inventory of available housing for long-term rentals and worker housing,” he says, creating problems: “party houses,” litter, and badly stored trash attracting bears. 

More worryingly still, a recent report from the Marist Bureau of Economic Research shows that the Hudson Valley is losing population. Between 2011 and 2016, the report’s authors concluded, the region lost more than 28,000 households, and roughly $1.3 billion in adjusted gross income for the region along with them. The report does not address the cause of migration out of the region in depth, or draw a connection to housing problems, but it’s a disturbing trend in an area that is becoming increasingly difficult for renters to live in.

Airbnb is technically illegal in Beacon, since local zoning doesn’t allow for short-term rentals and a proposed piece of legislation to regulate them failed to pass earlier this year, but that’s not stopping hosts. Pictured: the Beacon Mountain Cocoon, a 1966 camper located a few minutes’ walk from Main Street.

The Rise of Regulation

Counties and municipal governments in the region, and around the state, have responded to Airbnb’s incursions by taxing and regulating short-term rentals. Currently, the site collects local taxes in more than two dozen upstate New York counties, including several in the Hudson Valley region.

Town governments are often flummoxed about how best to respond to the Airbnb phenomenon. In Beacon, a measure intended to regulate the practice failed narrowly in May—essentially rendering the practice illegal, a result that has caused intense confusion among local Airbnb hosts. Woodstock is currently contemplating similar legislation, which would require hosts to register with the town and get a permit.

Regulations aimed at making sure Airbnb hosts play by the rules and act like good neighbors are probably a good thing. For their part, the company has been happy to cooperate by collecting taxes on behalf of local governments. But even with more oversight, the central problem of Airbnb is likely to resist solutions: Allowing short-term rentals puts intense pressure on the price and availability of long-term rentals, and in doing so, changes the face of the community.

The housing problems faced by Hudson Valley towns on a small scale are playing out in more dramatic fashion in urban centers around the world. Guardian columnist Gaby Hinsliff writes:

Cities all over the globe seem to be eating themselves, squeezing out the young and the skint and the creative, who are all too often the people who made them achingly hip in the first place. It manifests itself differently in different places, of course: London had a housing affordability crisis before Airbnb was even invented. Soaring prices from Berlin to Vancouver to Sydney have been blamed on everything from cheap borrowing and foreign speculation to changing demographics and government failure to build enough social housing, none of which are remotely the fault of second-home owners turning a quick profit.

But the common thread is a sense that, for whatever reason, markets are not delivering for the young in a post-crash world; that digital disruption only makes things more unpredictable; and that years of politicians earnestly promising to do something about it have come to pitifully little.

If there’s a silver lining to our predicament, it’s that we’re not alone: Towns and cities in all of the world’s most beautiful destinations are wrestling with how best to embrace the positive aspects of Airbnb, while preserving the character and affordability of our communities for full-time residents. If one place figures out how to do this balancing act well, the rest might follow.