Hudson Valley On a Mood Board: The Rise of Upstate Pieds-À-Terre

As I lean my head against the car window, I am presented with rolling rivers and valleys adorned by oak and maple forests. The air is free of city stench, and green is all there is to be seen for miles around.

For years, my family has embarked on road trips to upstate New York. Although we have dabbled in as many famously hard-to-pronounce towns as we can—Poughkeepsie, Saugerties, and Schenectady to highlight a few—and voyaged from Lake Ontario to the Finger Lakes, our preferred destination has always been the Hudson Valley.

Though geographically close to New York City, the Hudson Valley region separates itself through its lack of extensive public transportation, a more relaxed pace of life, historical towns, and an emphasis on agriculture. However, over time, the region has become less distinct in comparison to the city, with the emergence of luxury second homes and boutique businesses designed to cater to large influxes of city inhabitants. Combined with the absence of a specific state-wide pied-à-terre tax, this population shift is driving detrimental changes in culture, housing costs, and school enrollment.

In my time visiting the Hudson Valley, closer to the city where it is most convenient for urbanites to drive, it’s hard to miss the establishment of small towns with charming farmers’ markets and their plethora of tourists at small boutique stores with New York City chain locations. On the other hand, a few miles out, particularly to the north, far west, and east of the Hudson River, vast expanses of roads are lined with the occasional firewood store, farms, and smaller one-story houses. As my family has continued to visit the region, I have noticed increasing differences between towns and the region’s movement from a quiet forest and family-owned, brewery-dominated area to one covered by fancy villages and farmers’ markets designed for urbanites. 

Though the region has been prone to hidden celebrity homes and known as a weekend getaway since its establishment—with the Roosevelts, the Vanderbilts, and the Rockefellers being a few prominent weekend homeowners—its gentrification has been occurring at a faster rate. This change began as a result of the growing influx of people from the city and was particularly accelerated during the COVID-19 pandemic. During the first year of the pandemic, there was an increase of 124.4 percent in the number of NYC residents moving into the Hudson Valley and nearby Catskills region. Overall, it is estimated that 60,000 to 70,000 newcomers purchased homes in the area over the course of the pandemic, a figure far higher than in previous years.

While some have argued that this influx of people has created business growth and increased government funding, it’s also brought along several issues, one of the main ones being the resulting housing crisis for locals. When a large number of people move into the area, the local housing supply depletes. Additionally, with people from the city coming in, many of whom are able to pay far higher than the asking price on a house, demand increases and drives up costs. Studies even found that the median house prices between 2019 and 2025 in certain counties in the Hudson Valley increased by over 142 percent in Sullivan county.

Furthermore, as housing prices increase, the demand and cost of the rental market increases as well. While the federal benchmark says that families shouldn’t exceed spending over 30 percent of their income on housing, in 2024, in reference to Ulster county, former state Senator Jen Metzger reported, “42 percent of our residents spend more than half their income to keep a roof over their heads.” Because many rental housers do not have the income or stability to invest in buying a home, they are increasingly more vulnerable to housing instability as costs for rental housing increase and they become less likely to be able to continue affording a home. In the end, gentrification is directly harming these less stable populations of people, further driving out many community locals. One of the many reasons why families have stayed so local to the Hudson Valley is its cheap housing prices and accessibility to many cities. With this induced housing crisis, local residents and businesses that make up the character of the region are being forced out of the region.

From 2020 to 2021, the median household income of those leaving Columbia County was $68,812, while the median household income of those coming into the county was $166,107, demonstrating an astonishing wealth gap. This shift in wealth is due to the purchase of weekend homes by a new group of people, and as a result, the creation of a new set of wealthier consumers. This group provides a new, more profitable market for companies to cater to. 

Taking hold of this opportunity, boutiques, which stick out like a sore thumb compared to other stores, have appeared in several towns. This is especially prevalent in towns such as Rhinebeck which is now composed almost entirely of such boutiques and people indistinguishable from wealthy SoHo shoppers. As I have walked around the town’s main street, popping my head into stores, increasingly, clothing items are being sold at ridiculously high prices. These boutiques are also part of what is driving up the cost of commercial renting spaces, often outpricing local businesses. In the town of Beacon, there has been an unprecedented cost for commercial renting spaces of $15-$18 per square foot. While these figures are still significantly less than in New York City, they maintain a much higher rate than pre-pandemic levels.

Following the pandemic, many purchased properties became second homes, resulting in further harm to the population of full-time residents in these towns. Second home owners contribute less to the local community, particularly in industries like education. Because new homeowners don’t live upstate full time, there is a persistent decrease in school enrollment, resulting in significant educational budget cuts. This pattern has been occurring since even before the pandemic, though, with an overall decrease of 10 percent in public school enrollment since 2008. So while the main issue may have emerged before the pandemic, it has certainly been exacerbated by the pandemic, and the continuing addition of new second homeowners over generations threatens to continue this pattern for public schools upstate by decreasing the number of families living there full-time.

This issue of homeowners not contributing to the towns that they are situated in wouldn’t be so critical if it weren’t for the absence of a specific additional tax on second homes, which, as of right now, doesn’t exist. Without this, homes remain vacant for over half of the year, reducing supply, increasing surrounding housing costs, changing local character, and creating a new, wealthier consumer market. This is all done without providing the revenue that would be seen from a full-time resident that the region would have otherwise been able to reinvest. It’s as New York State Senator Pat Fahy states: “Expensive second homes are mostly unused, yet, when the owners are there, they are still using police, fire, water and infrastructure… they’re still using all the services that are barely compensated for because those places are left empty most of the time.” 

Recently, Mayor Mamdani and Governor Kathy Hochul announced the proposal for a new pied-à-terre tax in NYC that would prevent the effects of the absence of full-time residents on the local community. This would also be the first tax of this kind to exist in the state. The proposal would introduce a federal surcharge targeted at luxury second homes in New York City valued at over $5 million, and is estimated to generate at least $500 million a year in recurring revenue for the city. As the proposal is discussed among local leadership and waits for approval in the state legislature, it raises hopes among those in upstate New York.

The tax not only has the potential to add to the money available for crucial public services in the city, but also to different sectors throughout the whole state. Should this tax be advocated for addition to the state legislature for the entirety of New York State—not just NYC—it advances the arguments that politicians of the upstate community have been repeating for years about the influx of wealthy populations that don’t contribute to local communities. It is thus imperative that local politicians in the upstate area advocate for the tax to allow for the entrance of new wealthy consumers to actually have positive effects on the local community. Funding from such a tax on upstate second homes valued at over $2.5 million, accounting for lower costs of living in the Hudson Valley, would generate funds to be reinvested in areas such as struggling towns and for increased housing. While the Hudson Valley serves as a prominent example for how the purchase of second homes can have an effect on a local economy, it is only a local example of a greater issue throughout the state—other areas on the brink of experiencing the same issues include Syracuse and Rochester. Overall, the lack of regulations and taxes such as the pied-à-terre tax make the purchase of second homes highly detrimental to the character of distinct small towns and their local populations. With the addition of such regulations, however, these impacts can be mitigated. As Manhattan Borough President Brad Hoylman-Sigal said, highlighting the needs of both the city and the rest of the state: “If you can afford a $5 million second home, you should appropriately contribute to the… schools and public services that protect and sustain your investment.”