In New York's Hudson Valley, Rent-Regulated Multifamily Buildings Are the Opportunity Most Investors Are Ignoring

Written by:

Alejandra Rodriguez

Date:

14 Aug 2026

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The short-term rental boom that swept through New York’s Hudson Valley during the pandemic years has given way to a less forgiving environment. Regulations are tightening across municipalities, operational costs have risen, and supply has flooded the market as second-home owners listed their properties on rental platforms simultaneously. STR investors are pulling back, and a different class of asset is becoming available at prices that reflect that retreat.

According to Sheneur Menaker, Co-Founder & Agent at Hudson Modern, a brokerage based in the Kingston-Rhinebeck corridor, the shift has played out over the past several years. His firm works a 25-mile radius around Kingston, handling both residential sales and commercial multifamily transactions, and draws a significant share of its buyer pool from New York City through a sister brokerage there.

The STR Squeeze

From 2020 through 2023, the Hudson Valley’s short-term rental market boomed. Investors bought second homes, listed them on rental platforms, and filled them easily. But the dynamics have reversed. Regulations have grown stricter year over year with no sign of slowing, demand has softened, and inventory has expanded as more owners entered the market. Operational expenses – electricity, day-to-day costs – have also climbed, compressing what were already thin margins.

The squeeze comes from both directions. Towns that regulate are making profitability difficult, and towns that don’t yet regulate carry the risk of future restrictions. “Investors are not going to put their money into a town that doesn’t have regulations because of the risk of them changing the rules in the future,” Menaker says. “So it’s a bit of an unknown right now.”

Menaker says he has sold several STR properties over the past couple of years and has seen investors redirect their capital elsewhere.

Where Multifamily Capital Is Landing

As STR investors exit, a different flow of capital is entering the region. Menaker describes multifamily investors relocating funds from New York City, where rent regulations and tenant-forward policies have made ownership less attractive. In the Hudson Valley, rent demand is high, and housing inventory is low, conditions that support stable occupancy.

Kingston specifically has drawn attention. It was the first municipality outside New York City to pass rent regulation laws under the Emergency Tenant Protection Act, or ETPA. Menaker sees an overlooked opportunity in these regulated buildings precisely because most investors avoid them.

“Investors are not really paying attention to that,” he says. “They’re way more focused on how much I can raise rent in the next five years. But when you are dealing with raising rents, you’re also dealing with more risk of vacancy.”

His argument is straightforward: rent-regulated tenants historically have the lowest turnover rates. That means lower vacancy risk, more predictable income, and the ability to underwrite a building with greater confidence. The trade-off is limited rent growth, but sellers of ETPA buildings are pricing accordingly, creating entry points that reflect the regulatory constraints. For investors who are long-term oriented and risk-averse, Menaker says, the current pricing represents a window to acquire stabilized assets at a discount.

Condition Is Driving Residential Sales

On the residential side, the pattern is equally clear. Homes in good condition are moving; homes that need work are sitting longer. Renovation costs – materials, lumber, labor – remain elevated, and buyers are choosing to pay a premium for move-in-ready properties rather than take on uncertain rehab budgets.

For properties that do need work, the power dynamic has shifted toward buyers. Sellers with an offer on the table are now willing to negotiate repairs, agree to concessions, and accept price reductions, behavior that was rare during the seller’s market of recent years. “A couple of years ago, if a buyer asked for a repair, the seller would just say no and move on to the next offer,” Menaker says. “Nowadays sellers are willing to be more amenable.”

For buyers considering fixer-uppers, this means stronger negotiating leverage on price and post-inspection repairs. For sellers of homes that need work, realistic pricing and willingness to address condition issues upfront will determine whether a listing attracts offers or lingers.

Overlooked Pockets in the Southern Catskills

Beyond Kingston and Hudson, Menaker points to southern Greene County as a market with underappreciated inventory. The area’s stock includes converted motels, lodges, and inns, remnants of the mid-century Catskill tourism era that were abandoned or repurposed into multifamily housing in the 1980s and 90s.

“There are actually a lot of people who are looking to rent in a more rural environment,” he says. “They want the peace and quiet. They actually don’t want to be in Kingston or in the cities.” The area sits roughly 40 to 45 minutes from Albany and remains close to the region’s larger towns, offering tenants proximity without density. For investors, this stock represents available multifamily inventory in an area where demand exists, but competition from other buyers remains limited.

Looking Ahead

Menaker describes the Hudson Valley as a market shaped by housing affordability and regulatory balance in ongoing local conversations. His view on the policy environment is that incentivizing property owners to invest in improvements – rather than constraining what they can earn – ultimately produces better housing outcomes.

“If you limit what their profit is, then you also are limiting how they provide a service,” he says. Menaker frames housing as both a right and a service, arguing that owners and investors need sufficient margin to maintain and improve properties for tenants.

About the Expert: Sheneur Menaker is Co-Founder and Agent at Hudson Modern, a brokerage serving the Kingston-Rhinebeck corridor in New York’s Hudson Valley, handling both residential sales and commercial multifamily transactions.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.