Dutchess County Legislature Passes Tax Incentive to Address Housing Shortage by Increasing Accessory Dwelling Units

Local law would opt Dutchess County into a New York State tax exemption while ensuring public incentives are not used for short-term rentals

The Dutchess County Legislature announced legislation, sponsored by Legislator Trevor Redl (D-Town of Poughkeepsie), to encourage the construction of accessory dwelling units (ADUs), commonly known as backyard cottages, in-law apartments, and garage apartments; by adopting a New York State property tax exemption authorized under §421-p of the Real Property Tax Law.

The proposed local law would allow Dutchess County to opt into an existing State tax incentive designed to encourage homeowners to create additional housing on residential properties. To ensure the exemption serves its intended purpose, the legislation would limit eligibility to ADUs used for long-term residential housing and exclude units used as short-term rentals, such as Airbnb or VRBO.

Legislator Trevor Redl (D-Town of Poughkeepsie) said, “Accessory dwelling units are widely recognized as just one way to increase housing supply. ADUs provide flexible housing options for seniors wishing to age in place, young adults entering the housing market, caregivers, and working families, while allowing homeowners to make better use of existing residential properties.”

“To reduce the cost of housing, we need to use every tool in the toolkit, and create a wide variety of housing. ADUs provide gentle infill development, adding housing stock without creating sprawl and without straining services like water, sewer, and the electric grid. I’m proud to advance this common-sense solution,” said Legislator Lisa Kaul (D-Town of Poughkeepsie)

The resolution passed unanimously. The local law will take effect upon filing with the Secretary of State and will apply only to accessory dwelling unit projects with building permits issued on or after the effective date.