Middletown's Town Council made significant strides in addressing local housing and taxation issues during their regular meeting on September 15, 2025. A key decision emerged regarding the two-tier tax ordinance that distinguishes between resident and nonresident property owners, particularly in relation to short-term rentals (STRs).

Councilman Dennis raised concerns about a provision in the ordinance that classified residents as nonresidents if they rented out more than two rooms in their primary residence. This classification could lead to higher tax rates for those who are full-time residents but engage in short-term rentals. After discussions, Dennis proposed withdrawing this specific restriction, advocating that full-time residents should not face limitations on the number of rooms they can rent in their homes.

The council deliberated on the implications of this change, emphasizing the importance of incentivizing long-term rentals while allowing residents the flexibility to rent out their homes without incurring additional tax burdens. The discussion highlighted the need for clarity in the ordinance to prevent unintended consequences for homeowners who wish to participate in the STR market.

In addition to the tax ordinance, the council reaffirmed its commitment to maintaining housing availability in the community. The original intent behind the two-tier tax system was to encourage landlords to offer long-term rentals, ensuring that housing remains accessible for residents.

The meeting underscored the council's ongoing efforts to balance the interests of homeowners, renters, and the broader community. As the council moves forward, the proposed changes to the tax ordinance will be closely monitored to assess their impact on local housing dynamics and tax equity.