Exhibit 10.42


                             CONSULTING AGREEMENT


     CONSULTING AGREEMENT, dated as of December 26, 1996, between WELLSFORD
RESIDENTIAL PROPERTY TRUST, a Maryland real estate investment trust with
offices at 610 Fifth Avenue, New York, New York 10020 (the "Company") and
Gareth Y. Hudson, residing at 4595 Drake Road, Cincinnati, Ohio 45243
("Consultant").

                                       
                             W I T N E S S E T H:


     WHEREAS, Consultant resigned as Vice President - Director of Property
Operations of the Company, effective as of September 30, 1996; and

     WHEREAS, the Company desires to retain Consultant as a consultant to the
Company, and Consultant desires to be retained in such capacity by the Company,
upon the terms set forth in this Agreement.

     IT IS AGREED:

     1.   Duties.  Consultant agrees that from time to time during the term
hereof, he will consult with and advise the Company and its affiliates and
subsidiaries, with respect to matters relating to the business of the Company
and its subsidiaries and affiliates.

     2.   Term.  This Agreement shall commence as of the date hereof and shall
continue in effect through March 31, 1996.

     3.   Compensation.  (a)  In consideration for the services rendered by
Consultant pursuant to this Agreement, in the event an agreement relating to a
change in control of the Company is executed on or prior to March 31, 1996 and
such change in control of the Company occurs within six (6) months thereafter,
the Company shall pay Consultant a fee of $45,000.  Such fee shall be paid not
more than 10 days following the change in control of the Company.  For purposes
of this Agreement, a "change in control of the Company" shall be deemed to
occur if:      
               (i)  there shall have occurred a change in control of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or not
the Company is then subject to such reporting requirement, provided, however,
that there shall not be deemed to be a "change in control of the Company" if
immediately prior to the occurrence of what would otherwise be a "change in
control of the Company" (x) the Consultant is the other party to the
transaction (a "Control Event") that would otherwise result in a "change in
control of the Company" or (y) the Consultant is an executive officer, trustee,
director or more than 5% equity holder of the other party to the Control Event
or of any entity, directly or indirectly, controlling such other party, 

               (ii) the Company merges or consolidates with, or sells all or
substantially all of its assets to, another company (each, a "Transaction"),
provided, however, that a Transaction shall not be deemed to result in a
"change in control of the Company" if (x) immediately prior thereto the
circumstances in (i)(x) or (i)(y) above exist, or (y) (1) the shareholders of
the Company, immediately before such Transaction own, directly or indirectly,
immediately following such Transaction in excess of fifty percent (50%) of the
combined voting power of the outstanding voting securities of the corporation
or other entity resulting from such Transaction (the "Surviving Corporation")
in substantially the same proportion as their ownership of the voting
securities of the Company immediately before such Transaction and (2) the
individuals who were members of the Company's Board of Trustees immediately
prior to the execution of the agreement providing for such Transaction
constitute at least a majority of the members of the board of directors or the
board of trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation, or 

               (iii) the Company acquires assets of another company or a
subsidiary of the Company merges or consolidates with another company (each, an
"Other Transaction") and (x) the shareholders of the Company, immediately
before such Other Transaction own, directly or indirectly, immediately
following such Other Transaction 50% or less of the combined voting power of
the outstanding voting securities of the corporation or other entity resulting
from such Other Transaction (the "Other Surviving Corporation") in
substantially the same proportion as their ownership of the voting securities
of the Company immediately before such Other Transaction or (y) the individuals
who were members of the Company's Board of Trustees immediately prior to the
execution of the agreement providing for such Other Transaction constitute less
than a majority of the members of the board of directors or the board of
trustees, as the case may be, of the Other Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Other Surviving
Corporation, provided, however, that an Other Transaction shall not be deemed
to result in a "change in control of the Company" if immediately prior thereto
the circumstances in (i)(x) or (i)(y) above exist.

          (b)  In consideration for the release described in Section 4 hereof,
the Company shall pay Consultant $5,000 on or before January 15, 1997.

     4.   Release.  (a)  The Consultant, on his behalf and on behalf of his
heirs, executors, administrators, receivers, successors and assigns
(collectively, "Releasor") hereby irrevocably, unconditionally and generally
releases the Company, its affiliates, subsidiaries and divisions, and their
respective partners, officers, trustees, directors, shareholders, agents,
attorneys and employees, and their respective heirs, executors, administrators,
receivers, successors and assigns (collectively, "Releasee"), from or in
connection with, and hereby waives and/or settles, any and all actions, causes
of action, suits, debts, dues, sums of money, accounts, controversies,
agreements, promises, damages, judgments, executions, or any liability, claims
or demands, known or unknown and of any nature whatsoever and which Releasor
ever had, now has, or hereafter can, shall or may have for, upon, or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the
date of this Agreement, including, without limitation, arising directly or
indirectly pursuant to or out of the Consultant's employment with the Company
or any Releasee, the performance of services for the Company or any Releasee or
the termination of such employment or services and, specifically, without
limitation, any rights and/or claims (i) arising under any contract, express or
implied, written or oral; (ii) for wrongful dismissal or termination of
employment; (iii) arising under any federal, state, local or other statutes,
orders, laws, ordinances, regulations or the like that relate to the employment
relationship and/or, specifically, that prohibit discrimination based upon age,
race, religion, sex, national origin, disability, sexual orientation or any
other unlawful bases, including without limitation, the Civil Rights Act of
1964, as amended, the Civil Rights Act of 1991, as amended, the Civil Rights
Act of 1966, as amended, the Age Discrimination in Employment Act of 1967, as
amended, the Americans with Disabilities Act of 1990, as amended, the Employee
Retirement Income Security Act of 1974, as amended, and any applicable
statutes, orders, laws, ordinances, regulations or the like of the States of
Washington, Colorado or New York or any political subdivision thereof, and any
applicable rules and regulations promulgated pursuant to or concerning any of
the foregoing statutes; (iv) based upon any other federal, state or local stat-
utes, orders, laws, ordinances, regulations or the like; (v) for tort, tortious
or harassing conduct, infliction of mental distress, interference with
contract, fraud, libel or slander; and (vi) for damages, including without
limitation, punitive or compensatory damages, or for attorneys' fees, expenses,
costs, wages, injunctive or equitable relief.
          (b)  Consultant represents and warrants that he has not filed,
commenced or participated in any way in any complaints, claims, actions or
proceedings of any kind against any Releasee with any federal, state or local
court, or any administrative, regulatory or arbitration agency or body, and he
agrees not to file, commence, or participate in any way in any complaint,
claim, action or proceeding of any kind against any Releasee with any federal,
state or local court or any administrative, regulatory or arbitration agency or
body, based upon events occurring on or prior to the date of this Agreement on
any basis, including without limitation, with respect to his employment with
the Company or any Releasee or the termination of such employment.

     5.   Confidential Information and Company Property - Past Employment.  (a) 
Consultant hereby acknowledges that during his employment with the Company he
acquired proprietary, private and/or otherwise confidential information of or
concerning (i) Releasee; (ii) customers of Releasee; and/or (iii) persons or
entities with which Releasee did business, including without limitation,
information relating to or concerning the business and/or finances of Releasee
and customers of Releasee ("Confidential Information").  Consultant hereby
represents and agrees that (i) he has returned to the Company, and has not
retained any copies of, all documents, records or materials of any kind,
whether written or electronically created or stored, which contain, relate to,
or refer to any Confidential Information ("Confidential Materials"); (ii) he
has not disclosed any Confidential Information or Confidential Materials to any
person or entity without the express authorization of the President of the
Company; and (iii) he shall not disclose any Confidential Information or
Confidential Materials, in any manner directly or indirectly, except as shall
be required by law.  

          (b)  Consultant also represents and agrees that upon the execution of
this Agreement he has returned to the Company all other property of the
Company, including without limitation, any keys to the offices of the Company
and any Company identification cards.

     6.   Relationship.   It is recognized and agreed that this Agreement does
not create the relationship of employer and employee between the Company and
the Consultant, but, rather, that the services to be performed hereunder shall
be performed by Consultant as an independent contractor. Accordingly, each of
the parties hereto agrees not to hold themselves out in any manner contrary to
the terms of this Agreement and neither of the parties hereto shall be or
become liable or bound by any representation, act, omission or agreement
whatsoever of the other party.  Consultant shall not have the right to make any
contract or commitment on behalf of the Company or any affiliate or subsidiary
thereof or to bind the Company or any affiliate or subsidiary thereof.

     7.   Governing Law.  This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York, without regard to
the State of New York's conflicts of law principles.  Both the Company and the
Consultant hereby irrevocably and unconditionally consent to submit to the
jurisdiction of any federal, state or county court sitting in the State of New
York (the "New York Courts") for any litigation arising out of or relating to
this Agreement (and agrees not to commence any litigation relating thereto
except in such courts), waives any objection to the laying of venue of any such
litigation in the New York Courts and agrees not to plead or claim that such
litigation brought in any New York Courts has been brought in an inconvenient
forum.  Both the Company and the Consultant agree that service of process or
notice in any action, suit or proceeding shall be effective if in writing and
sent by certified or registered mail, return receipt requested, prepared to the
address above set forth.

     8.   Waiver.  No provision of this Agreement may be waived or changed,
except by a writing signed by the party to be charged with such waiver or
change.

     9.   Successors; Binding Agreement.  This Agreement shall inure to the
benefit of, be enforceable by, and be binding upon, Consultant's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees, and the Company's successors and assigns.
  
     10.  Notices.  All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when given by telex, telegram or mailgram, or
when mailed first class postage prepaid, by registered or certified mail,
return receipt requested, addressed to the party to receive the same at his or
its address above set forth, or such other address as the party to receive the
same shall have specified by written notice given in the manner provided for in
this Section 12.  All notices shall be deemed to have been given as of the date
of personal delivery, transmittal or mailing thereof.

     11.  Severability.  If any provision in this Agreement is determined to be
invalid, it shall not affect the validity or enforceability of any of the other
remaining provisions hereof.

     12.  Exculpation.  This Agreement and all documents, agreements,
understandings and arrangements relating to this Agreement have been executed
by the undersigned in his/her capacity as an officer or trustee of the Company
which has been formed as a Maryland real estate investment trust pursuant to an
Amended and Restated Declaration of Trust of the Company dated as of November
2, 1992, as amended, and not individually, and neither the trustees, officers
or shareholders of the Company shall be bound or have any personal liability
hereunder or thereunder.  Consultant shall look solely to the assets of the
Company for satisfaction of any liability of the Company in respect of this
Agreement and all documents, agreements, understandings and arrangements
relating to this Agreement and will not seek recourse or commence any action
against any of the trustees, officers or shareholders of the Company or any of
their personal assets for the performance or payment of any obligation
hereunder or thereunder.  The foregoing shall also apply to any future
documents, agreements, understandings, arrangements and transactions between
the parties hereto.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.


                    WELLSFORD RESIDENTIAL PROPERTY TRUST


                    By:/s/ Edward Lowenthal      
                       ---------------------
                       Name:  Edward Lowenthal
                       Title: President

CONSULTANT:                        


Name:/s/ Gareth Y. Hudson   
     ----------------------
        Gareth Y. Hudson