State Outlaws Renting Apartments as Hotels

In July, housing activists battling illegal hotels scored a rare victory in the struggle to preserve affordable housing. The state Legislature passed a bill banning owners from renting apartments for less than 30 days, and after some dithering and debate, Gov. David Paterson signed it on July 23.

The law, which will go into effect on May 1 next year, specifies that “Class A multiple dwelling” units can only be used for permanent residences—people occupying the apartment for at least 30 consecutive days. This will make it easier for city agencies to prevent them from being used illegally as Class B (commercial) hotels. For many years, residential buildings in New York City have been used increasingly for commercial and transient rentals instead of long-term housing for New Yorkers.

“The profits from daily and weekly rentals are huge incentives to push out long-term tenants,” says Jackie Del Valle, head of organizing at Housing Conservation Coordinators, a community-rights group in Hell’s Kitchen. “Every year we lose over 10,000 apartments from rent stabilization. The growth of the illegal hotel industry is a serious contributor to this.”

The practice began in single-room occupancy residential hotels in Manhattan, especially the Upper West Side, where transients were much more profitable than long-term tenants, and week-to-week leases were an invitation for abuse by landlords. Since then, illegal hotel operations have spread into rent-regulated and even market-rate or privately owned apartments throughout the city. Some owners bought condo units and rented them to transients by the night.

“For years, my office has received countless complaints from tenants living in residential buildings that are used as hotels,” Assemblymember Richard Gottfried (D-Manhattan), one of the bill’s sponsors, said in a statement after Paterson signed it.

With the constant flow of strangers in and out of their buildings, many residents feel their security is at risk because they never know who is staying next door. When the guests are noisy or engaged in criminal activities, the disruptions become a form of harassment. Since these “hotels” provide few or no on-site services to their guests, tenants sometimes even found themselves pressed into helping “hotel” clients dissatisfied with their accommodations.

Safety for travelers also became a factor, as most illegal hotels don’t meet the basic standards of legal commercial hotels. Tourists unknowingly stay in buildings without a secondary emergency exit and, in some cases, with capped sprinkler systems. Youth hostels, where backpackers slept on bunk beds—sometimes with 10 to 20 people in a small room intended for one or two—presented dangerously overcrowded conditions.

Attempts by City Council members, such as Gale Brewer and Dan Garodnick, to address the problem were stymied by various issues, including zoning-law language. In January 2009, in a case involving three Upper West Side SROs, the state Appellate Division ruled that units in residential buildings could be rented to transients as long as permanent tenants occupied more than half the total units. It took action by state legislators, led by state Senators Liz Krueger and Tom Duane and Assemblymembers Linda Rosenthal and Dick Gottfried (all Manhattan Democrats), to change the law.

In a last-minute blitz aimed at persuading Gov. Paterson to veto the bill, opponents argued that it would make it illegal for tenants to sublease their apartments. Proponents pointed out that the bill only strengthens the wording of state multiple-dwelling laws on the books since 1929, and that its intent is to address large-scale abuse and not to single out individual tenants.

The bill does not affect tenants who sublease their apartments, rent out rooms or share their apartments, or have people house-sit while they’re away. It will however, prohibit tenants from charging money for someone to stay in their apartment for less than a month.