Plugging the hole on illegal hotels
In early October, there was a breakthrough in the battle by city officials and tenant advocates to stop landlords from turning their buildings into illegal hotels, with the citys first-ever injunction being slapped against one such owner. Yesterday, a State Supreme Court judge ruled, in a decision with citywide implications, that after Jan. 8, 2008, no units in this landlords three SROs can be rented to transients.
With Manhattans still-surging real estate market, the money to be made renting residential apartments to tourists instead of tenants is too enticing to pass up, luring not only individual landlords but major capital firms and corporations into the fray. With Manhattan apartment vacancy rates below 1 percent and an 85 percent occupancy rate for the citys 75,000 hotel rooms, nightly rentals even at so-called bargain rates of $100 to $150 can be far more profitable for owners than market-rate apartments, let alone rent-stabilized units.
Nearly 100 such buildings are on a list compiled by advocacy groups. Tenants in these buildings cite increased crime, cumbersome luggage and excessive noise in hallways; dilapidated building conditions not up to hotel code; and, worst of all, landlords harassing them to leave. While rent-stabilized buildings and single-room-occupancy, or SRO, hotels are most vulnerable, market-rate tenants are not immune: Tenants in a market-rate building in the Village at 1 Bank St. recently were told their leases wont be renewed because the owner will rent to tourists.
Building owners who flout the citys 46-year-old zoning laws while advertising openly on Web sites such as Travelocity and Expedia get away with such flagrant violations because of a muddied patchwork of weak laws that let owners off with minimal fines, which amount to a cost of doing business just a slap on the wrist.
Last year, a coalition of advocates and legislators created the Illegal Hotels Working Group to address this problem, bringing together the citys Department of Housing Preservation and Development, Department of Buildings and the Mayors Office of Special Enforcement to develop a strategy and bolster enforcement. In January, Councilmember Gale Brewer, State Senator Liz Krueger and Assemblymember Richard Gottfried promised new legislation with teeth that would substantially increase D.O.B. fines, tighten the legal definition of residential and empower the city to do its own enforcement. Brewer then introduced a bill in the City Council in March that got little support. Gottfried is circulating a draft of a similar bill in Albany. And the Working Group still awaits Mayor Bloomberg to take the lead in demanding bold new legislation that fixes ambiguities in the law that harm the citys residential housing stock, while developing new models for extended-stay housing.
While we applaud the mayors recent strengthening of the Office of Special Enforcement, the need for new legislation is abundantly clear. We urge the City Council and the mayor to act soon. As Manhattan Borough President Scott Stringer said earlier this month: We cant be slow to act in housing matters its too important.