Gotham Gazette

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lawmakers seek to crack down on illegal hotels

A room in the so-called Candy Hostel, one of three apartment buildings now used a budget hotels.

The "Candy Hostel" on Manhattan's Upper West boasts of being New York City's "newest, sexiest, hippest and hottest boutique hostel." It offers amazingly cheap rates -- as low as $17 a night in a city where the average hotel charges $312 -- and only accepts payment in cash.

As alluring as that may be to tourists on a budget, the building, formally known as the Mount Royal, along with the nearby The Continental and Pennington are not as hospitable for long-time residents who call the single room occupancy buildings home.

"The city doesn�t protect us. What�s happening here is illegal," one man said. When asked to elaborate, he took a puff of his cigarette, then shook his head, and said that he could not comment any further because he was afraid of retaliation from his landlord.

For years, the owners of the three buildings -- ownership information remains murky as to who exactly they are -- have been renting out apartments to tourists, to make a greater profit than they can from the low-income tenants. The three, on 94th and 95th Streets, contain rent-stabilized apartments and are Single Room Occupancy buildings, or SROs where tenants typically share bathrooms and kitchens. The certificates of occupation for each building says that they are all Class A multiple dwellings, which means that they are classified as buildings for permanent residents.

Critics say that renting rooms out to tourists siphons away affordable housing for low-income New Yorkers. and the city regards such rentals as illegal. A recent statement by Mayor Michael Bloomberg said that such hotels "all too often create fire safety and security hazards and create quality of life concerns in residential neighborhood." This is because these residential buildings do not necessarily follow fire safety regulations that a legitimate hotel would have to follow.

The press release hailed bills in the state legislature that would help sharpen the definitions of transient and permanent occupancies, ambiguities that the building owners have taken advantage of to skirt the law. A bill also has been introduced in City Council.

Legal Standing

As of 2009, the number of such hotels in the city has 280 buildings, according to a report by the Illegal Hotels Working Group.

The law is sketchy regarding the definitions of transient and permanent occupancies. In 2007, the city obtained a preliminary injunction prohibiting the use of these three buildings as hotels. The city contended that short-term stays were illegal for buildings with Class A status and that stays of less than 30 days violated a zoning resolution that forbid "transient hotels" that were used "primarily for transient occupancy" from being located in a residential district.

But in 2009, a state appeals court decided that the building owners could continue renting units for short stays. Justice David Friedman ruled, "While the city's evidence demonstrates -- indeed defendants readily admit -- that a significant number of units in each building are (and have been for many decades) rented to tourists for periods of less than 30 days, the city made no showing that most of the units in any of the buildings are rented for such short-term occupancy."

An Economic Engine?

David Satnick of Loeb and Loeb LLP, who represented the Continental and the Pennington in the case said at the time that in light of the "current economic turmoil," owners of SRO hotels should be permitted to rent units to tourists because it , "generates tremendous income for the city by way of taxes." Scott E. Mullen, an attorney who represented The Mount Royal said the ruling was extremely important for the city's tourist industry.

Assemblymember Micah Kellner, who has supported legislation against such hotels does not agree. He has said, "Illegal hotels are terrible for New York City's reputation as a quality tourist destination."

Certainly, though, the hotels attract visitors. On a recent day a young Asian couple walked through the doorway of the Continental building toting a large purple suitcase. Brochures about visiting New York City tourist sites such as the Empire State Building, the Statue of Liberty and the Bodies Exhibition were displayed right upon entry. Inside the lobby, people surf the Internet on their laptops. Three tourists from Europe, two from England and one from Ireland said they decided to stay at the Continental because the rates were so low: $120 for seven nights.

"If there wasn't a place as cheap as this, we may not have come to New York City," said a British tourist staying at the Continental, who said that the accommodations were fine. Or, she added, "we would have had to save more money and come at a later time."

The tourists did not realize the building was primarily residential. The Irish visitor said that he noticed approximately 30 tourists checking in at the lobby the night before. "I can see how that must be so annoying for the residents," he said.

By most accounts, the accommodations are modest at best. In reviews of the Candy Hostel on, many tourists complained of unclean shared bathrooms, rooms with rat traps, doors with broken locks, infestation of bed bugs and issues with payments. The Continental, called The Fresh Hostel had similar negative reviews.

Insecurity at Home

The long-term tenants have different concerns. According to the Cooper Square Committee, tenants living in these buildings feel less safe as strangers o in and out of their buildings. Housing Conservation Coordinators charges that landlords who operate these hotels often harass legitimate tenants to force them to make more rooms available for tourists.

"All they have to do is force out permanent, rent-stabilized residents. They do this by making tenants' life miserable through systematic harassment -- lockouts, threats, frivolous lawsuits -- they're very effective. Ultimately, for every building where landlords can operate an illegal hotel with impunity, we can count on those affordable units disappearing," Matt Wade, a tenant organizer at Goddard-Riverside Community Center's West Side SRO Law Project has said.

"Illegal hotels are kicking out tenants and taking much-needed apartments off the housing market," John Raskin, the director of organizing at Housing Conservation Coordinators has said.

On a recent drizzly March day, several tenants seemed fearful, declining to give their names to a reporter. When security guards noticed that I was speaking to residents, they asked me to leave the premises for "soliciting," and ultimately called the police on the grounds I was "harassing residents." One security guard followed me for two blocks until I was met by police officers who questioned me briefly.

If the tenants do move from these buildings, many will find it difficult to get another place to live. Marti Weithman, project director for Goddard Riverside SRO Law Project has said that tenants forced out of SRO units are low-income New Yorkers who may turn up in the homeless system.

Looking to Legislation

In light of such concerns, Assemblymember Richard Gottfried has introduced a bill that would clarify provisions relating to occupancy of such buildings. It calls for defining the term "permanent residence purposes" as occupancy by a "natural person" or family for 30 consecutive days or longer. This clarification is intended to clear up the ambiguities in the law . Currently, building owners say that the permanent or long-term residence requirement is met when the unit is leased by a corporate entity for more than 30 days, though it may occupied by actual persons for less than 30 days.

State Sen. Liz Krueger has proposed similar legislation in the State Senate."

Current penalties for the operators of such hotels are $800, regardless of the number of units being converted, the length of time the unit was used as a hotel room, or whether it was a repeat offense. Intro 534, introduced by Councilmember Gale Brewer, would increase the penalties for such violations from $1,000 to $,5000 for a first offense, and introduce a per-unit, per-day fine structure.

"Permanent residents who have to get up in the morning for work, and tourists who are on a tight budget and partying while on vacation, are not compatible 'living' next door to each other, sharing the bathroom, or meeting in the hallways," Brewer has said.

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