Council seeks to halt spread of illegal hotels

The Bronx County Courthouse’s green roof, funded by the Bronx Initiative for Energy and the Environment. Photo: The Bronx Overall Economic Development Corporation.

Proposal would increase fines for illegal conversions of residences into hotels. On December 3, 2007, the City Council’s Committee on Housing and Buildings held a public hearing on a proposal to increase fines on building owners who illegally convert residential units, especially rent-regulated ones, into hotel units.

Council Member Gail Brewer sponsored the proposal as a way to eliminate these illegal conversions, which she feels drain the limited housing supply, place additional pressure on the tight rental market, and deny permanent tenants the quiet enjoyment of their homes.

The proposal specifically prohibits the conversion of dwelling units classified as J-2 or J-3, which are intended for month-to-month or longer stays, to hotel units intended for day-to-day or week-to-week stays. Owners who illegally convert such dwelling units would be subject to the following fine schedule per unit: between $1,000 and $5,000 for a first-time offense, $2,500 and $5,000 for a second offense committed within an eighteen-month period, and $10,000 and $20,000 for a third or subsequent offense committed within an 18-month period.

At the hearing, Shari C. Hyman, Director of the Mayor’s Office of Special Enforcement, testified in support of the proposal. She emphasized that the current legal framework is characterized by “insignificant penalties.” Hyman further stated that illegal conversions create unsafe conditions, divert services away from permanent residents to transient guests, and harm the character of residential neighborhoods.

State Senator Liz Krueger acknowledged that the fine increase is not a “silver bullet,” but supported the proposal because it would be an effective way to deal with “low lying fruit.” State Assembly member Linda B. Rosenthal also testified in support, describing the current fine structure as “laughable.” State Assembly member Micah Kellner saw the proposal as a way to protect tenants, who oftentimes are harassed by building owners seeking to earn a higher rate-of- return from tourists and other transient guests.

Council Member Lewis A. Fidler, however, expressed his concern that the proposal would shut down many legitimate businesses that have operated as hotels for decades, paid taxes to the Department of Finance as such, and currently employ scores of union workers. He worried that the proposal would “create a new problem by solving an old one.” Council Members David I. Weprin, Jessica Lappin, Rosie Mendez, and the Committee Chair Erik M. Dilan all addressed Fidler’s concern, restating that the proposal’s purpose is to protect tenants and the housing stock, not attack the hotel industry or discourage tourism.

Dilan closed the public hearing, but did not announce when the Committee would vote on whether to send the matter to the full Council.

Council: Hearing on Int. No. 534 (Dec. 3, 2007).


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