The Fines Bill And Why It Is Needed

Fines Increased For Illegal Hotels

On October 2nd 2012, Mayor Michael Bloomberg signed off on Int. No. 404-A also known as “the Fines Bill”, which was written to restrict the proliferation of illegal hotels; transient rentals in residential buildings, a problem which has only exploded since 2010 when the first piece of legislation to deal with the situation passed in Albany. The state bill simply strengthened the Multiple Dwelling laws, first enacted in 1922, which set guidelines for the use of commercial and residential buildings with a view towards creating safe, sanitary living conditions and to avoid overcrowding.

The city bill raises the fines on those landlords/building owners who take part in the practice of illegally using their Class A residential buildings as transient hotels. While this practice first caught fire running youth hostels out of SROs (Single Room Occupancy), it has now spread to pandemic levels in throughout the city. As a result there has also been a reported increase in tenant harassment by landlords wishing to clear out their buildings in favor of running these much more lucrative operations. Tourists have suffered through spending weekends on bunk beds in rooms not much larger than a walk in closet, in dangerous and overcrowded conditions. Despite the 2010 state law, some of the city’s most notorious perpetrators, many of whom own multiple buildings, have continued to flout the law since the penalty for being caught had been a single $800 fine regardless of the number of apartments being used or the nor the number of times that the violations have occurred. Under the new law, the fines range from $1,000 to $25,000. The higher rate of penalties will be applied to repeat offenders. An additional $1,000 dollars will also be applied to each day the problem in not corrected.

Some illegal hoteliers claim to be going legit. Robert Chan proprietor of the now infamous Hotel Toshi,

operated budget “hotels” out of residential buildings both in Manhattan and Brooklyn, claimed in a recent article by Drew Grant of the New York Observer that he is opening a chain of hotels in areas legally zoned for short term stays. Will a new Flatiron Hotel with a trendy nightclub repair Chan’s reputation of lowering the quality of life for tenants in buildings where his illegal short term hotels were based? Fed up with his reign of terror, some residents fought back. After venturing to bring transient use to a residential building on Mulberry street, Chan recalls an angry resident retaliated by posting pictures of his van with his face on it all over SOHO. Shortly thereafter Toshi withdrew from the neighborhood.

Chan’s company, “Smart Apartments LLC” has already been cited by the Mayor’s Office of Special Enforcement , the agency charged with closing down illegal hotels, with 17 units in violation for operating out of residential buildings.

According to the Observer article, it was not only the tenants who get the short end of the stick. Sites like Yelp and Tripadvisor showed complaints from dissatisfied Toshi customers ranging from “slum” conditions to bedbugs to a lack of customer service. But what should not be forgotten is that the tourists themselves only had to deal with Chan’s services for a brief period of time. For long term tenants, the arrival of Toshi meant harassment in the form of constant tourist traffic, noisy parties and disappearing mail.

Robert Chan admitted wanting to open a “hybrid” residential hotel something which he claims does not exist, which may not only reveal his long term intentions but his ignorance of NYC’s history where many commercial hotels casually allowed for permanent residents and A/B hotels which allowed for dual use like the Chelsea Hotel before the new owners took over and are now in the process of trying to remove the few remaining artists who live there.

Until next time…

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