Gov. Signs Illegal Hotels Bill

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By Alice Robb

A new law will protect New York City tenants and tourists from the dangers of illegal hotels. The bill, sponsored by State Senator Liz Krueger and Assembly Member Richard Gottfried, was signed into law July 23 by Governor David Paterson.

For decades, landlords have exploited ambiguous wording in state and city laws to set up hostels for tourists, renting out small Single Room Occupancy units in apartment buildings to tourists looking for a good deal. Tourists, often drawn in by online ads, don’t always realize until they arrive that their housing is not in a bona fide hotel.

The new bill will make it easier for government agencies to prosecute landlords who rent out rooms to temporary visitors, and to collect the appropriate real estate taxes.

“By removing a legal gray area and replacing it with a clear definition of permanent occupancy, the law will allow enforcement efforts that help New Yorkers who live in SRO units and other types of affordable housing preserve their homes,” Paterson said, in a statement.

Permanent residents will no longer have to worry about the risks posed by illegal hotels.

“This is a real win-win for New York City residents and visitors,” said Kruger in a statement. “Residents will no longer see their apartment buildings overrun by transient tourists and visitors will no longer have to worry about arriving to find that their hotel is actually an apartment building.”

Residents of SRO units have been chased out of their homes by landlords seeking to make more money by renting their rooms out to tourists.

“This legislation is a crucial step in the preservation of affordable housing and SROs,” said Yarrow Willman-Cole, of Goddard-Riverside West Side SRO Law Project.

The real estate industry has been critical of the law. Real estate attorney David Satnick, partner with Loeb and Loeb, said that the rent from the transients allows landlords to improve their buildings. Without that funding, he believes that the apartment buildings will fall in to disrepair.

“It will turn away budget minded tourists who can’t afford pricey hotels and 1,000’s of workers will lose their job because of this bill,” he said.

The new legislation includes exceptions for roommates and boarders who rent rooms along with permanent occupants.

Putting a stop to illegal hotels will also put thousands of apartments back on the housing market.

The law is set to go into effect on May 1 of next year.

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