New York City Council’s Committee on Housing and Buildings, Chaired by Council Member Jumaane D. Williams (D-Brooklyn), Deputy Leader, held an eight hour oversight hearing on Tuesday titled “Short Term Rentals: Stimulating the Economy or Destabilizing Neighborhoods” to allow Council Members an opportunity to better gauge the effects of illegal hotels on New York City’s affordable housing stock. The Council received testimony from representatives of the Mayor’s Office of Special Enforcement, the Department of Housing Preservation and Development (HPD), tenants, tenant advocates, representatives of home-sharing websites including Airbnb, elected officials and others on how illegal hotels operate and effect New Yorkers.
During the hearing, Council Members received an overwhelming amount of complaints that illegal hotels pose a grave threat to New York City’s already limited stock of affordable housing, and further encourages landlord harassment, and creates building-wide security, safety, and nuisance issues that disrupt the quality of life for tenants and illegal renters alike.
“With a housing vacancy rate of only 3.12%, steadily increasing rents, and widespread income stagnation, it goes without saying that New York City is in a housing crisis, fueled by home-sharing websites like Airbnb that account for more than 14,000 illegal rentals in the five boroughs. This is a fundamental problem not just in New York City but across the country. As Chair of the Council’s Housing and Buildings Committee, it is my hope we work to combat illegal hotels by expanding our Administrations resources, strategies, and further penalizing bad acting landlords. These efforts will aid to ensure the Mayor’s Affordable Housing Plan does not fall short of it’s 200,000 unit goal and that New York City remains affordable for all,” said Council Member Williams.
For over a decade, there has been debate on the issue of the conversion of long-term occupancy residential buildings into short-term rentals or illegal hotels. Those in support of allowing conversions argued that short-term rentals help bring in additional revenue for homeowners and tenants, stimulate the economy, and provide greater affordability for visitors. Opponents argued that short-term rentals are often illegal and that they deplete the supply of affordable housing, while possibly violating numerous city laws/ codes, including various building and fire codes that present safety hazards to occupants and their neighbors.
Local Law 45 of 2012 bars illegal conversions of dwelling units from permanent residences. It also classifies the illegal conversion of more than one permanent dwelling unit, or a subsequent violation for an illegal conversion at the same dwelling unit or building, as an immediately hazardous violation. In November 2006, the City established the Office of Special Enforcement (OSE) in response to the spread of illegal hotels in New York City. During the hearing, representatives from the OSE discussed their continued efforts to coordinate enforcement between multiple agencies to inspect illegal hotel complaints.
Complaints relating to illegal hotels are referred from the City Service Center at 311 to
OSE. Upon receipt of a complaint, OSE investigates the conditions by sending an inspection team to the location. If a violation exists, OSE can determine the proper enforcement action and issue Department of Buildings (DOB) violations, Environmental Control Board (ECB) Notices of Violations (NOV), Fire Department violations, and Department of Health violations. ECB violations issued by OSE are referred to DOB’s Administrative Enforcement Unit for prosecution.
“With New York City’s stock of affordable housing units shrinking, Airbnb should come clean about the harmful impact its operations have in our neighborhoods. While there is nothing wrong, or illegal, about live-in property owners legally renting in accordance with housing code, Airbnb facilitates absentee landlords turning rooms into illegal hotels and sucking up units that should otherwise go towards permanent affordable housing. I support the idea of a shared economy but we must share with an eye towards fairness and economic sustainability for all New Yorkers,” said NYC Public Advocate Letitia James.
“I sponsored Local Law 45, and a large coalition worked together to pass the Illegal Hotel Law, because the City needed tools to fight the illegal conversion of residential housing for transient use. New York’s housing crisis is real, and our City needs every tool available to keep more residential units, especially affordable rent-regulated units, from slipping away,” said Manhattan Borough President Gale A. Brewer, who as a Council Member sponsored legislation allowing City agencies to impose larger fines for illegal hotel activity.
“Airbnb and other short-term rental platforms exacerbate the problem of illegal rentals on the Upper West Side and throughout the City. Over the past five years, Airbnb rentals grew from 900 to 21,000, and according to the NYS Attorney General, 72% of these units are illegal. Until short-term rental platforms accept responsibility for their users who profit from illegal rentals, we have to equip the Mayor’s Office of Special Enforcement to shut them down, one by one,” said NYC Council Member Helen Rosenthal.
“With rents rapidly rising but wages remaining stagnant, sharing a spare bedroom can help you earn a little extra money to make ends meet. In reality, the explosive growth of the short-term rental market has created a “sublet economy” that’s seriously hurting tenants and bleeding units from our already scarce affordable housing stock. The testimony we heard today puts a human face on the destructive impacts of illegal hotels. It is abundantly clear that we must provide the Mayor’s Office of Special Enforcement with the tools and resources it needs to hold these illegal hotel operators accountable,” said NYC Council Member Mark Levine.
“Illegal hotels are not just a problem in Manhattan – with the demand for tourism in the outer boroughs, they are becoming an issue there as well. I am primarily concerned with property managers and owners who warehouse apartments and rent them out illegally, taking those units completely off the market for renters who need housing. The businesses that host these listings should not be benefitting from this illegal behavior. We need to find legislative and enforcement solutions that allow for legal sublets while cracking down on illegal hotels and getting much-needed housing back on the rental market,” said NYC Council Member Antonio Reynoso.
“Right now hundreds of residents in Washington Heights, Harlem and Crown Heights are being pressured by their landlords to vacate in order to make room for these profitable illegal hotels. The residents of our communities are already being pushed out, we don’t need private companies coming in, operating illegally and further pressuring our communities to leave. We must protect those most vulnerable to these pressures, seniors and working class New Yorkers, and crackdown on these illegal activities that have such destructive ripple effects in our communities,” said NYC Council Member Ydanis Rodriguez.
“We must not allow working class New Yorkers to be entirely squeezed out of our neighborhoods – but that is exactly what may happen if we do not confront our City’s affordability crisis. Just as important as building new affordable housing is preserving the units we already have. Unfortunately, illegal hotels are endangering our affordable housing stock. I am proud to be part of the Share Better coalition, as neighborhood activists, community and housing groups, elected officials, business and labor come together to stop illegal hotels from proliferating in our neighborhoods,” said NYC Council Member Corey Johnson.
“Illegal hotel rooms pose a threat to residents throughout New York City, by increasing noise, overcrowding and leaving residents feeling unsafe in their very homes. We need to empower tenants to take action against illegal hotels when they are victimized,” said NYC Council Member Rory Lancman.
“The safety and affordability of our city must be protected. We need to ensure that AirBnB is not putting profit over people by allowing unsafe or illegal practices that threaten New Yorkers and the affordability of our neighborhoods. Thanks to the proactive leadership of Chair Jumaane Williams and others, the New York City Council can ask the hard questions about what the sharing economy really means for residents,” said NYC Council Member Ben Kallos.
“We can’t allow short term rental sites to operate contrary to the law and to damage New York’s affordable housing stock. Illegal hotels present a real risk to these units and that is why we are so committed to fighting back,” said NYC Council Member Dan Garodnick.
“For years, tenants have been fighting to rid our city of illegal hotels. Now companies like Airbnb are using their hotel brokerage services to promote illegal hotel use. Their misleading propaganda tries to paper over the fire and safety violations, harassment of tenants and loss of needed housing that comes with illegal hotels. We want to protect the illegal hotel law and get increased enforcement of the law, and more resources and strong penalties for violating the law. Illegal hotels are bad for New York, bad for tourists, and bad for housing,” said NYS Assembly Member Richard Gottfried, the Assembly sponsor of the 2010 illegal hotel law.
“Preserving and expanding affordable, available housing is New York City’s greatest need, and illegal hotels exacerbate the crisis. Some companies are ignoring our laws at the same time as they spend millions of dollars in an attempt to change or scrap them,” “As you will hear today, the work of the city agencies enforcing the illegal hotel law is vital — they are working to preserve residential housing and put those who are converting housing into illegal hotels out of business,” said NYS Senator Liz Krueger, the Senate sponsor of the 2010 Illegal Hotel Law.
“Airbnb is like an invading army. It comes into a city, floods the market with illegal units and only after the incursion is complete does it come to the government, hands out, looking for ways to legalize its illegal hotel activity. Legalizing Airbnb’s activity in New York would further destabilize communities and contribute to the already meteoric loss of affordable housing,” said NYS Assembly Member Linda B. Rosenthal.
“I’m happy to have the opportunity to testify about the pernicious impact of illegal hotels on New York City. While operators like Airbnb and VRBO, and their private capital backers, earn huge amounts of money, everyday New Yorkers must suffer the consequences from their illegal operation. Illegal hotels have exacerbated the affordability crisis of New York’s housing stock, not to mention have increased the safety and security risks for all New Yorkers who live in a building where this activity takes place. I hope the City Council offers a strong legislative response to end this illegal activity,” said NYS Assembly Member Deborah J. Glick.
“Illegal hotels give unscrupulous landlords an incentive to drive up apartment prices and drive out longtime residents, reducing our city’s already limited affordable housing stock,” “According to data released by Attorney General Eric Schneiderman, my district has one of the highest concentration of illegal hotels in the City and I applaud my colleagues at both the state and local level who are working to ensure that our fire, building safety and zoning laws are enforced,” said NYS Senator Brad Hoylman.