No Easy Solution In Debate Around “Illegal” Hotel Rooms

NYC New York Vacation Rentals Unhotels Protest

Image courtesy of The Villager

[Alvin Brickman for Metrosetter Wire]

An increasing amount of permanent residents of apartment buildings and property owners are speaking out against short-term rentals and “illegal” hotel rooms, and the issue is becoming much more caustic.  New York City has been the setting for a large portion of the most virulent protests, with very outspoken residents, but there’s currently no agreeable solution in sight for the issue.

New York City’s City Council passed a bill last week that increases fines against landlords who illegally convert residential apartments into hotel rooms, which drew many residents out in its support. The Council’s bill is intended to hit landlords of illegal hotels where it hurts, increasing fines — which currently range from $800 to $2400 — to a range of $1,000 to a whopping $25,000 (Spokony 2012).

Longtime East Village resident Charles Selig was one resident who came out to support the bill at a press conference on September 12th. “The transients don’t care about us, they are there for a few days and then they are gone,” he said. “I’ve had people open my door in the middle of the night when I’m sleeping. I’ve had people yell at me because they were upset with the service in the hotel” (Spokony 2012).

The bill’s opponents argue that the converted-hotel-rooms business model represents the next logical step in the hospitality industry. Of those who subscribe to this stance in New York City, Smart Apartments — a reinvention of the now defunct company Hotel Toshi, which had become a notorious “illegal” hotel operator, angering residents all across Manhattan and Brooklyn — has been receiving the most publicity.

Credit: Mad Park News

Hotel Toshi’s founder, Robert Chan (aka “Toshi”), sat down with The New York Observer last week — part of a larger publicity effort to furbish his reputation — and shared his experience on the controversy.  “One woman on Mulberry Street got so angry that she posted a picture of the van with my face on it all over Soho,” he said (Grant 2012).

In response to imminent litigations on “faux-tels,” Toshi chose to go “legit” with Smart Apartments LLC, which has 220 units available in Manhattan and Brooklyn. Luckily for him, landlords are usually the only ones fined, not the individuals renting out their apartments (Grant 2012).

Thomas Cayler, chair of the Illegal Hotel Committee of the West Side Neighborhood Alliance, said, “Any sort of fines they get from the city, they’ll just write it off as the cost of doing business” (Grant 2012).

John Reynolds, the chief operating officer of Smart Apartments, disagrees: “There are better ways of going about this than passing blanket legislation that completely vilifies the industry. We all know that New York is driven by tourism, and our model can be a better avenue for many tourists who can’t afford high hotel prices” (Spokony 2012).

Credit: Housing Exposed

There’s no denying that a substantial portion of New York City’s economy is driven by tourism from all over the world, but there’s also no denying that less apartments for residential use discourages workers from living in the city. City Council Member Mendez supports the latter: “The problem with this industry is that they’re taking away rental apartments for residential use, in a city and an economy where the housing market is already in a lot of trouble,” he said. “…we have to stand up against it by making the fines substantial enough to cause owners to actively modify their behavior and start complying” (Spokony 2012).

So is there solution for New York City that will satisfy both sides of the debate?

“Some guy buzzed my door the other day,” the man said, “and I came out and asked him, ‘Who are you?’ All the guy said was that he was trying to get in. He couldn’t tell me what apartment he was looking for. And I’m like, ‘Why should I let you in?’ But he just kept trying” (Spokony 2012).

Please share your thoughts in the comments section below.

Works Cited

Grant, Drew. “Oh Noshi, It’s Toshi! Airbnb Opportunist Goes Legit With New Hotels” The New York Observer. The New York Observer, 25 Sept. 2012. Web. 12 Oct. 2012. <http://observer.com/2012/09/oh-noshi-its-toshi-airbnb-opportunist-goes-legit-with-new-hotels/>.

Spokony, Sam. “Council Bill Ups Illegal Hotel Fines, but Will It Make a Dent?” The Villager Newspaper. The Villager Newspaper, 20 Sept. 2012. Web. 12 Oct. 2012. <http://www.thevillager.com/?p=7499>.

Images Cited

Charles Seelig. Digital image. Council Bill Ups Illegal Hotel Fines, but Will It Make a Dent? The Villager Newspaper, 20 Sept. 2012. Web. 1 Oct. 2012. <http://www.thevillager.com/wp-content/uploads/2012/09/seelig-photo.jpg>.

Hotel Toshi. Digital image. Flatiron Hotel May Have Bidder, from Hotel Toshi Fame. Mad Park News, 15 July 2011. Web. 12 Sept. 2012. <http://www.madparknews.com/wp-content/uploads/2011/07/hotel-toshi.jpg>.

Siegel, Jefferson. Chelsea Now. Digital image. First City Action Against Illegal Hotels. Housing Exposed, 17 Apr. 2009. Web. 1 Oct. 2012. <http://housingexposed.files.wordpress.com/2009/04/first.gif?w=700>.

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