As some of you may know, the City of Paris has been cracking down on owners renting their apartments on a short-term basis. According to the City of Paris, an owner cannot let his or her apartment for less than a year unless he or she has previously been granted an authorization. This authorization can only be obtained by having the property reclassified as a commercially-zoned property (a very costly, if not impossible undertaking).
Penalties for owners renting for less than a year are severe and a fine of up to 25,000 Euros ($31,240) can be imposed.
The APLM was formed in March 2010 by a group of rental professionals partly in response to the new challenges facing the short-term and vacation rental industry in Paris. We recently conducted an interview with a member of the APLM, Alexandre Mony.
Q: Can you introduce APLM to our readers?
A: “The APLM (Paris Furnished Rental Association) was created in March 2010 and is a non profit organization. It was formed by a group of professional rental agencies mainly based in Paris who felt a need to work together toward establishing common business practices and ideals for the betterment of the long and short term furnished rental industry in France and in particular in Paris.”
Q: What are the APLM’s goals?
A: “Our main goals are:
- Promoting and defending the interests of the members of the association.
- Promoting the furnished rental business to the public.
- Developing a charter of good business practices, thereby providing our members with a code of ethics and endeavor to assist our clients to the best of our abilities.”
New York State Capitol in Albany, Chambers of the State Legislature
The former version of the Golden Bill
The former version of the Golden Bill created a vacation licensure structure (an owner to rent a unit for less than thirty days had to obtain a ‘vacation rental license’). This vacation rental license had to be renewed every two years for a fee of $200. For further information about the prior version of the bill, see our article dedicated to bill S4263-A.
The amended version of the Golden Bill
* The term “vacation rental unit” is replaced by the term “short-term rental unit”.
* The new version of the Golden Bill merely requires a “short-term rental unit” (a unit rented for less than thirty days) to be registered with the New York City Department of Buildings (“DOB”) for a fee of $200. The new version of the bill does not require this registration to be renewed.
* The new version of the bill limits how many units in a residential building can be rented out for less than 30 days:
Building with 5-10 units: no more than 50% may be used as short-term rentals;
Building with 11-20 units: no more than 49% may be used as short-term rentals;
Building with 21+ units: no more than 10% may be used as short-term rentals.
* The new version of the bill provides for increased penalties:
Fines (for not registering with the DOB or for making fraudulent or misleading statements on the registration application) range from $1000 to $2000. The fines in the former version of the bill ranged from $500 to $1000.
* Rent-controlled, rent-stabilized and other subsidized housing units cannot be registered as “short-term rental units.”
What do you think of the new version of the Golden Bill? It is more likely to pass in the Senate? Are the requirements laid out in the amended version of the bill more likely to be followed by individuals renting their units for less than thirty days (registering one’s unit as a short-term rental as opposed to obtaining a ‘vacation rental license’)?
New York City Hall
Chambers of the City Council
A public hearing will be held on April 27, 2012 regarding the implementation and impact of the Short-Term Rental Ban in New York City (“Chapter 225 of 2010”).
Where: 250 Broadway
Room 1923, 19th Floor
Assembly Hearing Room
New York, NY 10007
When: Friday, April 27, 2012 at 11:30 AM
We encourage all of you to attend this hearing whether you would like to testify or not. Please note that testimonies will be limited to 10 minutes per person.
Mark your calendar and make your voice heard on April 27th!
If you would like to testify, you should email your public hearing reply form as soon as possible to kergara@assembly.state.ny.us
Senator Golden
who sponsored the new bill
Bill S4263A-2011, sponsored by Senator Martin J. Golden, advanced to third reading in February 2012.
When a bill advances to third reading, it becomes ready for a final vote. However, a bill advancing to third reading does not guarantee that it will be voted on: it could be laid aside, or returned to committee for further study by the bill’s sponsor or it could be placed in an inactive file by the Majority Leader.
Will the Golden Bill be voted on or remain in limbo?
Recap on Bill S4263A-2011
Bill S4263A-2011 seeks to narrow the scope of the recent Short-Term Rental Ban in New York City.
The purpose of the bill is said “to provide an exemption for a specific class of good actors” who rent residential apartments on a short-term basis.
Under this proposed legislation, owners or leaseholders of a residential unit are allowed to rent for less than 30 days provided that:
(1) The unit is not a SRO (Single Room Occupancy)
(2) The unit has at least one bathroom and one kitchen
(3) The unit has smoke detectors in each room
(4) The unit carries sufficient fire, hazard and liability insurance and
(5) The unit has a valid vacation rental license.
Chicago implemented a unique vacation rental license system in 2011
Vacation Rental License Regulatory Framework
Other communities across the US and Europe have adopted a similar regulatory framework. For example, Amsterdam’s short stay accommodations have been regulated since 2009 and Chicago’s vacation rentals since January 2011.
Proposed Vacation Rental License for the City of New York
- Application Fee: $ 200 (renewable every two years).
- The license is good for one unit only.
- A license is not be required if the owner rents his unit(s) less than 15 days per year.
- Licensee must rent for at least 48 consecutive hours.
- Licensee must keep guest registration records etc.
In April 2011, we posted an article about a former version of this bill regulating vacation rentals in New York City. What version do you prefer?
A potential flaw in Bill S4263A-2011?
Please note that if the licensee operates its own website, the license registration must be posted on the website. However there appears to be no such requirement if the licensee advertises his/her property on an online rental marketplace or a classified ads website.
All would benefit from such requirement to be imposed on online rental marketplaces/classified ads websites – as it would make it harder for tourists and business travelers to be scammed (a proper license registration number would need to be posted along the advertisement) and it would further “help to eliminate the type of illegal short-term use of class A units that the 2010 law sought” (one of the bill’s stated objective).
Moreover, there is no doubt that the New York legislature might be more amenable to authorize the operation of short-term rentals in residential apartment buildings in New York City if there was a system in place ensuring that owners collect the appropriate taxes from their guests.
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What role(s), if any, should an online rental marketplace/classified ads website play in the implementation of such a system? Give us your opinion
On March 21, 2012, we sat down with Vinessa Milando, the President of the non-profit trade association StayNYC. Read her interview below to find out about the goals and aspirations of StayNYC and the significant impact the Short-Term Rental Ban (“Chapter 225 of 2010”) has had on small businesses in New York City.
Q: What is StayNYC?
A: “Stay NYC is a non-profit trade association made up of NYC Bed and Breakfast owners all of whom are registered with the City of New York as small facility operators.”
Q: What are StayNYC’s goals?
A: “We are advocating for an exemption to this state law for a specific class of small facilities operators. Our members are all compliant with state and city sales tax, occupancy tax and hotel tax. We are working to educate NYC residents and legislators alike to the important role B&B’s play in New York City’s hospitality industry. We believe that we are unintended targets of Chapter 225, a New York City housing law passed in 2010 and regulating rentals in the city for less than 30 days and we are confident that by working with our officials we can attain our goal to remain viable legal and successful.”
Q: How many members does StayNYC have?
A: “We have less than 10 members.”
Q: What is the profile of a StayNYC’s typical member?
A: “The majority of our members have been in business for over 2 decades and have an average of only 5 rooms. We are typical small businesses, many of whom are women and minority owned. This is our livelihood. Unlike the targets of the law, our buildings are not mixed-use properties, where tenants may have safety concerns. Our very small buildings are exclusively used as bed and breakfasts. We are very proud of our established clientele who return year after year for visits to our neighborhoods. In line with the city’s “Just Ask the Locals” campaign, we provide friendly personalized service, support other small neighborhood businesses, and are welcome in the fabric of our communities.”
Q: Can anyone become a member of StayNYC?
A: “One of the reasons we are such a small association is because of our stringent requirements for membership. We do pay monthly dues. Specific information on membership can be found on StayNYC website:
1. Our members are registered NYC small facilities operators; on our certificate of authority it says Bed and Breakfast. We collect and remit hotel tax.
2. All members pay State and City sales tax and required Occupancy taxes.
3. We exclusively use our small buildings as a Bed and Breakfast.
4. Our members own on average only 5 rooms.
5. None of our buildings contains rent-regulated units, none are termed affordable housing.”
Q: Does StayNYC organize conferences and workshops? Or plan to?
A: “We have not had the time to organize any conferences or workshops at this point. Our singular focus is to gain an exemption and remain in business. We have built a grassroots campaign using social media and we have an online petition, which I urge everyone to sign. We also have a StayNYC Facebook page where interest is growing daily, as well as a popular StayNYC Twitter profile. We are meeting with the NYC legislators, NY Assembly and the NY State Senate to explain our issue and work with them to achieve our goal.”
Q: Any other information or specific messages you would like to convey to the readers of Protect Vacation Rentals?
A: “StayNYC members combined to infuse over $4 Million into the local economy in 2010 through daily expenditures by guests and city and state taxes! Our members belong to Professional Association of Innkeepers (PAII) and to National Federation of Independent Businesses (NFIB). We are vital small businesses that have survived and thrived after 9/11 and the recent economic crises. We provide a safe, unique alternative to the visitors of New York City, many of whom are artists or families who choose not to stay in a hotel for a variety of reasons. Several of our members have become targets of the mayor’s special task force; we have legal fees and astronomical DOB fines to deal with. This law has devastated our businesses and we are asking for your support. Please sign our petition to ask for an exemption of the Chapter 225 of the 2010 state law on less than 30-day rental and consider a donation. Your support can help keep small businesses alive.”
For information about the association and to order flyers to spread the word about StayNYC , please email them at info@staynyc.org. Also, read our article to learn more about the advantages of joining a trade association in the fight against the NYC short term rental ban.
New York Illegal Hotel
On December 13, 2011, the New York City Committee on Housings and Buildings conducted a hearing on Intro. 404.
Intro. 404 would amend the Administrative Code of New York City to provide increased penalties for illegally converting a residential apartment into a short-stay rental.
Intro. 404 would classify as “immediately hazardous” an illegal conversion involving more than one unit in the same building or a subsequent violation in the same apartment.
Renting one’s apartment as a vacation rental: an immediately hazardous condition?
Immediately Hazardous Violations are defined in the Rules of New York City as those “where the violating conditions poses a threat that severely affects life, health, safety, property, the public interest, or a significant number of persons as to warrant immediate corrective action.”
Unlawful Demolition in New York is an example of an “immediately hazardous” condition. (Image courtesy of http://www.publicdomainpictures.net)
Unlawful Demolition is an example of an “immediately hazardous” condition.
Immediately hazardous violations are subject to fines ranging from $1,000 to $25,000 with the latter applying to repeat or aggravated violations. A separate additional penalty of up to $1,000 may be imposed for each day a violation remains uncorrected.
Senator Krueger is in favor of the proposed city-wide legislation
Please click on the following link to access Senator Krueger’s testimony in support of Intro. No. 404: http://www.lizkrueger.com/wp-content/uploads/illegal-hotels-council.pdf
3 Bedroom Vacation Rental in Upper East Side New York
Note that throughout her testimony she does not use the term “vacation rental” but instead equates renting/subletting one’s apartment for less than thirty days as running an illegal hotel. Is this a fair comparison? In communities elsewhere, renting one’s home on a short-term basis is a legitimate activity, overseen and promoted by local agencies.
Very few individuals offered testimonies against Intro. 404 at the December 13th 2011 hearing. We need to make our voices heard against this irrational and incongruous proposed amendment.
A new bill was recently introduced by Senator Martin J. Golden intended to amend the yet to be implemented short-term rental ban in New York City.
The purpose of the bill “is to provide an exemption for a specific class of good actors that rent certain class A multiple dwelling units on a short-term basis.” [1]
As long as the “class A” multiple dwelling unit (i) is not a single room occupancy, (ii) contains a bathroom and kitchen, (iii) has working smoke detectors located in each room and (iv) the unit has sufficient fire, hazard and liability insurance to cover those persons using the unit for such occupancy, the unit could be lawfully rented for less than thirty days.
The accompanying memo further provides: “Last year’s law was written to encompass a greater universe than was intended. While it successfully phases out SROs [Single Room Occupancy Buildings], it also is ridding New York State of a legitimate business model: short-term rental units. These short-term units provide tax income to New York and tourism dollars to the areas in which they are located. They should not be confused with the small single room living spaces that are SROs, which often get associated with decrepitude, poor maintenance, and numerous building and health code violations. While one can certainly find examples of municipalities and a few states regulating short-term rentals, it is a hard-pressed task to find those which completely ban it. This legislation would help those individuals and small businesses that will no longer be able to operate because of this law.” [2]
Please note that Senator Golden voted against S68730-B/ A1008-B (also known as the “illegal hotel” bill) in June 2010. He is currently representing Brooklyn’s 22nd Senate District.
Submit a comment, below, to share your thoughts on this proposed legislation.
[1] http://open.nysenate.gov/legislation/bill/S4263-2011
[2] Ibid.
