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New Bill Introduced To Regulate New York City Vacation Rentals (as Opposed to Banning them)

April 20, 2011

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.

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31 Comments
  1. Edwin permalink

    Don’t answer any questions period. You as a tenant are not violating any laws. You are free to not answer the door or to close the door. Relax its not a crime:)

  2. I own and manage four different VR units in Paris and we are facing the same problem as you in NY. In fact, the law here has been in existence for many years now but it had never been applied. Not until two years ago when the mayor of Paris suddenly decided otherwise. He is now using the law in support of his political agenda by claiming that the ban would lower rental prices by freeing up more apartments of owners who cannot rent them short term anymore. So, in effect, he has already started the lynching before even finding out if the law was still appropriate as written, or even if it would accomplish what he claims it would.
    I’m curious to know if anyone knows where I can find the first results of the consequences of the NY ban to this effect (if they exist) or anything similar we can use in our campaign over here?
    Thanks.
    W. Halabi
    Paris

    • Hi,

      We have found a few reports analyzing the economic contribution of vacation rentals in other cities and towns across the US but none specifically examining the negative economic impact of New York City Short-Term Rental Ban.

      I hope that you will find the information provided in the following studies of interest to you:
      -Report of Economic Contribution of Vacation Rentals in Osceola County, Florida: http://www.visitkissimmee.com/file.download.php?id=15
      -White Papers prepared by VRMA: http://www.vrma.com/resource/resmgr/files/industryimpactwhitepaper2.pdf

      • whalabi permalink

        Thank your for this valuable information. Our mayor seems to be very keen on applying the new law on the basis that it will contributed to a decrease in rent prices to Parisians, which is a nonsense political promise because most owners will prefer keep their apartments empty instead of having to deal with existing rent restriction laws.
        it seems, however, that a compromise of some sort will be happening soon, but much is still to be done in order to achieve an intelligent solution. Among the things that we are still working on is a governance policy that would “regulate” how the short term rental activity can coexist with neighbors in the same building. I have started to make a list of proposals to this effect. But if you have anything of the sort on your side, I’d also appreciate it.
        Walid

  3. I actually called the office of rep. Golden and expressed concern about the bill that banned short term rental and expressed my knowledge how that the Mayor’s office of special enforcement is now targeting (after they already had shut down the large SRO’s operating as hotels) they are targeting small properties with 3 or 4 apartments that rent their units for tourists. We are taking about 8 to 10 people here. Very small operations. They pay taxes, the properties are well taken care of and reviews are actually very good and people love them.

    I believe more and more people need to call their office to voice their the support for rep. Golden’s proposed bill to regulate short term rental.

    • Edwin permalink

      I totally agree. The ban on renting short term property is just another ploy for NYC to issue hefty fines thus generating income for the cash strapped city. Another aspect to this is that the NYC hotel industry has powerful influence by making political contributions to State Senator such as Liz Kruger. The NYC Hotel Industry has political influence and seek out lobbyist to get what ever it takes to protect their industry.

      • Peter permalink

        I went to an assembly meeting last April of which Vito Lopez was the head. Many people spoke out against this law and others told stories of how slum lords build walls and may offer a sofa for one or two days. People were drinking etc. In other words a testimony to preserve the law. However most of the testimony was to support Sen Golden’s bill. Have a license issued to those renting short term. They would pay and renew it for a fee as proposed in the Bill. Sen Lopez did not budge however it is obvious the public consensus is far and away in favor of Sen Golden’s bill. In other words rather than spending tax payer money enforcing a law that does not work let the owners pay a fee to regulate a much more sensible law. This would eliminate the slumlords and keep tourism and local business flourishing.Currently the number of underground rentals (slumlords) has increased by one-third. The current law protects no one and is costing the taxpayer dearly. This was made clear at this meeting.

        Since then I have learned the Liz Krueger is having anyone who testified in favor of Sen. Golden’s Bill investigated and all there real estate reviewed. Can you believe this???? It this Nazi Germany?? IN addition chairman Lopez is no longer Chairman as he has been charged with Sexual harassment of an employee. These are the people who claim to be fighting such a “worthy” cause for the NYC public at large.

        It is critical to get Sen. Golden’s Bill passed in the correct form and we should unite in this effort.

        Thank you…Peter

    • Edwin permalink

      The Golden way is the way to go!!!

  4. Danielle permalink

    Hi all,

    It is now October, what is the outcome of the decision of May 2011?
    I am planning a trip to NY next year in May and found a couple of nice apartments.
    As we are traveling with 6 adults it would just be nicer to have an apartment instead of Hotel rooms. But I am not sure if these apartments are legal or illegal.
    The first apartment is situated on Madison Avenue and all the apartments in this building are rented out for short stays.
    The second one is a private apartment This is what the manager wrote me regarding the new law:
    “The law’s intent is to stop the activities of landlords who have a stock of apartments which they use as hotel rooms instead of otherwise affordable housing for New Yorkers. The units we offer are people’s homes and not part of such a supply. Additionally our lofts are in buildings which are not subject to the law in any case. The law applies only to apartments in “class A” buildings. These are commercial buildings and we have no trouble with any of them.”

    Are those apartments legal or illegal. The more I research on internet the more confused I get. It would be great if you could help me out here.
    Thank you :)

    Danielle (Luxemburg)

    • dominika permalink

      Most probably both of the apartment rentals you are asking about are illegal. The first option is because most probably it is in a Class A Multiple Dwelling.
      The second one because you cannot have dwelling units in a commercial building. But it’s true, the new law does not apply to loft buildings and affordable housing advocacy groups care little about them.

      In any case, the City cannot and will not shut down short term apartment rentals unless there is a fire safety hazard involved (overcrowding, no second exit etc). Short term apartment renters will not be tossed out to the street but landlords may get fines if they’re operating illegally. So if there is an inspection while you are in a short term rental, and you happen to open the door for the inspector, they will ask you how long you are staying. If you admit to staying less than 30 days, they might fine the landlord (but first they will have to prove it was not a one time occurrence which is permitted by the new law) If they find proof of an illegal rental, there is a court hearing (usually 3-6 months after the inspection date, sometimes much longer if the owner files for extension) and the judge will determine what fines will be imposed. I’ve never heard of apartment rentals, small bed and breakfasts/guest houses being shut down (it only happened to hostels with multiple bunk beds in a room and SRO hotels) but during the past couple of months couple of bb’s were fined for operating illegally under the new law (most of them have been in business for more than 10 yrs).
      The chance of you having problems in either of these apartments is slim, however, it does not mean they are operating legally. If they are caught the second time the penalty will be double as much. But this will always be the landlords’ issue.

      Illegal apartment rentals continue thriving, and while many NYC residents are against them just as many are supporting them, both groups for their own reasons.

  5. Well, at least they aren’t banning it. I always felt that renting makes me feel like more of a local, and it helps bring some extra income to those who aren’t always at their place making it more economical for them to stay there.

  6. Peter permalink

    This is in response to Margaret’s comments. Long term renters can be just as disruptive as short term. In many cases worse. Eviction problems and other incidents have actually been more prevalent with long term renters. That said.there certainly is a demand for short term rentals who bring a life blood into the city that helps all aspects of the local economy. They also help keep real estate values stable and can serve to increase demand. For long term renters to live in a highly commercial area such as Times Square and then complain that they can get no peace and quiet is absurd. You simply cannot paint a broad stroke and ban all short term rentals in NYC. The hotels are loving it and that is behind this with the help of Liz Kruger who pushed it through.

    Owners must take a stand now and do what is needed to get this law overturned.

  7. Margaret permalink

    I say don’t allow short term rentals, they are only good for the investors who rent them and terrible for the people who live there and have to put up with these renters. My sympathy goes out to them.

    • sean permalink

      I take your point. But what about the property owners who rent out apartments in their own homes to vacationing renters – where the only people affected are the owners themselves. Surely you wouldn’t begrudge homeowners the right to rent to whomever they choose, and for whatever length of stay is desired.

      • Peter permalink

        That is not true. Many long term tenants are huge problems for neighbors. In fact the evidence shows this is the case. If a short term tenant is renting in a desirable location as a tourist they will pay more than a full time renter., That is true. But this means they are responsible, successful individuals willing to pay a premium for clean,well located apartments. This type of tenant is rarely a problem and generally very sensitive and mindful of others in the building. It is the house or facility that is a hostel or designed specifically to cram people into unsafe or unsanitary units that causes problems for others in the building.

        THIS IS WHY THE LAW NEEDS TO BE MODIFIED AND NOT RESTRICT THE BUSINESS OWNER WHO HAS A BIG INVESTMENT IN PROVIDING SAFE, CLEAN AND HIGHLY DESIRABLE UNITS FOR TOURISTS SHORT TERM.

        The business owner or landlord welcomes regulation and is will to pay their share of taxes and an annual fee to cover the cost of regulation.

        The person who made the comment that only the owner benefits is way off the mark. This means revenue of the city and because of regulation the virtual elimination of the underground hostels that are causing the problem. Also a viable alternative for those tourists seeking a hotel alternative.

        The Golden Bill does incorporate this and actually protects all parties.

  8. Peter permalink

    I am all for unit owners organizing and making a concerted effort to support Sen. Golden’s bill.

    Can anyone suggest exactly how we can organize and take the next step?

    Let’s put an end to the lunacy and repeal this misguided law on short term rental bans.The law in it’s current form does not take into account the need for short term rentals both for tourists and landlords. Yes it can be regulated for safety and health purposes. However, it is ludicrous and very likely unconstitutional to tell a property owner he cannot rent short term even though zoning ordinances permit.

    Thank you…Peter

  9. Ungarelli permalink

    Buon Giorno!
    I am going to stay in NYC next September. I was thinking about renting a flat from private owner via the web… but how do I know that he complies with the new regulations? thanks and regards from Ungarelli Bologna, Italy

    • Thank you for your question!
      You can ask the owner/manager/travel agent whether the short term rental regulations may be lawfully rented for less than 30 days. You can also locate the certificate of occupancy of the building on the Department of Building Website to verify its legal status (J-1 units may be rented on a short term basis etc.)
      Some real estate agents (such as New York Habitat; http://www.nyhabitat.com) have implemented procedures to ensure that the vacation rentals properties listed on their website comply with the new regulations.
      Let us know how it goes.

  10. Ungarelli permalink

    HI, my family and myself we are coming to visit NYC next Sept. How do I recognise that a owner that is lawfully authorised to rent me a flat for one week? thanks Lorenza Italy

  11. James Hickman permalink

    The government needs to stay out of people’s private homes. The ban on vacation rentals – which is a grass-roots movement BTW – is being driven by mega hotel owners. In my opinion, Paris Hilton has enough money. If people get a better deal by staying in the homes of other individuals (as has been done since time began BTW), they ought to be left alone. Paris Hilton’s lobbyists can screw themselves.

  12. cecile permalink

    Can you write an entry about what the mayor’s task force does when they find someone staying in a short term rental as a tenant (not owner).

    What should someone do if they are staying in the apartment and the task force / police knocks on the door? What is the short term tenant legally required (or not required) to do? Can they kick the short term tenant out right away? Can the short term tenant be arrested or fined?

    What are the consequences for the owner?

    • Dear Cecile,

      Jason Post, a spokesman for New York City’s Mayor, stated that an individual staying in an illegal short-term rental could be forced to relocate to another accommodation if safety hazards (fire hazards etc.) were to be found in the building.
      Owners (not transient tenants) may be required to pay penalties.
      Let us know if you have any other questions,

      Thank you.

    • Hi Cecile,
      Let me answer you concern as well. A short term tenant is only asked to relocate in case of a “real” fire hazard, that is if you are, say, sitting in a room with 20 others in bunk beds etc….it is never the case that they evict you because you rented an apartment for less than 30 days. Secondly, you are not obligated AT ALL, to speak to any of them if they come to investigate or try to search the place. In fact, the search in this case is illegal and by law, you are able to ask them to leave. Fire marshals, and only fire marshals can inspect the space for immediate hazards if they suspect that they is over crowding. Again, they can’t force you to even answer any of their questions, let alone arrest!…OMG….NO they can not arrest you and they sure don’t need or want to arrest you…..! you have the wrong idea……They can demand inspection from the owner by posting a “call for inspection” notice but this is not something a tenant needs or can deal with but only the owner!

  13. Peter permalink

    Hi, Thank you for the response. This new law has many unit owners trying to scramble and protect themselves. Short term rentals are the life blood for many unit owners. This law was very poorly thought out with little regard on how many people will get hurt or what may and will happen to real estate values This new bill that is proposed is critical and must be passed. The hotel lobby will fight this to no end and we must make a concerted effort NOW!!

    In the meantime I believe setting up as a separate corp and not owning the unit personally makes sense. The law pertains to owners thus if a separate corp or vacation club as an entity owns the unit it may be insulated. There many large vacation clubs that own units in Manhattan. There is no way they will stop short term rentals for their members.

    I have contacted many lawyers and most don’t even know about the new law.

    Any input and or solution on how we owners can protect ourselves now is welcome pcd1@optonline.net

    • We created this site to help people exchange ideas on this topic and to get people informed.
      This week is a very important week before the May 1rst deadline.
      I would suggest that you subscribe to our blog so you can get notification when there is new posts coming out.
      Good luck with everything . We will keep your email address for future meetings.

  14. Peter permalink

    Owners should make a concerted effort here. What is the status of this bill?
    Also, under the current law if the unit is owned by a vacation club does it exempt the owner? What can an owner do at this point to be insulated from the law?

    In NYC this law is too broad and oversteps its intent. Valid units that comply with health and safety standards should NOT be included.

    • Thank you Peter for your question.
      We would have to do a little bit of research to respond to your question.
      We know of owners who are currently operating vacation clubs but we do not know how they operate. Will they change their membership documents in view of the new legislation coming into effect in May 2011 etc.? It is a possibility.
      I believe it would take some work: agreements to draft, regulations to review.
      It is another avenue to explore.

    • Dear Peter,

      At this point in time, the amendment, S4263-2011, has made it as far as the rules committee, but no further. Owners should work together to lobby for rules and regulations protecting their rights as well as the safety and security of short-term renters.
      Let us know if you have other questions.

      Thank you.

  15. John Baumier permalink

    Finally, common sense could written into law…correcting all the short coming
    of last year law. New York city deserves decent short term rental from smaller
    operators like in every large developed city in the world.

    • Yes I agree Jean Noel! We will keep everyone posted on new developments as we are approaching the May deadline.
      If you have idea of possible articles you would like to see published, please send them our way.
      This is a battle that will unfortunately continue long after May 1rst.
      Thanks for sharing your thoughts

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