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

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 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 13^th 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.

- It will apply to many but not all residential buildings in New York City.
- This law will make it illegal to rent Class A Multiple Dwelling units (which include condominium as well as coop units) for less than thirty days within New York City
- You can contact your architect or lawyer (alternatively the department of buildings) to help you determine whether or not your property will be affected by this legislation.
- The full text of the legislation can be accessed via the following link: http://open.nysenate.gov/legislation/bill/S6873B-2009

This law will only be enforced against landlords who have turned their residential building into an illegal hotel/hostel, right?

- The law as written is very broad and it would be reckless to speculate who the law will (or will not) be enforced against.
- Enforcement will be complaint-based and by and large fueled by calls to 311 (New York City’s phone number for government information and non-emergency services).
- These calls to 311 could be made by anyone (a disgruntled neighbor, guest, competitor etc.).
- The Mayor’s Office of Special Enforcement will be charged with investigating the complaints.
- The Mayor’s Office of Special Enforcement is currently responsible for coordinating enforcement efforts across New York City to address quality of issues related to notorious adult use, lawless clubs and trademark counterfeiting bazaars.

But the co-sponsors of this legislation have implied that it is not going to be enforced against small property owners who occasionally rent their apartment for less than thirty days? [1]

- As co-sponsor Liz Krueger herself admitted in an interview in the summer of 2010, “the role of the legislature is limited to passing this legislation and not the enforcement of its provisions.” [2]

Why did the New York legislature choose to ban short-term accommodations as opposed to regulating them and elected to forego the tax revenues collected by short-term rental property and B&B establishment’s owners etc.?

- We do not know but it might be a good question to ask your local representative.

Please stay tuned for updates as the day of implementation approaches.

As always, your comments and questions are welcome.

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[1] http://beta.wnyc.org/shows/bl/2010/jul/08/illegal-hotel-crackdown/
[1] http://therealdeal.com/newyork/articles/10-questions-for-krueger-and-gottfried-on-illegal-hotel-bill

This bill, if passed into law, would impose criminal penalties for individuals who violate or assist in the violation of any provision of the Multiple Dwelling Law (“MDL”) where such a violation has resulted in the death of another as well as impose increased penalties for persons who violate or assist in the violation of any provision of the MDL where such violation has resulted in serious physical injury.

The accompanying memo further provides: “the problem of illegal apartment conversions is persistent and pervasive, and places residents of the State in danger of physical harm or death, and puts tremendous strains on community resources, including building, fire and emergency medical services personnel. An illegal conversion is the creation of one or more additional dwelling units within a building without first receiving the necessary building permits.”

Only illegal apartment conversions are mentioned in the accompanying memo of the bill.  The bill however provides that increased penalties would be imposed on individuals violating or assisting the violation of any provision of the MDL where such violation has resulted in serious physical injury.

Note:  Multiple Dwelling Law (Chapter 713 of the Laws of 1929) was enacted to set standards to maintain proper housing and to guarantee living conditions essential to the safety, morals, welfare and reasonable comfort of the residents of New York State[1].

Examples of MDL violations:

1. Come May 2011, any unit in a class A multiple dwelling rented for less than thirty days will be in violation of Article 1, Section 4 (a) of the MDL.  Bill 6873B amended Article 1, Section 4 (a) of the MDL to provide: “ A class A multiple dwelling shall only be used for permanent residence purposes.  For the purposes of this definition, “permanent residence purposes” shall consist of occupancy of a dwelling unit by the same natural person or family for thirty consecutive days or more […].”
2. Converting a two family dwelling into a three unit multiple dwelling.
3. Failing to make fireproof a multiple dwelling exceeding six stories etc.

The full text of the bill may be found at: http://open.nysenate.gov/legislation/bill/S2127-2011

The penalties for violations are set forth in Article 8, Section 304 of the MDL.  The next article to be posted on Protect Vacation Rentals (“PVR”) will discuss these various penalties.

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[1] Article 1, Section 2 of the MDL provides: “[i]t is hereby declared that intensive occupation of multiple dwelling sites, overcrowding of multiple dwelling rooms, inadequate provision for light and air, and insufficient protection against the defective provision for escape from fire, and improper sanitation of multiple dwellings in certain areas of the state are a menace to the health, safety, morals, welfare, and reasonable comfort of the citizens of the state; and that theestablishment and maintenance of proper housing standards requiring sufficient light, air, sanitation and protection from fire hazards are essential to the public welfare. Therefore the provisions hereinafter prescribed are enacted and their necessity in the public interest is hereby declared as a matter of legislative determination.”

New York City short-term rental ban to come into effect in May 2011

A1000-B/S6873-B, signed into law in July 2010 but coming into effect in May 2011, amended the New York State Multiple Dwelling Law (“MDL”) to prohibit some New York City owners to rent their homes for less than thirty days.

This ban will apply to all “class A multiple dwellings,” which the MDL defines as dwellings occupied as the residence or home of three or more families living independently of each other.

The MDL, however, provides that boarders or roomers may still rent for less than thirty days provided that they live within the household of the permanent occupant(s). [1]

How many boarders or lodgers one is allowed to have in one’s home without being in violation of the MDL?

Four.  [2]

Section 4 of the MDL provides as follows:
A family is either a person occupying a dwelling and maintaining a household, with not more than four boarders… or two or more persons occupying a dwelling, living together and maintaining a common household, with not more than four boarders… A boarder residing with a family shall mean a person who pays a consideration for such a residence and does not occupy such space within the household as an incidence of employment therein.

What does “living within the household of the permanent occupant” mean?

Section 27-2004(4) of the Housing Maintenance Code provides, in pertinent part, that “[a] common household is deemed to exist if every member of the family has access to all parts of the dwelling unit” [emphasis added].

Evidence the DOB will look at to determine whether the unit is occupied in compliance with section 27-2004(4) include:

-Are some of the rooms locked?
-Do the occupants share a bathroom or a kitchen? etc.

Please note that some (not all) administrative law judges may have a very strict interpretation of this requirement and may infer from the existence of locks on individual rooms that the unit was illegally altered for occupancy (in other words, some administrative law judges may see individually locked rooms as separate residences).

Are there any other requirements I should be aware when renting my extra bedroom or room(s) to lodgers?

Yes.

Section 248 of the MDL states, “[t]he letting by a family of one or more rooms within their apartment to not more than a total of four boarders, roomers or lodgers provided, however, that every room in such apartment shall have free and unobstructed access to each required exit from such apartment [….]” [emphasis added].

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[1] Please note that the permanent occupant can either be a tenant or an owner.
[2] Housing Maintenance Code has a more restrictive requirement. Section 27-2004(4)  states “[a] family may rent one or more living rooms in a private to no more than two boarders […].”  Section 12-10 of the Zoning Resolutions defines a family as “either (a) a single person occupying a dwelling and maintaining a household, including not more than one boarder… or (c) not more than four unrelated persons occupying a dwelling living together and maintaining a common household.”

A SRO building (formerly the Alexander Hotel) located in the Upper West Side is to be rented to the non-profit organization Samaritan Village and turned into a 200-bed homeless shelter for single men.

The owner explained that the layout of his building limits its use and that absent the revenue stream brought in by tourists, the rents generated by long-term residents were not sufficient to cover costs [1].  “I just need a tenant who can lease the building from me so I can pay my bills,” he said during an interview given to DNAinfo [2].

Last Sunday, Congressman Charles Rangel, City Councilwoman Gale Brewer and local residents rallied against the plan to convert the Hotel Alexander into a transitional housing facility.

What other unintended as well as unexpected consequences do you think the New York short- term rental ban will have come May 2011?

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[1] http://www.nytimes.com/2011/01/15/nyregion/15homeless.html
[1] http://www.dnainfo.com/20110117/upper-west-side/gale-brewer-charles-rangel-rally-against-uws-homeless-facility