Was the New York City homeowner renting on a short-term basis running an illegal hotel operation prior to Governor Paterson signing the bill into law?
The new Law as written would make it illegal for any multiple dwelling (any building with over 2 rentals units) to rent even 1 of their units out for under 30 days (including brownstone and townhouse owners unless their property has 2 or fewer units).
Proponents of the Bill state that it will “fulfill the original Intent of the law”:
The memorandum accompanying the bill stated that “this bill will fulfill the original intent of the law, as construed by enforcing agencies, including the New York City Department of Buildings, by modifying the specific provisions of the Multiple Dwelling Law and applicable local codes […].”
However it seems that in the process of clarifying the “intent” of the law, this storm of controversy has turned into a tornado, ever broader and more encompassing, sweeping up owners of individual Condos, Co-Op units, and rental apartments alike in the process.
The Multiple Dwelling Law was enacted in 1929. At the time the legislative intent of the law was stated to be the following:
“It 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 the establishment 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.” 
The mention of “intensive occupation” seems to indicate the law was geared toward large buildings with multiple units being used in a way that was unregulated, leading to substandard conditions that were a threat to health, safety, and public welfare. Clearly it doesn’t look like it was meant to target individual and small property owners, so how did the “little guy” get caught up in all this mess?
Laws can’t be effective if they are not enforceable. (The alleged intent behind the new legislation)
City of New York v. 330 Continental LLC, 60 AD3d 226, 231 (1st Dept. 2009) . 
In 2007, a lawsuit was brought by the City of New York against a group of so-called illegal hotels to prevent them from renting some of the units for stays less than 30 days. The court in City of New York v. 330 Continental LLC, 60 AD3d 226, 231 (1st Dept. 2009) refused to enjoin these three SRO apartments buildings for renting short-term stating:
Stays of less than 30 days in Class A multiple dwellings do not amount to a violation of local zoning laws or the buildings’ certificates of occupancy as long as only a minority of units in these buildings are used for short-term occupancy.
The Court found that the City failed to demonstrate that most of the units in any of the buildings were rented for such short-term occupancy and that the rental of a minority of a building’s units for nonpermanent occupancy would violate neither the ZR nor the certificate of occupancy, due in part to the following:
The ZR permits “apartment hotels” (such as the buildings in question) in general residential districts, and the ZR defines an “apartment hotel” as a building whose units “are used primarily for permanent occupancy” (ZR § 12-10 [emphasis added]).
Multiple Dwelling Law § 4 (8) (a) requires that a class A multiple dwelling be “occupied, as a rule, for permanent residence purposes” (emphasis added). Here again, the statute’s use of the phrase “as a rule” indicates that a secondary use of the building, different from the specified primary use, is permitted.
The Court cited these examples of vagueness and ambiguity and further pointed out the City failed to identify any legal authority that defined what constituted “transient” and “permanent” occupancy, relying instead on a definition derived from the affidavit of an architect employed by the Department of Buildings.
The proponents of the new Bill claim it was drawn up to address the recent ruling in [City of New York v. 330 Continental LLC].” The memorandum accompanying the new law provided “[i]t is impossible to enforce the law against illegal hotels if the law is interpreted in the manner compelled in this case” 
Legislators craft and propose the law but it lies with the Courts to interpret the law. It seems it will take another case brought before the courts by either the City or its residents to determine the new interpretation of this Law and if it is truly fulfilling its “intent”. Only time will tell what the devastating aftermath of this storm we have weathered will be, and if New Yorkers and property owners worldwide will be left standing in the rubble to pick up the pieces.
 New York State Multiple Dwelling Law