Clarifies provisions relating to occupancy of class A multiple dwellings

Some owners of class A multiple dwellings have been illegally using Class A dwelling units as transient hotels. When called upon to justify this fundamentally unsafe and illegal practice, they have cited the ambiguity of the terms "as a rule" and "primarily" preceding the requirement of "permanent residence" or "long term" residence for such dwellings. These owners have also claimed that the permanent or long term residence requirement is met when the dwelling unit is leased by a corporate entity for more than 30 days even though the actual occupancy by individuals is less than 30 days. This bill would put an end to these spurious defenses by defining the term "permanent residence purposes" as occupancy by a natural person or family for 30 consecutive days or long- er (the permanent occupants). Only the permanent occupants would be permitted to allow occupancy of the dwelling unit for less than 30 consecutive days and even then only by lawful boarders, roomers or lodg- ers or house guests living within the household of the permanent occu- pants or while the permanent occupants are temporarily absent for vaca- tion or other personal reason if there is no monetary compensation for such use. (This would not restrict any right a landlord might have to limit such use.)

The bill contains a narrow exemption for buildings owned by colleges or universities. It allows these institutions to use the larger of five percent of the units in the building for occupancy of less than 30 days for visitors to the institution, provided that there is no monetary compensation for such use.

Section 2 of this bill adds a new subdivision 16 to Section 67 of the Multiple Dwelling Law that would permit legalization of the use of Class A dwelling units for other than permanent residence purposes in certain dwellings constructed pursuant to plans filed on or prior to April 18, 1929 but prior to December 15, 1961, subject to certain conditions relating to past and present hotel occupancy and fire safety require- ments. Occupancy of such dwelling units for other than permanent resi-

dence purposes would be permitted to continue for up to two years after the effective date of such subdivision if that occupancy existed on and after January 1, 2009, and if the dwelling units are registered with the enforcing agency and the owner submits certification by an architect or engineer that the dwelling complies with the fire safety requirements of such subdivision. The owner must obtain a certificate of occupancy authorizing use of the dwelling for other than permanent residence purposes within two years after such effective date. If no such certif- icate of occupancy is obtained within such 2-year period, the department may grant a third year with cause. The applicant may apply to the Board of Standards and Appeals for no more than two extensions of one year if circumstances beyond the applicant's control or hardship prevent obtain- ing a new certificate. All use of registered dwelling units for other than permanent residence purposes must thereafter cease.

Section 3 of the bill would add a new Section 120 to the Multiple Dwell- ing Law that would permit legalization of the use of Class A dwelling units for other than permanent residence purposes in certain dwellings constructed pursuant to plans filed after April 18, 1929 but prior to December 15, 1961, subject to certain conditions relating to past and present hotel occupancy and fire safety requirements. Occupancy of such dwelling units for other than permanent residence purposes would be permitted to continue for up to three years after the effective date of such subdivision if that occupancy existed on and after January 1, 2009, and if the dwelling units are registered with the enforcing agency and the owner submits certification by an architect or engineer that the dwelling complies with the fire safety requirements of such subdivision. The owner must obtain a certificate of occupancy authorizing use of the dwelling for other than permanent residence purposes within two years after such effective date. If no such certificate of occupancy is obtained within such 2-year period, the department may grant a third year with cause. The applicant may apply to the Board of Standards and Appeals for no more than two extensions of one year if circumstances beyond the applicant's control or hardship prevent obtaining a new certificate. All use of registered dwelling units for other than perma- nent residence purposes must thereafter cease.

Section 4 of the bill would amend subdivision 1 of Section 248 of the Multiple Dwelling Law and delete subdivision 16 of such section to clar- ify that a dwelling occupied as a class A dwelling pursuant to such section may only be occupied for permanent residence purposes in accord- ance with paragraph a of subdivision 8 of Section 4 of this Chapter, as amended by Section 1 of this bill.

Justification

The Multiple Dwelling Law and local Building, Fire and Housing Mainte- nance Codes establish stricter fire safety standards for dwellings such as hotels that rent rooms on a day to day (transient) basis than the standards for dwellings intended for month to month (permanent) resi- dence. There are substantial penalties for owners who use dwellings constructed for permanent occupancy (Class A) as illegal hotels. Howev-

er, the economic incentive for this unlawful and dangerous practice has increased, while it is easier than ever to advertise illegal hotel rooms for rent to tourists over the internet. This is especially so in New York City, which is attracting visitors and tourists from around the world in record numbers. In most cases tourists responding to such advertisements are unaware that the rooms are being offered in violation of the law. Not only does this practice offer unfair competition to legitimate hotels that have made substantial investments to comply with the law but it is unfair to the legitimate "permanent" occupants of such dwellings who must endure the inconvenience of hotel occupancy in their buildings and it decreases the supply of affordable permanent housing. It endangers both the legal and illegal occupants of the building because it does not comply with fire and safety codes for transient use.

Recently, law enforcement actions against illegal hotels have been hindered by challenges to the interpretation of "permanent residence" that enforcing agencies have relied on for decades. In City of New York v. 330 Continental, LLC. 60 AD.3d 226, 231 (1st Dept. 2009) the Court held that the Multiple Dwelling Law allows a minority of the units in building classified as a Class "A" Multiple Dwelling to be occupied for nonpermanent or transient occupancy. The court based this holding, in part, on the definition of Class "A" multiple dwelling, as set forth under Section 4(8)(a) of the Multiple Dwelling Law. In interpreting Section 4(8)(a) of the Multiple Dwelling Law, the court held that "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 permit- ted." The court concluded that no violation of the Class A certificate of occupancy would result from use of a minority of the units in one of the buildings for nonpermanent or transient occupancy.

It is impossible to enforce the law against illegal hotels if the law is interpreted in the manner compelled in this case. 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 that have been cited by defendants in enforcement proceedings as authority for the use of Class A dwellings as illegal transient hotels. The only "secondary" transient use of class A dwelling units allowed would be use by the permanent occupants - natural persons, not corporate entities - for house guests, boarders, roomers or lodgers living within the household of the permanent occupants or for circumstances such as the occasional pet or apartment "sitter" when the permanent Occupants are absent for personal reasons, such as vacation or for medical treat- ment.

There is a small number of Class A buildings, some constructed before April 1929 and some constructed before December 1961, currently operat- ing as hotels, which have a historic record of hotel use that precedes a zoning classification that prohibits such hotel use. These buildings would be allowed to convert to Class B occupancy and to continue to rent Class A dwelling units as hotel rooms during a two year conversion peri- od commencing on the effective date of this bill. Hotel use of Class A

dwelling units in such buildings during the conversion period would be subject to registration and stringent fire safety requirements and must cease at the end of such period unless the owner has obtained a Class B certificate of occupancy which the Department of Buildings could issue upon compliance with the building codes for transient occupancy.

There is a more than adequate supply of legitimate hotels with accommo- dations in all price ranges. Should the growth of tourism result in increased demand for hotel rooms in the future, commercially zoned areas of the city allow widespread opportunities for new legitimate hotels. The enactment of this legislation will protect public safety by assist- ing law enforcement efforts to curb the proliferation of illegal hotels.

Provisions of the bill are keyed to 1929 and 1961 because significant relevant changes in the Multiple Dwelling Law and New York City zoning were made at those times.

The City of New York supports this bill.

Legislative history

None.

Fiscal implications

None.

Effective date

Immediately.