NYT: Tenants Losing to the Tourists, Room by Room

The New York Times
January 22, 2006

Tenants Losing to the Tourists, Room by Room
By JANNY SCOTT

Strange things started happening in Vivian Riffelmacher's building in
the summer of 2004. It was hard to miss the foreigners in the lobby,
the luggage in the elevator, the bunk beds on the ground floor. To Ms.
Riffelmacher, who has spent nine years in the building, on the Upper
West Side of Manhattan, her home seemed to be morphing into a hotel.

Ms. Riffelmacher was not the only one left with that impression.
Irritated residents began rounding up evidence, then fired it off to
the city's Department of Buildings. Now the city is suing Ms.
Riffelmacher's landlord over what it says is the illegal conversion of
moderately priced permanent housing for New Yorkers into something more
lucrative: rooms for tourists.

As the city faces a serious shortage of low-cost housing for its own
residents, building owners are turning existing units into hotel rooms,
hostels and corporate housing for out-of-towners. The trend is most
noticeable in Manhattan neighborhoods where the supply of low-cost
units was already dwindling and the demand for tourist rooms has shot
up.

There are no reliable estimates of how many units of permanent housing
are being used by short-term visitors. Housing advocates say they know
of dozens of buildings where they estimate hundreds of units have been
illegally converted.

"I would say in the last two years it's become like wildfire," said Bob
Kalin, a tenant organizer for Housing Conservation Coordinators, an
advocacy group.

The conversions often violate many city codes, officials say. Some
buildings are barred from operating as hotels because they are in areas
zoned as residential. Many are also prohibited from taking short-term
tenants. To do so legally, they would have to apply to the city for a
new certificate of occupancy, a process that is not simple, speedy or
cheap.

In the meantime, illegal conversions can be hard to prove, city
officials say. Violations fall under the jurisdictions of multiple city
agencies, and inspectors can have a hard time getting into units. While
buildings openly advertise budget hotel rooms on the Internet, the only
building that the city has taken to court recently is the one where Ms.
Riffelmacher lives, in a 10-by-12-foot room for $450 a month.

"Unfortunately, this is happening at a time when we need permanent
housing very badly," said Deborah Rand, deputy general counsel for
litigation for the city's Department of Housing Preservation and
Development and the lawyer on one earlier case. "But people can make a
lot more money from transient use than by using a room as a permanent
residence."

Housing advocacy groups have compiled lists of dozens of buildings they
say tenants have told them are being illegally converted. On the online
classified advertising service Craigslist, there are dozens of
apartments for rent by short-term visitors. And Jennifer Givner, a
spokeswoman for the city's Department of Buildings, said her agency was
investigating nine buildings it had received complaints about.

In the Chelsea and Clinton neighborhoods in Manhattan, Housing
Conservation Coordinators has counted three dozen buildings that it
believes are being used at least in part as hotels, youth hostels,
vacation rentals or temporary quarters for corporate employees. In
some, the group believes, only a handful of long-term tenants remain.

On the Upper West Side, Terry Poe, a supervisor at the Goddard
Riverside West Side S.R.O. Law Project, said his agency was aware of at
least eight buildings that it believed were being used illegally at
least in part as hotels. They are single-room-occupancy buildings, a
disappearing breed that is one of the last remaining sources of
low-cost housing on the gentrified Upper West Side, and one that is
especially vulnerable in a strong real estate market. S.R.O. quarters
are roughly defined by the lack of either a private bath or a kitchen.

On tourism Web sites, including hostelz.com and tripadvisor.com, one
can find listings for buildings like the Dexter House, the S.R.O. where
Ms. Riffelmacher lives, on West 86th Street near Riverside Drive.
"Dexter House Hostel," one listing reads. The description states, among
other things, "Dorm rooms sleep six to eight people and are
air-conditioned in the summer."

According to tenants in the building and a lawyer for the Dexter House,
the building has long had some short-term hotel guests. But Ms.
Riffelmacher and other tenants say that after it was sold several years
ago, the new owners began eviction proceedings against some long-term
tenants, altered the building and started taking in more tourists.

Lisa Beth MacKinlay, who has lived in the Dexter House for 10 years,
said the lobby was sometimes so crowded with tourists and luggage that
it was hard to get through. Vickie Labosky, a yoga teacher and a
resident since 1991, said the building's management put multiple bunk
beds in rooms, then filled them with tourists who overwhelmed the
communal bathrooms.

In June, the city sued the owner of the building, Jay Wartski, in State
Supreme Court to stop him from using it as a transient hotel. The suit
accused him of illegally modifying the building without the city's
permission, of violating the terms of the certificate of occupancy and
of violating the city's zoning rules by operating a hotel in a
residential zone.

The suit said the owners, Mr. Wartski and Robert Goicochea, had
violated a city law barring S.R.O. owners from removing units or making
alterations without first certifying that no long-term tenants had been
harassed. It also accused them of violating a law forbidding S.R.O.
units to be rented for less than one week.

Todd Nahins, a lawyer representing what he called the Dexter Hotel,
said in an interview that his clients had done nothing wrong. He said
the building had been used in part as a transient hotel at least since
the 1940's. He said S.R.O. owners were unable to keep up with rising
expenses, like fuel bills and taxes, because of rent regulations. As a
result, he said, they may depend on taking in weekly guests.

Mr. Nahins said his clients simply wanted to renovate the bathrooms in
the Dexter. They hoped to get a higher rent for rooms rented by the
week. "At no point were we displacing any tenants," Mr. Nahins said. He
added, "Believe me, this is not about putting out permanent tenants."

Mr. Nahins also said the zoning law allows his clients to rent rooms by
the week. He said the business from shorter-term visitors "subsidizes
the rest of the building."

Gabriel Taussig, chief of the administrative law division in the city's
Law Department, said in an interview that the owners of buildings like
the Dexter House, intended for long-term occupancy, cannot simply start
using them for short-term stays without first addressing "a whole host
of issues involved, including building code safety issues."

For example, different fire-protection and safety requirements apply to
buildings with short-term occupants, who will most likely be less
familiar with a building's layout. Requirements for fire alarms, exit
signs and emergency lights are more stringent in buildings with
transient occupancy, said James Colgate, executive architect at the
Department of Buildings.

In Chelsea and Clinton, Mr. Kalin of Housing Conservation Coordinators
said his organization had found different types of illegal conversions:
rent-regulated apartment buildings being run largely as hotels,
rent-regulated apartments being used as short-term vacation rentals,
residential apartments being chopped up into single rooms for European
students, residential buildings being leased commercially for use as
corporate housing.

"This is a neighborhood that has tremendous gentrification going on" he
said. "It's in transition and buildings are changing hands all the
time. So, while you're getting out of your building and emptying it
down, you do these temporary things to squeeze the last buck out of it
before you go."

Prices for converted rooms generally range from $40 a night for
hostel-style accommodations to $150 a night for a room with a private
bath.

John Raskin, a community organizer with Housing Conservation
Coordinators, said that complaints about illegal conversions were
bounced from one city agency to another and that there was little
coordination.

To address that problem, housing advocates and local politicians like
City Councilwoman Gale A. Brewer, who represents the Upper West Side
and has brought the issue to the city's attention, have begun
organizing an interagency task force to tackle the problem of illegal
conversions and consider legislative solutions.

"Some of what is at stake in this is a stable affordable housing stock
that people in our neighborhood depend upon," Mr. Raskin said. "I think
this sort of illegal use threatens our viability as a residential
community. It merges us inappropriately into the theater district and
the office district when we've been working for years to keep our
neighborhood as a residential community."