New York City has sued a real estate management company for running an illegal hotel operation, via Airbnb and other online sites, in rent-stabilized apartment buildings in Hell's Kitchen. A longtime tenant told Gothamist that when the landlord started to illegally convert apartments, "Our family's hell began."
The Mayor’s Office of Special Enforcement, the division of the city government charged with investigating illegal hotel offenders, claims that Big Apple Management, LLC have turned at least seven walk-up buildings into illegal hotels, "operat[ing] for years despite persistent complaints, enforcement and fines against the operation," a press release said.
It has been illegal for NYC apartments to be rented out in their entirety for stays shorter than 30 days since 2016.
Big Apple owns a number of rent-stabilized buildings on West 47th Street between 8th and 9th Avenue. The OSE says that there have been "at least 50 illegal hotel complaints since 2011... 150 building and fire violations, four building and fire criminal summonses, and five advertising summonses," there's also $120,000 in penalties for various violations, $90,000 of which hasn't been paid yet.
Christopher LeBron, a 33-year-old third-generation native New Yorker, was raised in one of the buildings, 321 West 47th Street. After graduating from Princeton in 1978, his mother, who grew up in the Marcy Projects and on West 47th Street, jumped at the chance to be one of the first tenants of the newly rent-stabilized 321. She also helped her mother get an apartment in sister building 323 West 47th Street. LeBron said his family had a good relationship with the original landlord, but in the 1980s, "when the New York real estate market boomed," that landlord "got out."
Big Apple took over in the mid-to-late 1980s, and, at one point, the tenants banded together and had a rent strike over "dereliction of maintenance and repair of the building." In the 1990s, conditions improved, and LeBron recalled that tenants knew each other and looked out for one another, "It was a mix of actors, artists, and hair stylists... It was blue-collar families, and white-collar ones who couldn’t afford other parts of Manhattan." But, around the time of the dot com bubble around 1999-2000, Big Apple started to take advantage of the market, altering apartments to maximize profit.
"They added a second bathroom and a rooftop bedroom addendum without permits," LeBron said. Pointing out that these were older buildings, LeBron explained that the plumbing couldn't handle substandard renovations: "Our family’s hell began. We suffered flooding, cracks in walls, delays in response, and rodent problems—rats and roaches."
The longtime rent-stabilized tenants would pool their resources to make fixes, but in the late 2000s, they started noticing that the neighbors were no longer younger college-aged graduates renting apartments—they were now strangers, toting their "suitcases in and out en masse," LeBron said.
The guests have come from "all corners of the world, all corners of the country," LeBron revealed. "They have duffle bags or rolling suitcases. They’ll come for a week, at a set time, Sundays in the middle of the afternoon or Monday late at night, because there are cheaper flights inbound at JFK Airport."
Even though some instructions given to the illegal hotel guests tell them not to speak to any strangers, even building residents, LeBron and other tenants learned from the guests that they were in fact tourists. In one extreme case, LeBron said, "One of the apartments was being used by the transient prostitutes... There were unwanted visitors at all hours of the day." The male prostitution ring managed to stay because of the 30-day squatting law, until the marshals raided the apartment, LeBron said.
Big Apple was illegally renting out five of the apartments in LeBron's building as hotel rooms, making an estimated $4,000-5,000/week per apartment (apartments were converted from two-bedrooms to four-bedrooms, to fit six to 10 guests). Meanwhile, the company continued to ignore LeBron's and the residents' needs.
In one of the illegal conversions, a bathroom that was created in a third floor apartment caused multiple floods affecting the master bedrooms above and below it in early 2017. "The super immediately went up to take care of the guest in 3A, while we had to wait a very long time," LeBron said. "We took on a lot of damage, floors, mold, dry wall needed to be replaced, personal property, artwork and clothing needed to be replaced." After many months, Big Apple made some fixes but left up unpainted dry wall.
LeBron, who is the president of the West 47th Street Tenants Association, is thrilled by news of the lawsuit, plus the judge's decision to issue a temporary restraining order that prevents Big Apple from continuing the illegal hotel side hustle. He thinks the city needs to do more to make New York City affordable, calling the real estate market "hyper-inflated."
"The rent-stabilized apartment system is critical for millennials and Gen Y to enjoy, given the amount of student debt they're faced with," he said. "I don’t think NYC is going to be able to survive in terms of providing a workforce for tech companies, banks, and other big industries" the city is trying to attract.
"We need more rent-stabilized housing. If it were possible, I would love for these illegal hotels to be turn back into rent-stabilized stock," LeBron added.
In a statement about the lawsuit, Christian Klossner, Executive Director of the Mayor's Office of Special Enforcement said, "This is about protecting housing meant for New Yorkers, and preserving a sense of safety and community in a residential neighborhood. The message of this action is clear—if landlords turn a blind eye to rampant illegal short-term rentals, then we will see them in court."