Illegal hotels thrive as city cracks down

April 15, 2011 01:26PM

New York real estate brokers say demand for short-term leases has been intensifying recently, but a new law could soon infringe on their success. They blame the increased demand on a curious combination of economic vitality and caution. Employers are starting to hire again, so people are moving to the city and need short-term housing while they look for a permanent home, Gary Malin, president of Citi Habitats, told the New York Times. Simultaneously, employers and tourists are seeking ways to avoid hotel expenses. However, a state law scheduled to take effect next month will prohibit rentals of fewer than 30 days. Supporters of the bill, including the hotel industry and Mayor Michael Bloomberg, claim that it will assist in the crackdown on illegal hotels and preserve the quality of life and safety for permanent residents of apartment buildings. The bill is in response to failed city efforts to shutdown the operations of illegal hotels, including Dexter House on the Upper West Side, as The Real Deal reported last year. Still, some short-term rental businesses, such as and, evidently do not see the law as a significant threat and are still packed with New York properties renting by the night or week and available well after the law is take effect.

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