NYC moves forward with plan for special hotel permits

City Planning will host a hearing Jan. 22

City planning chairperson Marisa Lago (iStock; Global Philanthropy Forum)
City planning chairperson Marisa Lago (iStock; Global Philanthropy Forum)

The city is moving forward with plans to require special permits for all new hotels in an effort to curb projects that cause “conflicts or create nuisances.”

The Department of City Planning on Monday released its long-awaited proposal for requiring special permits for new hotels and expansions throughout the city. It would apply to all zoning districts where hotel construction is permitted as-of-right, and would take the place of special permits already required in Midtown East, the Garment District and light manufacturing zones. No new hotels have been built in light manufacturing zones since 2018, when the city started requiring permits in those areas.

Map via NYC Planning

Map via NYC Planning

The draft scope of work acknowledges that the hospitality industry has taken a hit due to the pandemic. The city estimates that between January and September 2020, 135 hotels and 39,244 rooms have closed, representing declines of 20 and 31 percent, respectively.

“Although the COVID-19 pandemic caused an abrupt and precipitous drop in hotel occupancy and construction, visitation is expected to return by 2025 along with a demand for new hotels,” the draft scope of work states. “When this occurs, a more uniform zoning framework for new hotels citywide could support more predictable development and limit the extent to which a hotel use may impair the future use or development of the surrounding area.”

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The agency notes that while hotel demand is still largely driven by Manhattan, development in the other boroughs has grown at a much quicker pace. The special permit will give City Planning the opportunity to determine the “appropriateness of hotel development in commercial and mixed-use districts,” according to the proposal.

According to the Department of Buildings, there were 30,331 hotel rooms either under construction or in the late planning stages as of October. Those rooms, as well as an estimated 32,115 more that could be constructed through 2035, could be affected by the special permit depending on what stage of construction they are in.

In November, the de Blasio administration quietly withdrew its application to require special permits in Union Square, saying that it would instead focus on hotel development in a citywide context. Developers have spoken out against the special permit, with some filing lawsuits to block district-level restrictions.

“It is unfathomable that the Mayor would put forward a proposal to make it virtually impossible to build new hotels and bring back good jobs for New Yorkers,” Real Estate Board of New York President Jim Whelan said in a statement. “At a time when the Mayor should be focused on driving a strong and equitable recovery, he is advancing a policy that will make it even more difficult for the hospitality industry to recover.”