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As the NYC Council holds its first preliminary budget hearing on illegal hotels, NYC Council Members announced a comprehensive plan to strengthen the Mayor’s Office of Special Enforcement (OSE), including a significant increase in funding to two million dollars, and operational reforms for a more proactive and strategic approach to enforcement.

Even though illegal hotel companies have grown at an alarming pace, OSE’s budget and staff has significantly decreased since its creation in 2006. It has gone from nearly one million to less than $100,000 allocated in the FY 2016 preliminary budget, and staffing levels has also dropped during that time period. Full Release

To better equip OSE to handle the increase in illegal hotel activity and facilitate a more proactive approach to illegal hotel enforcement, Council Members propose the following reforms to be included in this year’s budget:

  1. Response Capacity. Increase OSE’s budget to $2 million from $96,426 proposed in the FY 2016 preliminary executive budget to enhance OSE’s and relevant agencies1 capacity to address complaints and illegal hotel violations through more responsive inspections and investigations.
  1. Pro-Active Capacity. Increase OSE’s staff to include additional attorneys and analysts to expand its capacity to commence litigation and mount a hands-on approach to track, target, and bring legal actions, and fine illegal hotel operators.
  1. Create greater transparency in the budget for OSE to ensure that the public is aware of how much the city is spending on combating illegal hotels, including clearly itemized funding and staff dedicated to illegal hotel enforcement separate from OSE’s work to combat counterfeiting and human trafficking

WHAT PROGRESSIVE CAUCUS MEMBERS SAY: 

“This plan will ensure that New York City has a smart enforcement framework to hold Airbnb and other illegal hotel operators accountable. Given the rapid growth of illegal hotels in our city – and the egregious violations of our laws – we must give the Office of Special Enforcement the tools it needs to protect everyday New Yorkers from forces taking away scarce affordable housing. Multiple independent data analyses have used public information to show how illegal Airbnb is. The city needs its own data expert to identify and aggressively target serial violators. The staffing level at OSE is good enough for reactive but not good enough for proactive enforcement,” said NYC Council Member Helen Rosenthal.

“There is a very clear line between what is legal and illegal when it comes to short term rentals. Our problem is that the majority of this rental market is illegal, and unregulated at that. Despite whatever claims Airbnb has made that resident hosts are the majority of rental listings, this is 100 percent false. Commercial users disproportionately control the share of rentals on market sites, making up 6 percent of site users while controlling 36 percent of units. Commercial operators will continue to violate and show blatant disregard for the law unless we designate more funding to OSE to crackdown on this issue,” said NYC Council Member Mark Levine.

“We need a coordinated effort to crack down on illegal hotel operators, especially those that operate multiple units and generate about 1/3 of the revenue on AirBnb. These companies and property managers are illegally displacing residents and contributing to the affordable housing crisis. We need to make sure that OSE has the resources it needs to address this problem effectively,” said Co-Chair, Council Member Antonio Reynoso.

“As the number of illegal hotels have surged, the concerns, particularly with regards to the quality of life, health and safety issues such operations pose to New Yorkers, have multiplied. Permanent residents of the buildings with units being rented out illegally have been unfairly subjected to a constant flow of strangers in hallways and surrounding apartments, without the basic security that any hotel would provide. They have had to sleep every night in a building that violates basic fire safety laws. This is unacceptable. But we at the Council today recognize that while the sheer proliferation of illegal hotels has continued, the resources that the Mayor’s Office of Special Enforcement (OSE) has been given have shrunken significantly, both with regards to budget and staff. It is imperative that this City enables OSE to feasibly enforce the law with regards to these operations; which I believe begins with increasing its funding allocation to two million dollars hand in hand with the creation of operational reforms,” said Council Member Corey Johnson.

IN THE NEWS

NY Post: Lawmakers want to triple task force for Airbnb crackdown 

NY Business Journal: Pols want NYC to create anti-Airbnb investigations team

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