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A07848 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
  TITLE OF BILL: An act to amend the multiple dwelling law and the administrative code of the city of New York, in relation to clarifying certain provisions relating to occupancy of class A multiple dwellings   PURPOSE OR GENERAL IDEA OF BILL: To provide an exemption fora specific class of good actors that rent certain class A multiple dwelling units on a short-term basis. The law passed last year (I.. 2010, Ch. 225) was created in response to an on-going issue in New York City with single room occupancy (SRO) build- ings being used as illegal hotels. This bill does not serve these types of illegal hotels, but rather helps those legitimate individuals that use certain units as vacation rentals, thereby providing tax revenue and tourism dollars to the state and city. Further, the paradigm created by this proposal would further help to eliminate the type of illegal short- term use of class A units that the 2010 law sought.   SUMMARY OF SPECIFIC PROVISIONS: Section 1 of the bill amends section 4 of the multiple dwelling law, creating a use of a class A unit for short-term rental purposes, so long as such unit is not an SRO, contains a bathroom and a kitchen, has work- ing smoke detectors, and carries sufficient fire, hazard and liability insurance. The unit must also register with the City as a short-term rental unit. Section 2 of the bill amends section 4 of the multiple dwelling laws to add a new subdivision 15-a, that would define "short-term rental unit." These units will have to comply with the tax code, including sales and occupancy taxes. Section 3 of the bill would add a new article 7-D to the multiple dwell- ing laws, creating a short-term rental registration structure. Under the registration process, the individual would register with NYC for a fee of 5500 per unit, all of which would be dedicated to enforcement. By having units registered, the City would then be able to conduct audits, inspections, etc., to ensure that guests are behaving in a prudent manner. Any unit not in compliance with the standards above would face a fine of $1000 to $2000. Three separate violations will lead to complete revocation of the registration. Such individual would have the ability to appeal, satisfying any due process concerns. Note that any individual who rents a unit to transient guests for a total of less.than 30 days per calendar year would not have to register with NYC. This is intended to carve out those individuals that live in their unit year-round but occasionally rent it while away on vacation or business. Sections 4, 5 and 6 of the bill would amend the administrative code of the city of New York, adding the same language as in sections 1, 2 and 3 of the bill to section 27-2004 and a new article 2 to subchapter I of Chapter 2 of title 27, and thereby, maintaining uniformity.   JUSTIFICATION: The 2010 law was written to encompass a greater universe than was intended, as it rids New York City of a legitimate business model: short-term rental units. These units Provide tax income to New York and tourism dollars to the areas in which they are located. These units should not be confused with the small single room living spaces that are SROs. These units are not those constantly getting bad press which are often associated with decrepitude, poor maintenance, and numerous build- ing and health code violations. This legislation also does not seek to allow for large class building hotels while one can certainly find exam- ples of municipalities and a few states regulating short-term/vacation rentals, it is a hard pressed task to find those which completely ban the business model. This legislation would help those individuals and small businesses that are longer be able to operate because of the 2010 law.   PRIOR LEGISLATIVE HISTORY: None   FISCAL IMPLICATIONS: New revenue from sales tax. All costs to the City for enforcement would be paid for through the registration fees and associated penalties.   EFFECTIVE DATE: This act shall take effect immediately.
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