SRO Hotels Can Continue Renting to Tourists

Facts: The City of New York sued landlords of three SRO apartment hotels to stop them from renting units for temporary occupancy of less than 30 days to tourists and others. The buildings, all on the Upper West Side, each contained about 200 units. Landlords advertised the units for short-term rentals on travel-oriented Web sites. The city claimed that this transient occupancy violated the buildings’ certificates of occupancy (C of Os) and the city’s zoning law, and that this created a public nuisance. The city asked the court to halt landlords from taking any new reservations for short-term rentals while the case was pending. The court ruled for the city. Landlords appealed, claiming that the city didn’t prove it was likely to win the case and that the court shouldn’t have barred landlords from offering short-term rentals while the case was pending.

Court: Landlords win. The city hadn’t shown a clear right to the drastic remedy sought, and therefore wasn’t entitled to a temporary ban against new short-term rentals pending a final ruling on the case. There was no requirement under either the city’s zoning law or the C of Os that the buildings be used exclusively for permanent occupancy. The buildings were located in a general residence zoning district. The zoning law defined an apartment hotel as a building whose units were used primarily for permanent occupancy. This indicated that a secondary use of the buildings was permitted. The buildings’ C of Os all were for class A multiple dwellings. The law defined a multiple dwelling as one “occupied, as a rule, for permanent residence purposes.” This also indicated that a different, secondary use was permitted. The Multiple Dwelling Law and the city’s Zoning Resolution also were vague. Neither of them defined “transient” or “permanent.” And the city hadn’t shown that most of the units in these buildings were rented for short-term use. So there was probably no violation either of the zoning law or the C of Os from the use of a minority of the units for transient occupancy. And even if all transient occupancy in these buildings ultimately was ruled unlawful, it wasn’t clear where to draw the line while the case was pending.

City of New York v. 330 Continental LLC: NYLJ, 2/4/09, p. 27, col. 3 (App. Div. 1 Dept.; Andrias, JP, Friedman, Buckley, Catterson, Acosta, JJ)