Thursday, September 4, 2008

To Make Ends Meet, More Risk Eviction To Run 'Hotels'

Beware of people in your building doing this.


To Make Ends Meet, More Risk Eviction To Run 'Hotels'
By JACLYN TROP, Special to the Sun | September 4, 2008
http://www.nysun.com/real-estate/to-make-ends-meet-more-risk-eviction-to-run-hotels/85183/

Guests staying at Josh Garcia's apartment in Williamsburg, Brooklyn, have flooded his bathroom and spilled red wine on his sheets, but he collects $125 a night by providing them with Wi-Fi access, fresh linens, and a key to his place.

Joshua Garcia

"I could get evicted, technically," Mr. Garcia, a 27-year-old engineer, said of the informal hotel he runs from his two-bedroom apartment. Without the boarders, though, he said he could not pay his $2,500 rent.

Capitalizing on a loose definition of "roommate," students, retirees, and people between jobs are exploiting the gray area in the city's housing code to supplement their income by renting out rooms to tourists. Most rooms range between $50 and $150 a night, a fraction of the $325.94 average daily hotel rate in June, according to the city's tourism board, NYC & Co. The rooms, available everywhere from tenements on the Lower East Side to luxury apartments on the Upper West Side, are advertised on craigslist.org and through Web domains.

While New York City does not have a law forbidding these temporary boarders, operating a de facto hotel out of an apartment "probably runs afoul" of the law, a real estate partner at the law firm Morrison & Foerster, Andrew Weiner, said.

"It's almost universal that conducting a quasi-hotel business in your apartment violates the terms of any residential lease," Mr. Weiner said. "Most leases prohibit daily rentals of units."

Fearing eviction, tenants take precautions to stay anonymous and instruct their guests to identify themselves to neighbors and landlords as "friends visiting from out of town."

"I try to fly under the radar," a retired computer consultant in Staten Island, who declined to provide his last name because of the possible illegality of these hotels, said. His Web site, newyorkroomwithaview.com, promises guests a harbor-facing bedroom in a safe neighborhood for $80 a night, or $90 for a couple.

NYC & Co. has not issued an official advisory warning tourists to avoid these unofficial hotels, but has been pressing the City Council to look into the issue, a vice president of travel and tourism public relations, Christopher Heywood, said.

"During these tough economic times, people may be trying to make a buck, but it's not legal and it's not appropriate," Mr. Heywood said. "At the end of the day, it's not smart."

New York City has 73,600 hotel rooms and is expected to add another 12,000 rooms by 2010. "It's not as if there's no room at the inn," he said.

The apartment-as-hotel trend appears to be a grassroots phenomenon, with both Mr. Garcia and the Staten Island retiree saying that they modeled their business plans after what they consider to be the original blueprint, staywithjon.com, run by a Manhattanite who declined to be interviewed for this article.

Although many leases do not have specific clauses prohibiting tenants from renting rooms in their apartments, most landlords are opposed to the practice, the director of government affairs for the Rent Stabilization Association, Frank Ricci, said. The trade group represents 25,000 New York City property owners and agents.

"They're profiteering off someone else's property, which they shouldn't be doing, but because it's tenants doing it, the government tends to turn a blind eye to it," Mr. Ricci said.

Meanwhile, even proprietors who don't have a spare bedroom to rent are thriving.

A 47-year-old Upper West Side resident who also declined to give her name said she is renting out an alcove above her closet as a "sleeping loft" for $100 a night to make ends meet while she is between jobs.

"One day I just looked around and thought, 'I can put a twin bed up there,'" she said. She said she hired someone off Craigslist to build a ladder to the loft, which she had previously used as storage.

"I can't really afford to live in Manhattan," she said of her $2,300 one-bedroom apartment near Central Park West. "I needed money."

Renting by the night is more lucrative than taking on a roommate, she said. She can make $1,500 each month by renting, but would only be able to charge a roommate $900 at most, she said.

Some proprietors said they had difficulty figuring out how to relate to guests, balancing an impulse to help and a responsibility to remain behind the scenes. A successful host must serve as a businessman, tour guide, and concierge, according to Mr. Garcia. "You have to be able to wear many hats," he said.

"It leaves a peculiar psychological impact," the Staten Island retiree said. "I have a tendency to treat them as personal guests, but I can't mother them because it's a professional relationship and they probably don't want to be mothered."

This includes erasing his presence from his own apartment. "I don't think they want to see my toothbrush in the bathroom, so I keep it on a shelf in the kitchen," he said.

Although opening their homes to strangers does raise concerns about safety, tenants said telephone screenings and Web searches weed out undesirable guests. It is important, however, to have a backup plan if they do not feel comfortable opening the door when their guests arrive.

"It hasn't happened yet," the Upper West Sider said, "but I'd tell them that there was an emergency and my mother was coming."