New York City Wins Permanent Injunction to Prevent Illegal Short-Term Rental Activity at More Than 220 Housing Units in Manhattan Building

August 10, 2020

Illegal hotel operator at Imperial Court Hotel on Upper West Side also to pay $290,000 in fines and penalties.

NEW YORK—The Mayor’s Office of Special Enforcement (OSE) secured a settlement in its lawsuit against an illegal hotel, whose operators agreed to stop using the property for any future short-term rental activity as well as pay $290,000 in fines and penalties.

The Imperial Court Hotel, located at 307 West 79 St., was the subject of a City’s lawsuit after OSE found as many as 99 units of vital SRO housing were removed from the housing market and being used as hotel rooms.

“At a time of heightened concern about safe affordable housing and tenants’ rights, the decision marks an important victory for all New Yorkers,” said OSE Executive Director Christian Klossner. “The Office of Special Enforcement is proud to have partnered with tenants to challenge those who take housing off the market and expose tenants to dangerous and disruptive conditions.”

The City had received numerous complaints from tenants, both through 311 and from the office of Assemblymember Linda Rosenthal. Multiple inspections by OSE revealed dozens of the building’s 227 units being used as hotel rooms, as many as 99 at one inspection, in direct defiance of a 2016 court ruling clarifying that the building was only allowed to be used for permanent occupancy.

After the inspections, five tenants represented by Goddard Riverside Law Project and Take Root Justice (formerly the Urban Justice Center) sued the building, alleging tenant harassment and nuisance, and obtained a temporary restraining order halting new reservations. OSE joined in the lawsuit, asserting additional claims and seeking penalties for the building’s ongoing transient use.

“The tenants were happy to partner with the City in their lawsuit against the Imperial Court to stop the landlord’s longstanding practice of short-term rentals to tourists,” said Dan Evans, Staff Attorney at Goddard Riverside Law Project. “It’s an excellent example of the power of tenant organizing working hand in hand with legal advocacy. The tenants believe this sends a strong message to illegal hotel operators across the city. If you choose to flout the law, you will be held accountable.”

“We applaud the tenants at Imperial Court for coming together to advocate for their rights under difficult circumstances,” said Jane Li, Staff Attorney at TakeRoot Justice. “We commend the city for taking an aggressive stance against landlords that engage in illegal rentals. New York City must actively protect affordable housing and ensure that long-term residents can enjoy their homes without being subject to nuisances caused by short-term renters.”

“This settlement is a testament to the relentlessness and fearlessness of the residents of the Grand Imperial Court, who refused to be bullied by Michael Edelstein and fought tooth and nail to protect their homes. It’s also a warning to bad landlords citywide that the consequences for illegal hotel activity will be swift and severe. After I checked into the Imperial Court in 2007 to prove that Edelstein was running the building as an illegal hotel, I worked closely with the tenants and the Goddard Riverside Law Project to build a case and stop Edelstein’s illegal activity once and for all. Every unit Michael Edelstein made available to illegal hotel guests is a potential home that must now be made available as permanent housing for low-income New Yorkers. I will not stop until every single illegally deregulated unit is returned to the affordable housing unit,” said Assemblymember Linda B. Rosenthal.

“This is a decisive victory over illegal hotels, which rob our city of affordable housing at a time when we desperately need more of it. I thank the Mayor's Office of Special Enforcement for taking strong action in this case, and will proudly work with them to protect and preserve our neighborhoods,” said City Council Speaker Corey Johnson.

“This settlement is a victory for all of us who have long advocated for access to high quality, safe and affordable housing,” said State Senator Brian Kavanagh, chair of the Senate Housing Committee. “I applaud the Mayor’s Office of Special Enforcement for its efforts to put a stop to the use of illegal hotels. Hopefully this settlement sends a message to others who might choose to ignore these laws that such behavior will not be tolerated.”

“Illegal hotels anywhere threaten affordable housing everywhere,” said State Senator Brad Hoylman. “Our city is facing an affordability crisis that is exacerbated by bad actors flouting short-term rental laws. The Office of Special Enforcement is doing important work to crack down on illegal hotels, and I’m thankful for their latest efforts to shut down a persistent offender.”

“Once again the owners of the Imperial Court Hotel have been taken before a judge, and once again the City has prevailed in upholding the law and protecting affordable housing for some of the lowest-income New Yorkers,” said State Senator Liz Krueger. “Now more than ever it is vital that we keep illegal short-term rentals out of our city so that those apartments remain available for New Yorkers to rent. I thank the Mayor’s Office of Special Enforcement for their persistence in pursuing this case.”

“I applaud the Mayor’s Office of Special Enforcement for their work to eliminate illegal short term rentals, said Assemblymember Harvey Epstein. “The settlement is great news in the fight to retain affordable housing and protect our homes.”

"For over ten years, the city, and OSE in particular, has worked consistently to end the illegal hotel activity and return the units back to affordable single room housing at the Imperial Court Hotel," said Assemblymember Richard Gottfried, one of the authors of the 2010 law.

“The Coalition Against Illegal Hotels applauds the Mayor’s Office for its continued and ongoing preservation of affordable housing in NYC, especially during this pandemic,” said Tom Cayler of the of the Coalition Against Illegal Hotels.” The Imperial Court Hotel has been a bad actor for years. Only through persistence and dedication by the Mayor’s Office is this malefactor being brought back into legal operation as an SRO providing desperately needed affordable housing for New Yorkers.”

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About the Mayor's Office of Special Enforcement (OSE)
The Mayor's Office of Special Enforcement (OSE) promotes public safety, community, livability, housing affordability, and other issues concerning those who live in or visit New York City. The multi-agency team provides innovative, solutions-oriented enforcement against harmful illegal industries and activities that one agency alone cannot address. Our dedicated and highly qualified law enforcement professionals, inspectors, investigators, and attorneys promote public safety through enforcement and by proactively fostering community relationships through educational outreach. For more information, visit www.nyc.gov/ose