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Article posted Apr 30 2012, 10:23 AM Category: Economy Source: Douglas French Print

Stopping Business in the Big Apple

By Douglas French

Today's New York Times is a treasure trove of stories of government standing in the way of commerce.  Anyone visiting the Big Apple knows hotel lodging costs an arm and a leg.  Some enterprising property owners in the city and outer boroughs have stepped in to fill consumer demand and make some money in the process.  And with the aid of internet search engines and websites devoted to helping travelers find cheap rooms, demand has been brisk.

Turns out this sort of private contract is illegal.  A new law made it unlawful to rent out apartments in residential buildings for under 30 days.

Elizabeth Harris reports,
Armed with a new state law, the city has spent the past year cracking down on the growing industry of short-term rentals; since the law took effect last May, nearly 1,900 notices of violation have been issued at hundreds of residential buildings.
"The issue of illegal hotels is one that's been a mounting problem in the city over the last several years," said John Feinblatt, chief policy adviser to the mayor, pointing to a tenfold increase in complaints about them since 2006, to about 1,000 last year.

Upon inspection, this sort of rogue hoteliary has been going on citywide, "many of them were hiding in plain sight."

Evidently, overnight lodgers are considered a problem in the city that never sleeps.

Vinessa Milando has operated a Bed & Breakfast on East 58th Street for 14 years. She was visited by inspectors and subsequently, "received notices of violations stating that the building had an incorrect certificate of occupancy and inadequate fire safety measures for rooms to be rented on a short-term basis. She was fined nearly $10,000, and a judge ruled in the city's favor."

Meanwhile it's a game of inches for Mohammad Sikder who is trying to secure a permit to operate a newsstand across from the Port Authority Bus Terminal on Eighth Avenue.  Mr. Sikder has been turned down eight times.  Twice for a spot in Times square, once for a spot in the East Village and five times on Eighth Avenue site.

Sikder's site plan was turned down twice with the city claiming the plans were not accurate.  The city requires that a newsstand allow clearance of 9 feet 6 inches on the sidewalk.  After Sikder submitted two more requests, the city contended each time that clearance would only be 9 feet 4 inches per his plan.

Sikder's architect then hired a licensed surveyor who found that the clearance, in his expert measuring opinion, was indeed the required 9 feet 6 and re-submitted the plans. This time, the city did actually give an inch, but turned down the request because the pathway was too narrow by a single inch.

Times reporter Cara Buckley, an admitted amateur measurer, found that the pathway was indeed 9 feet 6.

Mere mortals would give up at this point.  After all, of the 76 applications for newsstand permits received last year, only nine were approved by NYC bureaucrats.  And this is just the first step in the approval process.  As Buckley describes,
The application process for would-be vendors is dizzying. Applicants must notify nearby buildings and submit site plans and pay $269 to the Department of Consumer Affairs, which forwards the application to the local Community Board and the Transportation Department, which measures whether there is enough space and gauges congestion.

If the Transportation Department approves, the application goes to the Design Commission or to the Landmark Preservation Committee, either of which can turn the applicant down. If the application survives all of that, the vendor pays $30,000 -- usually financed through loans -- to Cemusa, the company hired by the city to replace all newsstands. However they do not own or rent the kiosks; they have a license to do business there for two years at a time.
But the cabby who supports a family of six that live in a one-bedroom apartment, is made of stronger stuff.  He has applied again.

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