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City Council Bill Places 2-Year Moratorium on Hotel-to-Condo Conversions

By Jeff Mays | May 15, 2015 3:06pm
 Celebrities and VIPs frequent the Trump SoHo Hotel on Spring Street in Hudson Square. The hotel launched a condo conversion project in 2007.
Celebrities and VIPs frequent the Trump SoHo Hotel on Spring Street in Hudson Square. The hotel launched a condo conversion project in 2007.
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DNAinfo/Andrea Swalec

NEW YORK CITY — The City Council voted Thursday to place a two-year moratorium on converting hotels into condominiums.

Under the bill, which passed by a vote of 42 to 8, the two year period would be used to study the effect of hotel closures on jobs and the local economy.

Bill sponsor Corey Johnson, a Manhattan Democrat, said good-paying jobs are lost when hotels are converted into mostly luxury condominiums.

"The reason this is important is that we are seeing the loss of good, solid middle class jobs," Johnson said in an interview.

Many of the hotel jobs pay well above New York City's median income.

Johnson said more than 1,000 hotel rooms have been converted into luxury condominiums over the last decade and more are under consideration such as the partial condo conversion at the Waldorf-Astoria Hotel.

Other hotels such as the Trump Soho launched earlier condominium conversion projects.

Under the law, hotels with more than 150 rooms would be placed under the moratorium. If a hotel owner is already in the process of undergoing a conversion or wants to start a conversion during the two year period, they could petition the Board of Standards and Appeals to get a variance under the plan.

"We are creating super duper luxury apartments for people who don't live here and use them as a pied-à-terre at the cost of middle class jobs," Johnson said.

The Hotel Association of New York City has come out strongly against the legislation, saying that it will have a "negative impact" on an important "pillar" of the city's economy.

"In addition to raising serious concerns about infringement of private property rights, the measure would create a disincentive for new hotel development and job creation by placing undue restrictions on one of the city’s most robust sectors," said Joseph Spinnato, president of the association.

"Any effort to stifle growth at a time when hotel sales and development have generated hundreds of millions in revenues for the city would be shortsighted and counterproductive," he added.

Mayor Bill de Blasio is expected to sign the legislation after his administration was able to negotiate changes to Johnson's original bill which sought a permanent ban on hotel to condominium conversions.

"We've arrived at changes we believe the administration can support," said de Blasio spokesman Wiley Norvell.