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De Blasio Weighs Plan To Enforce Special Permits For Hotel Development

New York City Mayor Bill de Blasio in 2016

New York City Mayor Bill de Blasio is pushing a plan that would require developers to seek a special permit to build hotels, a move that could significantly slow down new hotels and possibly benefit hotel unions.

A spokesperson for the city’s planning department told Crain’s New York Business  the administration would continue to look for ways to “implement a citywide hotel permit.” De Blasio has asked the department to draft a proposal for the permits, which would change land use policy and require new hotel projects to go through the onerous land use review process.

The rules, if enacted, would make hotels one of the most restricted use groups in the city, according to Crain's.

“If the city is actually contemplating a ban on hotels, it would be a devastating blow to our remarkably resilient tourist economy, to the many service industries that are linked to hotels and to multiple neighborhoods,” Mitchell Korbey, a land use attorney at Herrick Feinstein, told Crain’s. “There is no land use rationale and absolutely no zoning or public policy justification for this.”

De Blasio’s moves come a little over two months after the Hotel Trades Council came out in support of his presidential campaign. The HTC has said it wants to put permits in place, but the city officials said the administration was already examining ways to pursue permits before the support was announced.

New York City is expecting 67 million tourists this year, according to NYC & Co., even higher than last year’s high of 63 million. The hotel industry has struggled with an oversupply of rooms in recent years, as well as competition from Airbnb. However, many believe the sector is turning around and revenue per available room will continue to increase. 

The hotel industry successfully lobbied to city to enact restrictions on home-sharing businesses. Because the special permits would require hotel developments to go before City Council, development advocates told Crain's that could allow the HTC to pressure council members to force union-friendly deals on hotel builders.