New York City has reached a $1.2 million settlement with a company that was alleged to have turned apartments in Hell’s Kitchen residential buildings into illegal short-term rentals.
The settlement, filed in New York’s Supreme Court on Monday and first reported by Gothamist, relates to 67 residential units across 29 buildings in New York. The rentals took place between 2019 and 2022, and included 11 buildings on W49th Street between 8/9th Avenue. The court papers stated that the buildings were “all multiple dwellings with Class A apartments that can only legally be advertised and used as permanent residences, for 30 consecutive days or more.”
The settlement was reached with LuxUrban Hotels Inc, which formerly traded as CorpHousing Inc and Sobeny Partners Inc. The settlement of $1.2 million will be paid in installments from now until November 2026. The court papers stated that it was in relation to “4,300 illegal short-term stays, which generated roughly $3.9 million in revenue.” The illegal rentals took place in apartments in 308, 318, 320, 324, 326, 328, 330, 334, 336, 338 and 340 W49th Street in Hell’s Kitchen and at other locations around New York including Chelsea, the Upper West Side and Cobble Hill, Brooklyn.
The financial settlement came about after action from the Mayor’s Office of Special Enforcement (OSE) which included obtaining data from Booking.com and Expedia. In the lawsuit submitted by the OSE at the time of the settlement, they said the subletting caused “serious safety risks for the transient occupants of those units, significant security risks in buildings not equipped to handle the security problems associated with transient occupancy, and a degradation in the quality and comfort of the surrounding residents and neighbors, created by noise, filth and the excessive traffic of unknown and constantly changing individuals entering their places of abode.”
According to court papers, the settlement was made “in order to avoid further delay and expense of litigation, without admitting any wrongdoing.” It was also stated that the defendants contacted OSE in 2021 in an effort to come into compliance and agree to remove their short-term rental advertisements from Booking.com and Expedia, and agreed to “cease unlawful advertising and occupancy and not thereafter resume.”
The hotel company, LuxUrban did not respond to a request for comment on the settlement.
What a puny fine for such egregious behavior – and it doesn’t have to be paid in full until 2026.
Kathleen is totally right on the mark. Plus, this company has been in business since I was Man. Plaza Tenant President in 2001-20010. I was active with block associations who complained at the time.
At any rate, when you see the profit made from illegal air bnb’s why not make them pay the entire $3.9 Million profit as a “fine”? The fine isn’t even half the illegal gain.
White collar crime punishments in this country is always such a joke. They should have been fine 5 million, at least. To make them think twice before doing it again. Making more than 2 million dollars from this crime will only inspire them to do it again.
Same old, same old story. NYC is so corrupt it is hard to raise an eyebrow anymore, in shock. The corruption flows from top to bottom.
My building on this block has been overrun by drug dealers, drug users, and squatters. Now maybe we know why. Opening up the building to multiple strangers creates multiple opportunities. Nieuw Amsterdam Properties is the owner and it would be interesting to see what sort of relationship they have with these companies.
Exactly 💯
I live on this block too !
Trying to negotiate this expense rent with Julie from New Amsterdam Properties… that’s why Phil Froom left ?
This is still profitable and does not deter crime. Just makes it more competitive and slightly more risky. I’d rob the bank again if i only lost a million and did not have to admit wrong doing. In fact I would rob the bank on the daily, duh
This never happened when we had our previous building manager, who managed the entire block and other properties, of 16 years who was forced to deal with their illegal activities and risk his own life protecting us. The new manager they replaced him with is not on site and has left us to rot. The company made a hefty mistake letting him go. Our safety and security and peaceful quality of life left the day he did. Do not rent from this company. Stay away. They will not let us out of our leases and forcing us to live in dangerous and unhealthy living conditions.