From the Indypendent:
There is currently no law against illegal hotels in New York City, and the city is often limited to fining hotels for violating fire, occupancy and zoning codes in an effort to keeping these establishments in check. Building owners caught operating illegal hotels in buildings zoned for residential use are only fined $800, what Yarrow Willman-Cole, a tenant organizer with the Goddard Riverside SRO Project, calls a “cost of operation.”
“It’s a legal gray area and enforcement is happening specifically where there are safety concerns, but there are other issues that can be considered [in trying to shut illegal hotels down], such as zoning, permitted use in the certificate of occupancy and the fire code,” William-Cole said.
Hotel 99 is just one part of a complex web of illegal hotels throughout the city. According to the West Side Neighborhood Alliance, a nonprofit group that seeks to provide safe and affordable housing, as of 2009 there were 270 illegal hotels across Manhattan, Queens and Brooklyn.