A Report from HTC President Rich Maroko
By HTC President Rich Maroko
Ever since the COVID-19 crisis decimated the tourism industry and brought on mass layoffs in March 2020, our Union has been working every angle to get as many members back on the job as quickly as possible. It has been a complicated and difficult process, with many moving pieces. But at its core, it’s about the basic law of supply and demand: the (excessive) supply of hotel rooms in our market vs. the (very low) demand for hotel rooms by travelers over the last two years. When there are too many available rooms, hotel occupancy drops leading to 1) layoffs and 2) lower profits as hotels reduce room rates to attract more guests.
As many of you know, there has been an explosion of new hotel development in New York City over the last 17 years, causing an over-supply of hotel rooms —many poorly designed or in questionable locations This has been a threat to our members and to many of the communities where this development has occurred.
I am proud to inform you that in addition to all our Union’s other successful efforts to help members during this COVID disaster, we have finally achieved one of our most important long-term goals to address the problem of unregulated hotel development in New York City.
NEW YORK CITY FINALLY ENACTS SPECIAL PERMITS FOR NEW HOTELS
In most cities and towns in this country, zoning laws require developers to obtain permits to build major construction projects (like new hotels). There is a process that allows the community to voice its concerns about the project in public meetings and officials, who are accountable to the public, decide whether or not to grant the permit.
In New York City, it doesn’t work that way. Here, real estate development can seem like the Wild West in many parts of the City. If you’re rich enough to buy the land, the City’s zoning laws often allow buildings that are out of character and have significant community impacts.
Thirteen years ago, we set out to change that by advocating for “special permits” for new hotel development, as a way to ensure that new buildings actually benefit city residents including those who work in them.
With special permits, developers won’t be able to continue building unsustainable hotels without any input from New Yorkers. Instead, they will need to get input from the local Community Board, Borough Board, Borough President, and approval from the City Planning Commission and the City Council for any new hotel project. At nearly every step, everyday New Yorkers will have a chance to voice their concerns. The goal was that this process would reduce disruptive hotel development and result in only thoughtful and carefully planned projects.
While we had a series of successes in getting special permits for hotel development in 10 districts across the City during re-zonings, most of the City still permitted unchecked development. This has been an unimaginably hard fight because we have been up against the richest and most influential special interest in New York City – the real estate industry.
That’s now changed. On December 9, 2021, the New York City Council voted 46 to 1 to require special permits for new hotels City-wide and it became law.
WHY DO WE CARE ABOUT AN OVER-SUPPLY OF HOTEL ROOMS?
This problem matters to us right now because lower occupancy rates mean more layoffs. Even with occupancy hitting a high of 71% in November, nearly 15,000 of our members remained out of work. Having even more new, poorly planned hotels opening right now is exactly the kind of thing that will hurt us and slow down recalls.
At a time when our industry is still struggling, adding hundreds of new hotels will force room rates to drop even more. It’s a simple supply and demand problem: if there are too many available rooms but demand is the same, hotels have to lower prices to compete for guest reservations. This will inevitably lead to lay offs, as hotels will look to reduce labor costs to ensure solvency even with lower room rates. For the industry to maintain a healthy, successful recovery, we need to protect the market from becoming over-saturated.
But thinking longer-term, when our Industry-Wide Agreement expires in 2026, we want to be sitting across from an industry that is profitable. If hotels need to lower room rates for a prolonged period of time (and as a result make less money) it will impact how much money we can get towards wages, healthcare, retirement benefits, and other economic items in the contract. Our contract has had excellent wage increases and increased pension contributions because we had high density when we negotiated it. When employers balk at what we are asking for, we can point to all their competition who can afford it, giving us leverage.
Furthermore, it’s no secret that most of these new hotels are not providing good jobs. Decades ago, when there were very few non-union hotels in the City, non-union employers felt pressure to pay and treat workers decently enough. When more hotels pay poverty wages, it becomes harder for us to maintain our contract standards because our hotels are facing competitors who have dramatically lower labor costs.
This is why we work so hard to organize new hotels and why have invested so much energy in asking you to volunteer your time to our political program.
City-wide special permits was only one of the important political victories we won this winter to limit the insane pace of new hotel development.
A NEW LAW PASSED TO IMPROVE ENFORCEMENT AGAINST ILLEGAL HOTELS
In early December, the New York City Council and Mayor’s office also passed a new law requiring “hosts” on home sharing websites to register with the City. The law builds on over a decade’s worth of work to try and curb illegal hotels.
Back in 2010, New York State passed critical amendments to the Multiple Dwellings Act, which prohibited residents in buildings with 3 or more residential units from renting out their full apartment for less than 30 days. However, without any enforcement of this law, the number of illegal hotels continued to grow. So, we began working on getting New York City officials to enforce it. In 2012, then-City Council Speaker Christine Quinn got the City Council to impose a penalty of $25,000 for hosts that were caught violating the law. Next, we worked with Mayor Bill de Blasio to get the City to create (and fund) the Office of Special Enforcement, a team of city officials tasked with hunting down the worst violators. In 2018 we lobbied for legislation to make enforcement more efficient by requiring these websites to share data with the City and make it exponentially easier for the City to identify the worst users and now, as a final step, we lobbied to make hosts register proactively with the City.
MAYOR ADAMS PROPOSES TO CONVERT SUBSTANDARD HOTELS INTO AFFORDABLE HOUSING
Newly-elected Mayor Eric Adams has proposed a plan to convert as many as 25,000 of these substandard hotel rooms into affordable housing and housing for the City’s homeless. We support the plan, seeing it as one more way to combat this enormous problem.
IMAGINE WHERE WE WOULD BE WITHOUT THOSE POLITICAL VOLUNTEERS
Thousands of our members have volunteered their time canvassing, phone banking, and doing voter registration with our political program. This has made our Union well-known as one of the most powerful political forces in the City, in New Jersey and Upstate, always punching above our weight. There are still thousands of members who have never volunteered. Sometimes, our HEAT Organizers even hear this when they talk to members about coming out and volunteering: “We always see you when you want something!” What we want, political power, is for you. Imagine where we would be if we hadn’t been asking at all.
If there’s one lesson our whole membership should learn and never forget from this horrible pandemic, it is that building our Union’s political power is not only important for our Union, it is absolutely vital for every one of you and your families.
During this crisis, that power has paid off in ways we never could have anticipated. It’s why New York City passed a law requiring hotels to reopen or pay $500 a week to laid off workers. It’s why New York Governor Hochul found a quarter of a billion of dollars for relief checks for laid off hotel workers and for incentives for hotels to reopen. It’s why New Jersey put in place critical pandemic safety protections for hotel workers. It’s why both New Jersey and New York City passed laws providing job security in the event of hotel sales. And it’s why, on December 15th, we won special permits for hotel development in New York City. All these accomplishments only happened because of the work of the Union members who gave their time getting our allies elected to political office.
I am painfully aware that thousands of you are going on two years without work. While our Union can’t make this crisis end, I promise that we are doing absolutely everything we can to accelerate you going back to your jobs – everything from leveraging our political power as I’ve outlined above, to fighting employers who try to exploit this crisis to eliminate jobs, to rigorously enforcing the existing protections in our contracts to make sure that the hotels, casinos, and clubs recall every single employee necessary.
In Solidarity,
Rich Maroko
HTC President
