THE CITY OF NEW YORK

OFFICE OF THE MAYOR

NEW YORK, N.Y. 10007

June 21, 2010

A.5667-C by M. of A. Lopez

AN ACT to amend the multiple dwelling law in relation

to interim multiple dwellings in a city of more than one
million persons and to amend chapter 349 of the laws of
1982, amending the multiple dwelling law relating to
legalization of interim multiple dwellings in cities over
one million, in relation to extending the effectiveness of
such chapter.

DISAPPROVAL RECOMMENDED

Hon. David Paterson

Governor of the State of New York
Executive Chamber
Albany, New York 12224

Dear Governor Paterson:

The above-referenced bill is now before you for executive action.

This bill would expand coverage of the Loft Law to buildings or portions of buildings meant for
manufacturing or commercial use that have been illegally occupied for residential purposes by two or more families
for a consecutive twelve-month period between January 1, 2008 and December 31, 2009. The number and
locations of these buildings are not specified in the legislation or supporting materials and are, in fact, unknown; by
contrast, the original Loft Law was enacted after an extensive survey and examination of the affected buildings.

While the bill laudably attempts to address the fact of residential encroachment into current and former
industrial zones, it fails to create a minimum standard for safety below which illegal conversions should not, in any
circumstances, be sanctioned. Basic safety, quality-of-life and environmental compatibility will not be assured. No
additional buildings should be granted the protections of the Loft Law unless they do not involve incompatible
manufacturing or industrial uses, have operable wet sprinklers, and provide at least one direct egress and a window
in each covered unit.

As written, this bill would hurt our economy by driving manufacturers out of New York City, reducing the
number of good-paying jobs available to New Yorkers at precisely the time we need them the most. The bill
would, in effect, prioritize residential occupancy over industrial use wherever they conflict, sending a clear and
discouraging message to current and would-be industrial tenants anywhere in the city. It would prevent the City
from taking measures to preserve even small islands of industrial businesses, including the city’s sixteen Industrial
Business Zones, which in the aggregate represent a small geographic portion of the city, but which this legislation
treats no differently than the rest of the city, including its most residential neighborhoods. The bill would render
those zones meaningless.
 This result would be the displacement of businesses and a deterrent to new business investment.
Residential uses – even illegal and unsafe ones – pay far higher rents than, and place enormous economic and
political pressure on, industrial and manufacturing uses. Ultimately, the encroachment of residential uses in these
areas will force businesses to relocate and, in many cases, leave the city altogether, along with the good-paying jobs
and economic diversity that they support.

Additionally, the City opposes this bill because it fails to increase the maximum amount of civil penalty the
Loft Board may recover for violations of its rules and regulations. The $1,000 per-violation fine, which has
remained unchanged for 28 years, is far too small to have an impact on owners who often find it more cost-effective
to violate the Loft Law than to comply. The $1,000 fine should be contrasted with $2,500 to $5,000 penalties for a
first offense and up to $25,000 for a second offense authorized by Local Law 37 of 2007 for creating illegal
conversions in industrial or manufacturing buildings.

The City of New York has been working for the last week with the bill’s sponsors on a chapter amendment.
The ten-day window between passage and signing decision, however, may not in the end afford enough time to
carefully consider and address the range of consequences of this legislation. Given that the existing Loft Law has
been extended in its present form for 28 years, if agreement on a chapter amendment cannot be reached today, we
would respectfully urge disapproval of this legislation and passage of a one-year extension of the existing law. We
will then endeavor to work with the Executive and the Legislature to craft a thoughtful expansion of the Loft Law
that protects tenants, places a premium on safety, and promotes economic diversity.

Very truly yours,

MICHAEL R. BLOOMBERG, Mayor