NYC Hotel Construction Permits Plummet to Near Zero Following 2021 Zoning Amendments

New York City's hotel industry is grappling with significantly increased costs, a situation attributed by some, including visitor Armand Domalewski, to stringent construction regulations. Domalewski recently stated on social media, > "I used to go to a musical every time I visited NYC but hotels in NYC cost so much because of the hotel construction ban that I rarely visit anymore," highlighting the impact on tourism.The core of these regulations is the Citywide Hotels Text Amendment, adopted by the City Council in December 2021. This amendment eliminated "as-of-right" development for transient hotels across the city, instead requiring a special permit from the City Planning Commission (CPC) for new constructions, enlargements, or conversions. This marked a significant shift from previous zoning laws, which had allowed hotels to be built more freely in many commercial and manufacturing zones.The requirement for a CPC special permit has created a substantial deterrent for developers. The process is lengthy, typically spanning 24 to 30 months, and can incur hundreds of thousands of dollars in costs, with an uncertain outcome. Data reveals a stark impact: in the year following the 2021 citywide amendment, not a single application for a new hotel special permit was filed, and only two have been filed since its adoption.Proponents of the amendment, including city council members, community boards, and labor groups such as the Hotel and Gaming Trades Council, supported the changes to regulate hotel development. Their stated goals included preventing "unregulated hotel development" and ensuring that new hotels would not create conflicts with surrounding communities, particularly in manufacturing districts where hotel proliferation had been a concern.Industry experts suggest that the dramatic reduction in new hotel supply, coupled with a recovering tourism sector, contributes directly to higher room rates. As New York City's tourism industry continues its post-pandemic recovery, with millions of visitors expected annually, the limited availability of new accommodations is likely to sustain elevated prices, potentially impacting visitor frequency, as expressed by individuals like Domalewski.