NYC hits landlord with $4M penalties for ‘horror movie’ conditions and illegal hotels

A notorious landlord known for turning empty rent-stabilized apartments into illegal hotels and letting mushrooms sprout from the walls of tenants’ crumbling apartments is facing more than $4 million in penalties from New York City — a sum renters say still won’t be enough to actually fix their problems.

Landlord Daniel Ohebshalom, also known as Daniel Shalom, will pay close to $4.2 million in fines and settlements in three separate lawsuits brought by the city’s Office of Special Enforcement and Department of Housing Preservation and Development over the past three months, court records show.

The city accused Ohebshalom of raking in more than $300,000 in illegal hotel fees after displacing tenants in rent-stabilized apartments at his Hell's Kitchen properties, and presiding over severe housing code violations at his buildings in Washington Heights.

Ohebshalom did not immediately respond to requests for comment.

Fungus growing from walls, front doors that won’t lock and collapsing ceilings earned his managing agent the top spot on the public advocate’s annual “Worst Landlord List” last year. Buildings in his portfolio have amassed thousands of housing code violations, city records show.

Mayor Eric Adams said the fresh round of penalties send “a clear message to those who harass tenants.”

“You are breaking the law, and we will hold you accountable,” Adams said in a statement.

While the civil fines and settlements mark a small victory for tenants demanding safe conditions, they’re chump change for Ohebshalom and his associates and probably won’t lead to lasting reforms, said Marc Kessler, an artist and playwright who has lived at one of Ohebshalom’s Hell’s Kitchen properties for eight years.

Kessler said he and his roommate were forced to move from their apartment to a neighboring Ohebshalom-owned building following a fire in their building in 2015.

Years later, the apartments in that building, 412 West 46th St., still sit empty with the rent-stabilized units warehoused and previously used as short-term rentals. Ohebshalom listed the two properties for sale for $11.7 million, with real estate agents advertising how “a new investor can immediately gut-renovate [and] bring almost all the units to market-rate rents,” in 2021.

Kessler, who still lives in the building owned by Ohebshalom, said he and the other tenants have dealt with harassment from building managers and intruders who break in through unlocked doors, in addition to the dangerous structural conditions. They have consistently documented the problems on social media.

“It’s like a horror movie. Literally Hollywood could rent it out as a horror movie,” Kessler said of his five-story walkup. “This is not a secret. Hell, we are not quiet about it.”

He said the tenants have held several rallies and gained the support of various local elected officials, but still can’t get their problems fixed.

“It’s a huge flaw in our city that people can be as vocal, well documented and honest as we are and that this can continue,” he said. “I’m showing everyone my wounds and we’re not seeing a resolution.”

Ohebshalom and his associates denied the illegal short-term rental allegations in a settlement with OSE. He did not respond to messages left with his company, Keystone Management, which lists him as president on mortgage documents. His attorney did not respond to a phone call.

Assemblymember Tony Simone said he wants the city to take stronger enforcement action, including seeking jail time for Ohebshalom and his associates based on the contempt charges.

But landlords rarely face jail time, even after accruing thousands of violations and endangering tenants.

“He is a slumlord and a criminal in my eyes,” Simone said. “We’re hoping this settlement is the start, not the end.”

HPD spokesperson William Fowler said the city is still suing for repairs and seeking contempt penalties for Ohebshalom and associates at seven other buildings.

The problems mount, despite the fines and settlements. Tenants at two of his buildings in Washington Heights haven’t had heat or hot water for over a week, according to HPD records.

The city and landlord are heading to trial in November.

“This isn’t ‘mission accomplished,’” Fowler said. “We’re going to continue working to hold him accountable until conditions are improved.”