Federal Law No. 59 (On Hostels)

The main content of the law is a ban on the organization of mini-hotels ( hostels ) in residential apartments. In part 3 of Article 17 of the Housing Code of the Russian Federation ^{[3], the} words "It is not allowed to place industrial premises in residential premises," are supplemented by the word "hotels". Also added here is the sentence "Residential premises in an apartment building cannot be used to provide hotel services." ^[4] .

Thus, to organize a hostel in an apartment of an apartment building, it is necessary 1.) to transfer the apartment from the housing stock to non-residential, 2.) provide the hostel with a separate entrance. On May 21, 2019, the Duma proposed even tougher legislation regarding the transfer of residential premises to non-residential premises in an apartment building. In the third reading, bill No. 542922-7 ^[5] was approved, which provides for such a translation, the need for an appropriate decision of the general meeting of owners in an apartment building, as well as the written consent of all owners of apartments adjacent to the translated premises. Moreover, directly on the website of the State Duma, these innovations are directly linked to the norms provided by law No. 59-FZ ^[6] .

A bill containing regulatory standards for hostels began to be discussed in 2014. Duma deputy Galina Khovanskaya (Just Russia) proposed a complete ban on hostels in residential buildings, and the State Duma adopted it in the first reading. Note that Khovanskaya is one of the initiators of the current law. Arguments against hostels have been voiced repeatedly: first of all, these are inconveniences for other residents of the house, as well as security issues and the tendency of owners of mini-hotels to avoid taxes as much as possible.

The bill met with serious resistance from the tourism business community (a rally was even organized in St. Petersburg in 2016 ^[7] ) and work on it drastically dragged on. Only in April 2018, the government submitted its amendments to the Duma, and the further development of events lasted for a year (instead of the expected six months) ^[8] .

In March 2019, the State Duma approved the bill in the second and third readings ^[9] , but a week later the Federation Council unexpectedly rejected it with the reason that it does not give entrepreneurs time to reorganize their business ^{[10] [11]} . The media drew attention to the fact that on the eve of the meeting of the upper house of parliament, the law criticized his interim governor of St. Petersburg, Alexander Beglov , who addressed Valentina Matvienko and proposed postponing the date of entry into force of the new law ^[12] . The State Duma even announced its readiness to overcome the Federation Council veto ^[13] , but a compromise was reached in the future (the date the law entered into force was postponed to the end of the vacation season) and in April the draft was quickly agreed by both chambers of the Russian parliament ^[14] . A few days later, the head of state signed the law.

In March, Russian business ombudsman Boris Titov criticized the bill. “A compromise solution has not yet been found in the law, this led to the closure of small hotels in the residential sector, which is probably not beneficial for the country,” he said at a news conference at the Izvestia Information Center ^[15] . At the same time, Titov noted that when working on the bill, the State Duma took into account the position of business, softening the most stringent formulations ^[16] .

The head of the Republic of Crimea, Sergei Aksyonov, told Izvestia that the law "will not have a negative impact on the economic results of the upcoming tourist season." In his opinion, this is due to the specifics of the resorts of the republic, as well as the quantitative ratio of hotels and hostels. “Most hostels in the Crimea — and there are only a few dozen of them — are located in non-residential premises,” Aksenov said, citing for comparison the indicators for apartments and rooms (18 thousand) and inexpensive guest houses (4.5 thousand) ^[17] .

Sochi Mayor Anatoly Pakhomov spoke more streamlined: “As a mayor of a city where people rent their apartments, I’m certainly interested in making money - after all, the richer our residents, the less problems I have as the head of the city. If they interfere - it’s necessary to close them, and if they don’t interfere completely? So far, there are two ways, and I suggest not to rush, but to sort it out and make hostels useful. " At the same time, Pakhomov called for the introduction of taxation standards for owners of such hostels adopted for the self-employed ^[18] .

1. ↑ Amendments were made to the legislation prohibiting the placement of hotels in apartment buildings (Russian) . President of Russia. Circulation date May 20, 2019.
2. ↑ Federal Law of April 15, 2019 No. 59-ФЗ (Russian) . President of Russia. Circulation date May 20, 2019.
3. ↑ Article 17. Purpose of the dwelling and the limits of its use. Use of residential premises (Russian) . Housing Code of the Russian Federation 2019. Date of appeal May 20, 2019.
4. ↑ Federal Law of April 15, 2019 N 59-ФЗ "On Amendments to Article 17 of the Housing Code of the Russian Federation" (Russian) . Russian newspaper. Circulation date May 20, 2019.
5. ↑ No. 542922-7 Bill :: The system of legislative activity support (neopr.) . sozd.duma.gov.ru. Circulation date May 22, 2019.
6. ↑ The order of the transfer of residential premises to non-residential (Rus.) Is changing . The State Duma. Circulation date May 22, 2019.
7. ↑ Owners of hostels and mini-hotels will come out on June 9 for a rally on the Field of Mars (Russian) . www.metronews.ru (June 9, 2016). Circulation date May 20, 2019.
8. ↑ There are hostels in Russia, but there is no law about them. As a result, in Moscow, courts close them in dozens. Who needs it and why? (unspecified) . meduza.io. Circulation date May 20, 2019.
9. ↑ The State Duma adopted a law restricting the operation of hostels (Russian) . www.kommersant.ru (March 6, 2019). Circulation date May 20, 2019.
10. ↑ Hostels were allowed to finalize before the election (neopr.) . RBC. Circulation date May 20, 2019.
11. ↑ What will result in a ban on hostels in residential buildings | Business (neopr.) . Forbes.ru (March 13, 2019). Circulation date May 20, 2019.
12. ↑ Beglov warned of the negative consequences of the new law (Neopr.) . RBC. Circulation date May 20, 2019.
13. ↑ In the State Duma, they suggested overcoming the veto of the Federation Council on the hostel law (Russian) . RIA Novosti (20190329T2341 + 0300Z). Circulation date May 20, 2019.
14. ↑ The Federation Council approved the ban on hostels in residential buildings since October (Neopr.) . RBC. Circulation date May 20, 2019.
15. ↑ Titov believes that closing hostels in residential buildings is not beneficial for the country (neopr.) . TASS. Circulation date May 20, 2019.
16. ↑ Titov said that the Duma had "secured" a bill for the ban on hostels in residential buildings (Russian) for business . Interfax.ru. Circulation date May 20, 2019.
17. ↑ Dmitry Laru, Elnar Bainazarov. “International flights from Simferopol can be opened as soon as possible” (Russian) . Izvestia (May 13, 2019). Circulation date May 20, 2019.
18. ↑ The mayor of Sochi invited hostel owners to pay taxes as self-employed (unopened) . TASS. Circulation date May 20, 2019.