16 years
I'm not sure about zoning and permits, but it's probably a good idea to check with the City.
http://www.nyc.gov/html/dcp/html/subcats/zoning.shtml
Articles that mention NYC hostels that didn't get the permits:
http://www.nytimes.com/2006/01/22/nyregion/22hotels.html?_r=1&pagewanted=print&oref=slogin
http://www.hostelmanagement.com/hostel-news/3-hostels-shut-down-new-york-city
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