1-Year Ban OKd on Loft Conversions

Acknowledging that the rapid gentrification of downtown, Hollywood and other parts of Los Angeles is making it harder for the poor to afford housing, the Los Angeles City Council on Wednesday approved a moratorium on the conversion or demolition of low-cost residential hotels across the city.

The action will have the largest effect in downtown Los Angeles, where a boom in loft conversions is spreading to the edges of skid row, and raises concerns about the future of the 240 residential hotels that for generations have housed some of Los Angeles’ poorest residents.

“We have nothing else,” Nat Dickholtz, a resident of the downtown Rosslyn Hotel, told council members before the vote. Dickholtz said he was unable to work because of several disabilities and could barely afford his current rent -- $77.99 a week -- even with government assistance.

According to city estimates, the number of available units has fallen by more than 1,200, or 8% of the total, in recent years, and an additional 2,000 units are under consideration for conversion.

Several long-closed single-room occupancy hotels are being reborn as luxury lofts, and a few of the bigger downtown hotels, such as the Frontier, have converted some low-cost units to market-rate apartments to draw in new loft dwellers.

“As we see downtown, and areas like downtown, undergoing rapid change and growth, we must protect the most vulnerable people, people in danger of becoming homeless,” said Councilwoman Jan Perry, who proposed the moratorium.

The moratorium marks the most concrete step Los Angeles officials have taken to deal with worries that the revitalization of long-neglected urban neighborhoods -- driven in part by the region’s hot real estate market -- is displacing the poor.

Mayor Antonio Villaraigosa has proposed a $1-billion housing bond measure to pay for thousands of heavily subsidized apartments aimed at providing housing and social services for transients, some of whom find themselves living in the single-room occupancy hotels downtown and elsewhere.

The moratorium, which goes into effect immediately, will last a year but could be extended for up to a second year as the city drafts a long-term plan for low-cost housing in the city.

Scores of historic buildings in downtown’s old bank district have been converted to luxury units, and some developers hoped this gentrification would extend to the dilapidated, once-grand hotels in the area.

In March, the Los Angeles city attorney’s office sued the owners of the Frontier and Rosslyn, two of downtown’s biggest single-room occupancy hotels, accusing them of moving more than 200 occupants from rooms to make way for a massive conversion to upscale lofts. Prosecutors also accused the operators of regularly shuffling transients in and out of their properties to prevent them from obtaining greater legal rights as permanent tenants.

But some land-use experts said the situation downtown was just one part of a larger housing problem facing the poor. Developers are increasingly looking to hotels as well as run-down apartment buildings as prime locations for new condominiums, which are in great demand in urban areas.

“The gentrification pressures are citywide,” Occidental College professor Peter Dreier said. “But they are more intense in the downtown area. That’s the area that is ripe for wholesale displacement. This is a good stopgap measure to protect the most vulnerable until the City Council figures out what to do on a more permanent basis.”

What will happen to the market as a result of the ordinance is open to debate. Some proponents say that the measure will create a cooling-down period in which city leaders can contemplate how to draft new housing guidelines. Cities such as San Francisco mandate that any residential hotel stock lost as a result of conversions be replaced elsewhere.

The moratorium “will act to at least somewhat limit the speculation on these buildings,” said Barbara Schultz, a senior attorney at the Legal Aid Foundation. “The nonprofits that work downtown have been priced out of buying these hotels. If we can curb the speculation, at least some of these hotels can be purchased by nonprofits.”

But others worry that the ordinance could dampen a boom that has only recently begun to fully take hold.

“The one policy in and of itself is not going to do major damage,” said Carol Schatz, head of the Central City Assn., a business advocacy group. “It is the accumulation, the layering of one over the other.... We have high construction costs, the market itself is in a state of flux and then you start to impose these things. One alone won’t cause terrible damage. But a number of them taken together, even if they affect different parts of the real estate market, can have a negative impact.”

Schatz complained that the economics of converting or upgrading residential hotels were not thoroughly examined by the Los Angeles Housing Department.

“No one I know has entertained or planned to buy these properties and ... wholesale evict people,” Schatz said. “They knew they would be responsible for some sort of replacement housing. The question is, does it make sense to preserve what are antiquated, outdated, substandard units?”

Barbara Planek, a three-year resident of the Frontier and an activist with the Los Angeles Community Action Network, a downtown-based advocacy group for the homeless, said that what she is witnessing downtown has a discomforting familiarity.

“I’ve been through gentrification, from Venice to Hollywood to Silver Lake to Echo Park to here,” Planek said.

In downtown, she said, “our community has nowhere else to go. We should be embraced within the community, and included in the improvements, not pushed away. We are not nothings. We are human beings, and we want to be treated like humans. We need a home, and right now the hotels are our homes.”

Others believe the moratorium is only the beginning of what should be a wholesale examination of rising rents, reduced affordable housing and other pressures on poor people in need of housing.

“At some point,” Dreier said, city officials “have to address the bigger issue, and see the connection between the homeless problem in the city and the loss of rental housing, of which residential hotels are an important but small part.”