Downtown Hotel Residents Losing Meager Homes
When Tony Bayer moved into Room 107 at the Astor Hotel on E Street in 1972, his rent was $65 a month.
Today, Bayer, 70, pays $300 for the same tiny room with a small bath and no cooking facilities. He has lived there for 13 years. But now, with Horton Plaza and other fruits of the city’s downtown revival efforts encroaching on the Astor’s dilapidated entrance, Bayer wonders how much longer he will be staying.
“They’re always raising the rents--the last one was in July, when it went up $20,” said Bayer, a retired film projectionist who spends his days in his room puttering with a pair of home computers and monitoring police and ship radio bands. “There’s talk that the city’s going to take the hotel over and close it.”
Michael Schwartz, owner of the property, said he wants to renovate the building and continue to lease it out as a “single room occupancy” hotel. While one city agency, the San Diego Housing Commission, approves of that plan, another one, the Centre City Development Corp., wants him to tear it down and put up something that more neatly fits into CCDC’s master plan.
“I’m not interested in selling it, or doing anything else with it--those people need a place to live downtown,” Schwartz said. “But the CCDC is putting tremendous pressure on me, and now it’s really out of my hands.”
Single-room occupancy hotels, or SROs in housing agency lingo, are hotels that generally do not serve tourists. The rooms often are long-term residences for one person, but they usually lack kitchens or private baths. They often are the last alternative to a life spent on the streets and in the city’s shelters for the homeless.
A recent Housing Commission study, however, found that the old hotels are rapidly disappearing. Since 1976, more than 1,200 SRO units--about 26% of the total --have been destroyed, have been converted or have fallen into disuse. Only 66 such hotels, with 3,425 units, remain in downtown San Diego, and rents for those have been rising an average of 16% annually since 1980.
Around the corner from the Astor, “gentrification” is already in full swing at the 70-unit William Penn Hotel on F Street. Most of the hotel’s permanent tenants--who were paying about $250 per month --moved out a couple of months ago, when workers began converting some of the dingy, 10-foot-by-12-foot rooms into airy 2 1/2-room suites that will rent for well over $500 a month, hotel manager David Paynter said.
The 40-unit Douglas Hotel was razed in July. While CCDC will reserve 40 of the 192 apartment units to be built on the site for low-income families, Housing Commission statistics suggest that the new low-income tenants will be markedly different from those who were displaced. While nearly three-fourths of SRO tenants are under 62, and more than half of them work, the commission’s studies predict that 94% of the new tenants will be over 62, and only 3% will be employed.
The low-income tenants who have traditionally lived downtown--"long an area tolerant of poverty and nonconforming behavior,” the commission’s study says--are slowly being squeezed out. As the city agency charged with addressing the problem of an impending shortage of low-income housing downtown, the Housing Commission has asked the City Council to approve $200,000 to rehabilitate a demonstration SRO.
On Wednesday, the Housing Commission and the mayor’s Task Force on the Homeless hosted a workshop conducted by the state Department of Housing and Community Development and concerning ways to purchase and rehabilitate San Diego’s downtown hotels.
State officials outlined for property owners and nonprofit groups two programs that provide low-interest, long-term loans to rehabilitate SROs. While San Francisco, Los Angeles and other cities in the state have taken advantage of the programs to save about 20 low-income hotels, no loans have been made for projects in San Diego from either fund.
Under one of the programs, project sponsors can obtain five-year, 3% loans for renovating SROs through local housing agencies or nonprofit corporations. Repayment of the loans may be postponed at five-year intervals for up to 30 years.
Under the second program--the Special User Housing Rehabilitation Program--30-year loans at 3% interest are available to individuals or groups interested in buying and renovating SROs. But in return for the generous credit terms, property owners must agree to let the state limit their annual return on equity to 8%, as well as allow the state to determine the rents for the rehabilitated units for 30 years--even if the owner prepays the debt.
Property owners also could receive tax credits for rehabilitating historic buildings. But those credits would be repealed under President Reagan’s proposed tax reform.
Hotel owners at the workshop expressed little enthusiasm for the state programs.
“They want to own my building for 30 years and give me 8%?” asked Seymour Reichbart, owner of three low-income hotels, including the Keystone Hotel on 10th Avenue. “That’s ludicrous. I’m putting money into my units all the time now, and I’m earning 25%.”
Reichbart said that he and other SRO owners would build new low-income hotels with private, market-rate loans if the city would make some exceptions in its building code for SROs.
“If they would waive parking space and a few other stringent requirements that don’t make sense for SROs,” he said, “they could very easily get new hotels in many different parts of the city. That’s what the city needs.”