Time’s Running Out for Former Tenants to Get New Apartments

A housing bonanza for 23 of the city’s poorest residents is about to slip away because the developers of a new, upscale apartment complex downtown cannot locate the former tenants of a residential hotel who are entitled to move into the apartments at sharply discounted rates.

The 23 studio and one-bedroom apartments in the 192-unit Market Street Square development at 3rd Avenue and Martin Luther King Way are currently sitting empty, waiting for low-income residents of the demolished Douglas Hotel to claim them--and pay rents totaling just 30% of their income, whatever that income may be.

But the apartments won’t be there for long.

“We have begun moving in other (low-income) people,” said Doris Snashall, occupancy specialist for Market Street Square’s developer, the Culver City-based firm of Goldrich and Kest. “We will fill up . . . by mid-September.”

$480 for a Studio

The situation at Market Street Square, where undiscounted apartment prices start at $480 for a studio and rise to $725 for a two-bedroom unit, has its roots in a downtown redevelopment decision implemented two years ago.

That was when the city demolished the single-room occupancy Douglas Hotel, to make way for the 192-unit Market Street Square complex at the same site.

Under state law and the terms of a $3.7 million federal Housing and Urban Development Department grant, the Centre City Development Corp. was required to replace the 40 units of low-income housing lost in the demolition of the single-room occupancy hotel with 40 units in the new complex.

Twenty-nine of the apartments were to be guaranteed for very low-income people, to be leased at 30% of the tenant’s income. The remaining 11 would go to low-income people at less desirable, but still discount, rates.

Move Cost $200,000

In addition, CCDC moved the Douglas’ 36 residents--four units were vacant when the hotel was demolished--and the five businesses on the ground floor of the hotel into new quarters, at a cost of about $200,000. The agency also was required to give the displaced tenants first crack at the apartments, said Pam Hamilton, assistant vice president at CCDC.

Thus Market Street Square--where young professionals can find pastel-colored decor, a sauna, a spa, a pool, a fitness room, a recreation room and two levels of underground parking--was to be home to about 40 people from one of downtown’s more rundown residential hotels.

“There is absolutely no comparison between the housing we tore down and the housing we just built,” said Hamilton, who is less than enthusiastic about the trade-off. “The requirement might make some sense to me if we tore down an SRO and we built an SRO. Market Street Square is . . . a whole different housing type.”

By the time Market Street Square was ready for occupancy Aug. 1, one Douglas tenant had died and two others had moved without supplying forwarding addresses. Snashall began trying to find the remaining 33 by sending out certified letters June 22. She followed up with a second, regular mailing about Aug. 1, she said.

10 Have Taken Offer

So far, 10 Douglas Hotel tenants have taken the offer, and have moved into Market Street Square or are soon to arrive. Because of their extremely low incomes, they will pay rents as low as $109, $143 or $249 per month, she said. The developer takes a loss on the difference between the discounted rents and the market rates, she said.

“We should all be paying 30% of our income for our lodging,” Snashall said. “That’s what the banks said, anyway.”

Another 23 former residents of the Douglas either have not been found or are choosing not to move to Market Street Square.

“These are special people,” Snashall said. “They don’t have the wherewithal to take advantage of things that are available to them.”

Similar Problems

Hamilton said similar problems have occurred when CCDC attempted to find the former residents of other residential hotels demolished for downtown redevelopment.

“We’ve always had trouble finding displacees, even though we tell them they’ll have priority,” she said.” Maybe they’re just like everybody else. We’re a very transient society. People move and then I guess they don’t dwell on where they’ve been.”

The 40 reduced-rate apartments, which are scattered throughout the building, are instead being rented to other low-income tenants--300 of whom have applied for the units, Snashall said.

Any former Douglas Hotel resident who shows interest after all 40 are rented will be placed on a waiting list for the first available apartment, she added.