Flophouse shuffle

City tries to protect tenants of low-income hotels

Affordable-housing activist Charlotte Delgado praises the city’s new rules protecting residents of single-room-occupancy hotels like the Hotel Marshall.

Affordable-housing activist Charlotte Delgado praises the city’s new rules protecting residents of single-room-occupancy hotels like the Hotel Marshall.

Photo By Larry Dalton

Charlotte Delgado knows what it’s like to almost lose one’s home. So when the 69-year-old president of the Statewide Alliance of Tenants tells you that the city council’s recent call for stronger protections for residents of low-cost residential hotels is more than window dressing, it carries some weight.

“Instead of wringing its hands and saying, ‘Oh, what can we do,’ Sacramento is finally leading the way,” said Delgado, who said she has watched the housing market close in on the very poor in Sacramento for 20 years.

Single-room-occupancy hotels (SROs) always have been seen as the final rung in the ladder before homelessness.

What the city did was make it harder for hotel owners who wish to get out of the SRO business to do so. Not impossible, but harder. Conversions of downtown Sacramento’s many hotels in the past led to the loss of more than 300 units in the last 20 years, although the city has beefed that up somewhat with the addition of two new complexes.

The new ordinance, which takes effect immediately, introduces two new burdens to the process: one to the private owner and one to the city.

Hotel owners now must provide the city with a relocation-assistance plan for each hotel to be closed, detailing, among other things, that each tenant was offered up to two comparable units in other buildings and was given $2,400 in relocation expenses. All but $400 of that is offered to a new landlord of the tenant’s choosing for first and last month’s rent and security deposit, with the rest going to the tenant for moving expenses. The old law offered tenants $1,500 in moving assistance. And in the past, a hotel owner simply had to give notice to tenants and the city and provide tenants with relocation money.

Under the new law, any tenants left without housing at the end of a 60-day search period will be given the $2,400 relocation check to find housing on their own.

To housing advocate Ethan Evans, executive director of the Sacramento Housing Alliance, the ordinance signals the city stepping up in a way heretofore unseen.

“For the first time, it requires landlords to really participate with the tenants,” Evans said. “It’s not just ‘here’s a list; go find it yourself.’ It’s really the first time the owners will be engaged with the tenant in a way that will really help them out.”

But while housing advocates crow about the new law, hotel owners are left to wonder if society’s problems aren’t falling all on one body.

“We’ll take the challenge of the new ordinance and take care of these residents—just like we’ve done 24-seven,” said Peter Noack, vice president of CB Richard Ellis and co-owner of the Marshall Hotel. “But I’d add that as landlords, we’re probably not as good in helping tenants find a place to live as social workers.”

Noack said that keeping the aging hotel afloat on the reduced rents he receives from his tenants is a struggle in itself. He believes that responsibility for housing Sacramento’s very-poor should fall on the community at large, not just on outgoing hotel owners. (Like most SROs, rents at the Marshall are based on a percentage of income, and most hover around $490 for a furnished room, according to city reports.)

Noack squashed any rumors that the Marshall would be sold within the next year to make room for a boutique hotel, saying it would be a minimum of two years before any movement could be made on the property, largely because he and his partners are waiting for other projects around them to develop.

“This [ordinance] just makes it tougher,” Noack explained.

In addition to the ordinance, the city also earmarked $15 million to build new SROs and refurbish existing ones. The city also committed itself to a “no net loss” policy, whereby it promises to replace any lost housing within three years of a hotel’s closure.

“In the past, it was just a policy that ‘we should try to preserve this housing stock,’ and, in the meantime, we lost 300 units,” Evans said.

“So this is different,” Evans continued, ticking off the list of changes in the ordinance, including the city’s requirement that it report back annually its progress in growing and protecting this specific housing stock.

The city has promised to rehabilitate the 58-unit Ridgeway Hotel, the YWCA and the Sequoia Hotel starting late this year or in early 2007. Additionally, the city is using some of that funding to secure at least one site for construction of a new SRO facility, according to the Sacramento Housing and Redevelopment Agency’s Jim Hare.

“We can’t say where right now,” said Hare, “but site discussions are going on that would support over 100 units.

“There’s nothing to say we have to wait until a closure happens before we find a site,” Hare continued, “or start construction, and, ideally, we would like to have two or more projects going by the time the Marshall says it’s going to close.”

Hare told the council that SHRA would be back in December with the identification of at least one construction site. He would not specify the location, however, saying that the entire city is open for discussion, as long as the site is close to transit lines and other services.

While pleased with the city’s progress with this ordinance, Delgado cautions that work still remains to ensure that access is available to all. She worries that building new housing outside the downtown area will make it more difficult for tenants to get to restaurants and other needed services.

“You really can’t just build anywhere. There have to be services and light rail nearby,” she said.