Tuesday, November 29, 2016

SRO Hotels in the BAMBD going fast

The former Lake Merritt Lodge on Harrison Street now serves as a dormitory for graduate students at Hult Business School in San Francisco. (D. Ross Cameron/Bay Area News Group)
The former Lake Merritt Lodge on Harrison Street now serves as a dormitory for graduate students at Hult Business School in San Francisco. (D. Ross Cameron/Bay Area News Group)

OAKLAND — With some help from Sacramento, the city is trying to protect a vulnerable population from getting crushed under the wheels of progress.

Many with little income live in single-room-occupancy hotels, often gritty but relatively inexpensive structures built in the 19th or early 20th centuries. The hotels are now a prime target for redevelopment into lucrative condos, boutique hotels or pricey short-term housing.

Most SRO residents rely on Social Security and disability payments for their income, earning less than a quarter of the county’s median income of $65,450, a report by Oakland’s Housing and Community Development found.

Earlier this month, the City Council endorsed a resolution to seek the same authority that the state’s four biggest cities already have to limit the loss of SROs from Oakland’s mix of housing options.

“We do not have the tools to regulate SROs as other cities do,” Councilman Abel Guillen, co-sponsor of the resolution, told council colleagues on Oct. 4. “This loophole needs to be addressed.”

Since 2004, the number of these properties has been shrinking fast. Of the 31 SROs operating in 2004, only 18 are left, today, a report by the city’s Department of Housing and Community Development found.
Some former SROs are now market-rate apartments, such as the 10 units of the former Alendale Guest House on Jayne Avenue or the Hotel Westerner, 19 units at 1954 San Pablo Ave., which was demolished. The land it stood on is now part of the footprint of the Uptown, a three-building market-rate apartment project.

The 157 units of the former Lake Merritt Lodge at 2332 Harrison St. became student housing for Hult International Business School in 2014 after being vacant for years.

The former Moor Hotel, 2351 San Pablo Ave., has also been shuttered more than a decade.
“This is consistent with the practice of land banking, in which an owner will hold onto a property purely for its speculative value,” the report states.

Others, such as the 149-unit California Hotel, 3501 San Pablo Ave., and 160-unit Hamilton Apartments at 2101 Telegraph Ave., have been renovated to include private kitchens and bathrooms, not typically featured in traditional SROs, and are now managed as affordable housing. The conversions reduced the number of units in the two properties, from 309 total to 229.

The resolution targets the state’s Ellis Act, passed in 1985, which gave property owners broader grounds to evict tenants and prohibited cities from insisting a property remain in the rental market. The act has sometimes been seen as a driving force when rent-controlled housing is converted into market-rate condos.
In 2003, the Legislature amended the act to allow four cities – San Francisco and three with populations of more than 1 million (Los Angeles, San Diego and San Jose) – to protect the status of residential hotels.
Among SROs threatened is the 88-unit Hotel Travelers at 392 11th St., a seedy-looking place across the street from East Bay Municipal Utility District offices.

A developer has touted plans to open a much tonier place, with a rooftop lounge, raw bar and Creole restaurant.

Owners of the 106-unit Sutter Hotel on 14th Street also have told the city they are interested in converting the building to upscale apartments, the report said.

The resolution seeks the authority for Oakland to adopt ordinances, as other cities such as San Francisco, Los Angeles, San Diego, Portland, Chicago and New York have done, to preserve SROs as low-income housing.

City Council president Lynette Gibson McElhaney co-sponsored the resolution, which the council passed unanimously. The next step in the process will be to identify a sponsor in Sacramento and reach out to other cities and counties to join the effort.

However, “nothing with the Ellis Act moves that quickly at the state level,” warned Alex Marqusee, a legislative analyst in Gibson McElhaney’s office. “This is a long-term effort.”

With that in mind, the city attorney is looking into the legality of declaring a moratorium on conversions or demolitions, or imposing stricter requirements for winning city approval for conversions, he said.
The city is also checking to see if some of Oakland’s proposed $600 million bond, Measure KK, that is directed at repairing streets, sidewalks, city facilities and affordable housing, could be set aside for extremely low-income residents who make 20 to 30 percent of median income — less than $20,000 per year.
“This is an issue that is growing in significance,” Councilwoman Rebecca Kaplan said. “I hope the state will give us this leeway to protect the most vulnerable people in the community.”

Contact Mark Hedin at 510-293-2452, 408-759-2132 or mhedin@bayareanewsgroup.com.

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