DOWNTOWN : SRO Vacancies May Stymie New Projects

The Community Redevelopment Agency board will consider in coming weeks whether to delay or withhold approval of several proposed low-rent Skid Row hotel projects since a recent study found a 14% vacancy rate in existing hotels.

An agency-commissioned study released in October concluded that vacancies are up and will continue to rise at publicly funded, single-room-occupancy (SRO) hotels. The study concluded the housing glut was due to the larger number of units made available in recent years and the latest cutbacks in welfare payments, which prevent the poor from affording even this low-rent housing.

The study, conducted by local consulting firm Housing Management Systems, reviewed low-rent housing projects, owned or run by nonprofit groups, in an area roughly bordered by 3rd, Alameda, 7th and Spring streets. Over the last 13 years, about 1,500 SRO units were either newly built or renovated, with about 600 of the units coming on the market between March, 1992, and April, 1993, according to the study.

An additional 1,252 new and rehabilitated SRO units are expected to come on the market during the next two years. But that’s a net gain of only 97 units, since the majority are being rehabilitated or replaced.

Average monthly rent for an SRO unit, with shared bathroom, kitchen and lounge areas, is $222, according to the study. In September, the county cut monthly general relief payments to $212 from $293, which means individuals who depend on those checks for rent would be left with little or nothing for food and other needs.

The Skid Row Housing Trust and the SRO Housing Corp., the two major nonprofit housing groups in the area, lowered their rents for general relief residents to $190 and $180, respectively. But they and the five other nonprofit SRO providers cannot afford to lower rents again, the report concluded.

The consultants and the redevelopment agency’s staff have recommended that the agency aggressively seek more public subsidies to keep rents low; urge county officials to counter welfare cuts with measures such as allowing recipients to double up in SRO units; provide operating subsidies to the hotel owners and organize neighborhood cleanup efforts.

But another recommendation has brought objections from nonprofit hotel providers and advocates for the homeless: that the agency not fund the rehabilitation or acquisition of the Palmer, Eugene and Southern hotels--all SRO Housing Corp. projects--unless they obtain federal subsidies.

The nonprofit providers and homeless advocates argue that the problem is not an overabundance of rooms. Even the study notes that the high vacancy rate does not necessarily reflect a lack of need for low-income housing. Advocates say such housing should continue to be built to meet the demand.

Andy Raubeson, executive director of the SRO Housing Corp., said his group is being unfairly punished for the study’s high average vacancy rate. Raubeson said the vacancy rate at his 15 hotels is less than 5%, with a waiting list for at least half those vacant units. “We do not have high vacancy rates. We’ve never had high vacancy rates,” he said.

Yet, it is his group’s proposed projects that are being placed on the back burner. “You don’t starve success to feed failure,” Raubeson said. “It’s a precipitous reaction to a study that’s not in-depth at all. Housing is a long-term endeavor, and you can’t just start and stop.”

The redevelopment agency board’s housing subcommittee is considering these concerns and will make its recommendations to the full board in coming weeks.

Committee chairwoman Shelby Jean Kaplan Sloan agreed the problem is more the inability of low-income tenants to afford the rents rather than a surplus of housing. But putting future units on hold until the existing rooms are filled could be a solution, she said.

“We have limited resources. We’re going to have to say no sometimes,” she said.