Chicago expected to pass law to stem redevelopment of cheap hotels

Reuters News
Posted: Nov 12, 2014 7:04 AM

By Mary Wisniewski

CHICAGO (Reuters) - The Chicago City Council is expected to pass an ordinance on Wednesday that will make it tougher to redevelop single-room occupancy (SRO) hotels, which advocates say will protect residents from homelessness.

Hotel residents are often disabled, veterans or seniors on fixed incomes. Advocates for the poor say that over 2,000 SRO units have been lost to redevelopment in gentrifying neighborhoods in the past three years, forcing some residents onto the streets.

"Those are people who need that housing," said Robert Rohdenburg, 55, who was homeless for nine months after the Chateau Hotel in the popular north side "Boystown" neighborhood shut for redevelopment. "You don't want them in the streets, you don't want them in jail."

The ordinance, which has the support of Mayor Rahm Emanuel, requires building owners who want to sell their buildings to take steps to keep them affordable. An owner can negotiate for six months to find a buyer who will maintain the building's affordable status for 15 years.

Or an owner can pay $20,000 per unit toward an SRO preservation fund. Subsidies will go to affordable housing buyers.

The ordinance provides displaced tenants with $2,000 to $10,600 to relocate, depending on circumstances. Tenants would get the maximum if the building was evacuated due to unsafe conditions.

SROs typically provide a single room, often with a shared bathroom, and rent for $300 to $700 a month.

The city had about 50,000 SRO units back in the 1970s and 1980s - fans of the 1980 movie "The Blues Brothers" may recall Elwood's cramped room, constantly rattled by the "L" train.

But most of the hotels were knocked down or converted as the neighborhoods around them got more expensive, according to advocates for the homeless, and now only about 6,000 units are left. Several hotels near the city's lakefront have been converted into high-end rentals in recent years.

The Chicago ordinance is based on a stronger one passed in Los Angeles in 2008, said Mary Tarullo, senior organizer for ONE Northside, a community group.

"It is a really crucial piece of the affordable housing puzzle in Chicago," Tarullo said.

Representatives for two companies known to be SRO redevelopers, BJB Properties and FLATS Chicago, were not immediately available for comment.

(Editing by Eric Walsh)