Gimme Shelter | Cover Story | Salt Lake City | Salt Lake City Weekly

March 18, 2009 News » Cover Story

Gimme Shelter 

The city’s working stiffs and down-on-their-luck hold out for affordable rent.

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The suit from the City is looking nervous. His audience, seated in rows of folding chairs and wearing what looks like the picked-over hand-me-downs from Deseret Industries, the faded garb that is the uniform of the very poor, sounds mutinous.

A hacking cough from the back of the room that sounds something like walking pneumonia interrupts Matt Dahl’s increasingly fruitless attempt at this December 2008 meeting to explain federal “tax credits” and “requests for proposals” to the room packed with residents of city-owned turn-of-the-last-century rooming houses on State Street.

The city was close to doing something with its downtown hotels—the Regis, the Cambridge and the shuttered Salt Lake Blue—explains Dahl of the city redevelopment agency. That meant residents would likely have to move soon. But, not to worry. The city invested in a remodel of an old Holiday Inn on the outskirts of downtown, and 60 of the State Street residents could move there.

“Sixty?” the man with the hacking cough interrupts, noting that more than 100 people currently lived in the State Street buildings. “Do the math.” As the room breaks into open grumbling, Mary, the longest-term resident in the group, wearing a large orangeand-black hat, her cane beside her, voices the unasked question for the room: “Why can’t we just stay?” she asks. “Everybody is happy here. I can’t imagine taking down this beautiful building.”

Salt Lake City Council members swear up and down they are committed to affordable housing. But the residents of the buildings are deeply suspicious. They have learned from long experience that, when it comes to “redevelopment,” the poor usually get the shaft. Salt Lake City has owned all the State Street buildings for five years and the only thing that has happened is that one of the old hotels has been shut down for lack of maintenance.

Regis Hotel resident Richard says he’s been preparing for redevelopment by gathering the sleeping bags he’ll need for life on the street.

“It sounds like it will all come down to whoever gives the council members the most money,” he says. “Smoke up your ass,” is Regis resident Michael Whiteman’s concise assessment of the December meeting before he storms out.

Victims of Our Success
Known in city circles as the State Street “SROs,” for “single-room occupancy,” the three State Street hotels located between 200 South and 300 South have been a thorn in the side of city officials since the Salt Lake City Redevelopment Agency purchased the buildings beginning in 2002. Now, frustrated at its inability to interest a developer, the City Council is offering the SROs for sale, no strings attached. Tear the buildings down; get rid of all low-income units, whatever. A request for developers to submit letters of intent advertised since March 15 just seeks a developer willing to do something, anything.

Salt Lake City used to be filled with such rooming houses that catered to working people on short-term jobs and those with enough money in their pockets to rent a room for a week, but no way to put down a deposit on an apartment.

The State Street SROs are the last of their kind—homes to Salt Lakers who, because of poverty, bad credit or criminal histories, literally can’t get a place anywhere else—a small room with a bathroom down the hall for about $80 a week. They include just 150 or so possible rooms, but the State Street SROs have become a symbol of the affordable-housing crunch in central Salt Lake City. For some, like Salt Lake City Councilman Luke Garrott, the buildings’ fate says a lot about where we’re headed as a city. “In my opinion, the [SROs] are the best thing going on State Street,” he says. “There is actually life on the street.

homeless, says Councilman S%uFFFDSimonsen. With Garrott, Simonsen is pressing to keep the State Street buildings as low-income units and preserve historic elements of the structures, which date to the early 1900s. In fact, as the economy turns south, the City Council is now talking about maintaining SROs somewhere downtown, if not actually on the site of the three old hotels, and building new SRO units as well. The change comes partly from recent years’ elections that gave a slight leftward tilt to the Council. It’s also true that, with unemployment threatening to climb to 10 percent, it is increasingly difficult to think of the SRO’s residents as the other guy.

The Politics of Housing
One-fourth of the SRO residents have lived there for at least five years. One of the newer residents—who found herself there after medical problems—says many “are one paycheck away from being on the streets,” and their plight is a matter of public policy. “This is a political issue,” says the woman, who worried appearing in this article could cost her a home. “We don’t have affordable housing.”

Councilman Garrott says price escalation in Salt Lake City has changed the meaning of “affordable housing.” It’s not about housing the “poor” in the traditional sense but about housing working people. Councilman Eric Jergensen notes that Salt Lakers making around $40,000 per year qualify for federally subsidized housing. Developer Danable housing: the question of where to put the poor vs. where to put the better-off. Should homes for the poor be integrated with higher-income housing throughout the city? That might mean building fewer affordable units. Some council members worried the alternative—allowing largescale affordable-housing projects—could depress neighborhood development. But, under Salt Lake City Mayor Ralph Becker—who has taken the work back into his office—the city housing plan is moving forward again.

A recent study by Jim Wood, director of the University of Utah’s Bureau of Economic and Business Research, finds a huge unmet demand for housing people who make less than $18,000 per year. “The tremendous need has become more apparent in this market,” says Marci Milligan, president of Lotus Community Development Institute, the Salt Lake City group that commissioned the study. Lotus is currently working with a coalition of banks to develop new ways to finance housing for working people. Zoning will need to be changed if Utah cities are to provide the density of housing needed for the growing population, she says. Poor people’s advocacy organization Crossroads Urban Center has been pressuring City Hall to use the housing plan as an opportunity to write an “inclusive zoning ordinance” like the one already in place in Park City. Such ordinances give developers incentives—such as higher densities or faster approval—for making room for working people in their projects. In Park City, any significant new devel Physically speaking, a mix of incomes in discrete housing projects, a mix within instead of between, makes sense. A healthy city needs the sort of diversity you have in a natural system, social, racial, ethnic, sexual orientation and income.”

Garrott worries that, even with the housing inflation bubble deflating, Salt Lake City could price out the very people who keep the city running. “We could become a victim of our success,” he says. “If we gentrify every neighborhood, it would be a nightmare for socio-economic diversity.”

The debate over the future of the State Street SROs comes amid a larger discussion of affordable housing in Salt Lake City and Utah. If nothing else, the national recession has begun to answer the question of how many $250,000 condos downtown Salt Lake City really needs. Many of the older central city apartment buildings converted to condos in the past five or so years are now back on the market as rentals.

Downtown condo prices are coming down, and many units sit empty. Still, a recent study finds there are virtually no affordable rooms for working people.

As Utah’s recession lingers, Salt Lake City’s one-time dream of fancy condominiums located on the spot of the SROs has given way to the reality that Salt Lake City is going to have to house increasing numbers of the jobless and newly Lofgren refers to such units as “community housing,” for folks like schoolteachers or policemen making $30,000 to $40,000 per year. Lofgren’s Cowboy Partners has built some community housing downtown. But, he says, equally important is housing for those making around $15,000 per year, “the hourly wage earners who keep the restaurants running, our buildings operating and, really, are so critical to a downtown economy.”

Lofgren says the redevelopment agency’s State Street property is perfect for such “workforce housing,” which he says ideally should be located close to public transportation and to jobs. But Cowboy Properties has found the redevelopment authority’s past developer-selection process frustrating and has not decided whether or not it will submit a proposal.

The crunch of affordable housing isn’t new. Utah’s Legislature recognized it 10 years ago with a law requiring cities to prepare housing plans addressing home affordability and population growth. But almost no cities, including Salt Lake City, have done anything about the mandate.

Councilman Jergensen says the Salt Lake City Council’s attempts to develop a housing plan broke down over afford opment must estimate the number of employees it will bring to the city and include affordable worker housing for them. The city prefers that this housing be onsite, but developers alternatively can pay into a city affordable-housing fund. In February, Salt Lake City received a study of its laws that recommended a similar approach. The study, part of Becker’s review of city rules, suggests higher densities in the city center, developer incentives to prompt affordable housing and a requirement for “housing diversity” in large developments, including a mix of price ranges.

“‘Affordable housing’ is frustrating for me because it has this stigma of being project housing,” says Councilman Jergensen. “When you suggest it, the neighbors go wild. People don’t understand ‘affordable’ is a term of art. These are schoolteachers, policeman, firefighters. These are midlevel accountants. We’re just trying to provide housing because the housing downtown is so blasted expensive.”

More housing downtown, particularly along the expanding TRAX lines, also makes sense for cleaner air and less congestion in a growing city, Jergensen says. “If we don’t have available that kind of housing, we as a community suffer, morally as well as physically.”

History vs. Parking Lots

The Utah Heritage Foundation board has sent letters to City Hall encouraging the city not to tear down the State Street SROs, saying two of the buildings could be candidates for the National Register of Historic Places. The stretch of buildings, “is one of the few intact parts of downtown left,” says Kirk Huffaker, foundation executive director.

The Cambridge Hotel building began life as the Groshel Cash Register office and has ties to Salt Lake City’s early Jewish business community, according to the Heritage Foundation. The Regis building’s history as a theater dates back to 1908, when it was the Bungalow Theatre, before it became, in succession, the Lyceum, Daniels and, finally, the Rex, the stage of which is still preserved inside.

Councilman Simonsen notes that the buildings’ turnof-the-century design—with street-side display windows and housing above—is exactly what today’s “urban designers” are drawing on their architectural pads. Even the LDS Church’s City Creek project, going up two blocks north, has adopted the design, albeit on a much grander scale.

“I consider it almost immoral to be tearing down serviceable buildings while parking lots continue to grow in downtown,” Simonsen says. “This kind of housing is not easy to replace and not likely to be replaced.” With the recession, “we have growing, not shrinking, needs for this type of housing.”

But while the SROs frames remain structurally sound, the insides are crumbling. Dead cockroaches litter corners at the Regis. Plastic garbage cans sit in the cavernous hallways, which are lined with ancient, lint-covered green carpet and lit by exposed light bulbs. The floors and stairs creak with every step. Warps in the walls are patched at intervals with blotches of white, unpainted plaster.

Building maintenance got so bad that one of the three SROs, the Salt Lake Blue, had to be shut down four years ago. The number of ground-floor business dwindled under city ownership, in part Simonsen says, because the city has offered only unattractive month-to-month leases.

One of the last remaining business tenants is Musumeci’s Italian Deli. Phil Musumeci started in the Regis building 15 years ago surrounded by antique stores and designers now only remembered by an old sign on the wall. The deli "keeps me alive,” he says. But if the city shutters the SROs, Musumeci says he’ll retire. He’s stayed only because the rents in surrounding buildings aren’t affordable.

Musumeci says building maintenance has been close to nonexistent. When the city purchased the SROs, the only change was that “now the city is the slumlord,” he says. Pointing out a spreading patch of water damage on the ceiling, he adds, “They don’t do nothing.”

City Council members say that isn’t fair. They say the city never wanted to be a landlord to the poor but has invested enough to keep the buildings habitable, including purchasing a heating boiler for one building and making safety improvements, including some new doors and alarms last year. Councilman Carlton Christensen says the redevelopment agency is one of the primary sources of affordable-housing funding throughout the city. At the same time, council members acknowledge one reason the buildings linger in dilapidated condition is that the council hasn’t been able to make up its mind about what to do with the structures.

But D.J Baxter, redevelopment agency executive director, says the time has come for something to be done with the buildings—either repair them, or re-do them. “We just can’t continue patching the issues.”

The State Street buildings also house a preschool and the 24-year-old Children’s Theatre & School of the Arts. Secondgeneration theater owner James Parker says he’d like the theater to stay downtown, but it likely won’t if it must move from the current location. Parker says the city has so far been unresponsive to his proposal to purchase the building and work toward building a larger performance venue on the spot. So he’s talking to Holladay City, Bountiful and Sandy.

If the city isn’t able to find a developer willing to maintain SRO rooms, Crossroads Urban Center is asking Mayor Becker’s office to consider investing a small amount in the buildings to make them more comfortable until the economy picks up and developers get interested.

Any Takers, Again?
But the city wants to give redevelopment one last try. The city’s new advertisement takes out preferences for keeping the buildings as SROs and for preserving the old buildings. That doesn’t mean Salt Lake will be abandoning the SRO residents. The City Council gave $3 million toward a larger project that is refurbishing an old 900 South Holiday Inn into hundreds of low-income apartments, called Palmer Court. The city’s money has bought it 60 rooms that will operate almost like SROs, even allowing most with criminal backgrounds who are typically barred from federally funded housing projects. In addition, about one-third of the State Street SROs current residents may qualify for other subsidized apartments at Palmer Court.

To accommodate the remaining State Street residents and make good on a City Council promise to keep at least 150 SRO rooms in the city, the redevelopment agency is currently negotiating to purchase property for a new SRO-type project in the city. Then, to add to future SRO stock, Baxter says the authority is searching for more old motels to convert, so far without luck. The approach is similar to one adopted in San Diego, the city that became a poster child for home-price escalation in the 2000s.

While Salt Lake City was busy ripping down SROs, San Diego turned to its old hotels as the solution for the affordable-housing crunch. Having now converted all available old hotels, the city’s redevelopment agency is building, from the ground up, new 300-square-foot “living spaces” for its workforce.

The last time Salt Lake City tried to find a developer for the State Street SROs, in 2007, the advertisement was out for 18 months and got no responses. Afterward, the redevelopment agency asked two of the city’s largest affordable-housing developers why they hadn’t bid. Developers replied that they liked the site, but the proposal process was too expensive and the city’s request to keep the SRO rooms— either on State Street or with replacement properties elsewhere in the city— didn’t offer decent return on investment.

That feedback led to the new open-ended advertisement. But one Salt Lake City developer says if the city is seriously interested in a project that keeps affordable housing on State Street and preserves the old buildings, he can do it. In fact, Ben Logue, principal of LaPorte Properties, practically salivates at the prospect as he shows off old photos of the now-dull State Street buildings in their heyday of the 1910s.

“Of course they look drab now, but just look at what they could be,” he says, pointing to a photo of the old Rex Theater with its gaudy facade towering over the street.

“Its absolutely gorgeous.” Logue has been retrofitting old buildings for affordable housing for 10 years. He guts them, then builds new structures inside while preserving historic components on the facade and portions of the interior. His most prominent project is the refurbished Stratford Hotel—now named for its location, Second & Second.

Following a 2005 fire, the building was refurbished by Logue as low-income apartments. He rebuilt the facade from old photographs and pieces of the old structure uncovered by builders.

Logue would like to do the same for the State Street SROs. He plans to propose restoring the Rex Theater to its former glory, complete with nude facade statues, commercial space on the ground floor and affordable units above. Logue finances his projects through a dizzying array of grants and federal tax credits—he had 13 different funding sources for the Stratford remodel—that have allowed some of his projects to open doors without bank debt, thus with cheap rent. He proposes a mix of units as he has done in other properties, ranging from the very small and very inexpensive to still-affordable but slightly larger units, so residents can work their way into longer-term rents.

Logue bristles at the idea that "affordable" can’t also be attractive, or that "redevelopment" must mean displacing the poor. Whether or not Logue’s bid rises to the top, he appears to grasp the Council’s emerging vision.

“Some of the people in [the SROs] have been there for 20 years,” he says. “That’s their home. They’re just like everybody else.”
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