The Community Redevelopment Agency voted Thursday to adopt guidelines that will allow some developers to renovate residential hotels in Downtown. The decision comes on the heels of the City Council's recently approved yearlong moratorium of such conversions.

The CRA board of commissioners, with help from the non-profit Los Angeles Community Action Network, established a set of guidelines for developers who want to renovate residential hotels (which include single room occupancy establishments) as long as no rooms are lost or the rent in the units are raised. The guidelines will go into effect after the city's moratorium on construction of the hotels is up.

"This is a very important housing preservation policy," said Becky Dennison, director of LA CAN. "It will improve and enhance the community and insure that people who live there can stay there."

The City Council approved the moratorium in May. The legislation, authored by Ninth District City Councilwoman Jan Perry, was written to give the city time to find ways to preserve low-income units in the current Downtown Los Angeles building boom. In the last 12 years, the city has lost 10 low-income hotels, totaling about 1,100 units, and officials feared that developers would set their sights on others.

Under the guidelines, developers can renovate hotels in the Central City as long as the proposed building remains an affordable housing project and will continue to operate as such for a minimum of 55 years. Developers have to ensure that no current residents are permanently displaced without being given a comparable replacement home - unless the developer is eliminating units in order to create larger rooms with better accommodations.

The policy would apply to projects that are funded by the city as well as to private development.

The move was applauded by Downtown business stakeholders, who not only were concerned over a possible prolonged moratorium (Perry's legislation included the option of two six-month extensions), but who also often struggle when legislation regarding construction rules are unclear.

"If I'm a developer and I see what I've got to do from the beginning, then there's certainty," said Victor Franco, senior vice president of government affairs for the Central City Association. "What hurts developers is when they are coming into the last stages of construction and suddenly they are being told that they need to follow all these rules."

However, Franco said, the new guidelines do cause some worries, such as if a developer is not interested in addressing a rundown affordable housing project. Such situations, he said, could result in Downtown blight, and pose a challenge for future investment.

"I hope that folks like the LA CAN will revisit this in a few years. I hope they understand that if the hotels don't get developed, they should rethink those policies," Franco said. "If we are sitting here two years from now and nothing's changed, then that's going to be a problem."

Dennison said that is the next step for LA CAN and similar organizations.

"We still need a citywide ordinance to set up guidelines for the thousands of affordable units throughout the city. After that we will work on improving the housing that we've saved," she said.

Some low-income residences have already undergone renovation without becoming market-rate residences. For instance, SRO Housing Corp. last year spent $7 million to modernize the Yankee Hotel at 501 E. Seventh St.

At Thursday's CRA meeting, dozens of Downtown residents and supporters - many there through LA CAN - packed the room, concerned equally about the decrepit conditions of some of the hotels and about losing affordable housing altogether.

Contact Kathleen Nye Flynn at kathleen@downtownnews.com.

page 18, 6/19/2006

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