Renovating residential hotels: one answer to affordable housing

The Clayton Hotel, inconspicuous even with its fresh coat of pale yellow paint and handsome red trim, hugs a steep hill leading into the heart of Chinatown.

At noon, businessmen and women from the nearby financial district pass the Clayton's street-level storefronts as they head for dim sum or other delicacies. Inside the recently renovated residential hotel, two silver-haired women stir a savory soup for their own lunch in one of the immaculate communal kitchens.

Residents in the 82-room Clayton Hotel enjoy better living conditions than many other tenants occupying single rooms in residential hotels throughout the city. Rooms in the Clyaton are small but they are clean and modernized due to the efforts of the Chinese Community Housing Corporation (CCHC), an organization dedicated to improving the quality of housing for poor and elderly Chinatown residents. The Clayton Hotel was the fist residential hotel project in its building acquisition and renovation program begun in 1978.

''One of the ironies of Chinatown is that its commercial land values are extraordinarily high, yet the people who live here are quite poor,'' says Howard Gong, development director of CCHC.

Since immigrants tend to move out into other communities as they gain new language and job skills, Chinatown primarily serves recent immigrants and the elderly, he explains. Many recent immigrants live in single rooms of old residential hotels, which make up about half the housing stock in Chinatown, one of the oldest areas of the city. It's not unusual, he says, to find families occupying single rooms or a suite of rooms renting for $75 to $200 per month.

Older people often stay in Chinatown because social services, such as meal programs, and Chinese-speaking friends are there, according to Mr. Gong. Many choose to remain in the community even if they have the option of moving out to the suburbs to live with their children's families.

High land values, due to Chinatown's close proximity to the financial district and Nob Hill, are putting a crunch on affordable housing. Speculators and developers have put increasing pressure on the community as competitive bidding drives property values up and housing units are lost to office conversion.

''In 1975 and '76 we began to notice the impacts of downtown development in Chinatown and other related neighborhoods,'' says John Merit of the national Trust for Historic Preservation in San Francisco, which helped fund the Clayton Hotel renovation. The Historic Trust is concerned not only with protecting Chinatown as an eligible historic district, but with preserving the community's culture.

In another part of town, the low-income Tenderloin district is experiencing a similar loss of affordable housing as new luxury hotels are built on its fringes.

San Francisco is not alone in losing its bottom rung of unsubsidized, low-cost housing as residential hotels are demolished or converted to more lucrative commercial uses. Yet it is one of the first cities to attempt to ban conversions and help owners maintain their properties. Current city policy requires downtown developers to provide some measure of affordable housing (based on a formula) for every new luxury of office unit.

''Residential hotels are the last and most affordable housing for poor people in any city,'' says Brad Paul of the non-profit North of Market Planning Coalition in San Francisco, who has studied low-cost housing in several United States cities.

Single rooms in residential hotels generally rent for about half the cost of a studio apartment. Meager as the living conditions might be, they are often the last alternative before living in the street.

Residential hotels do offer some amenities such as a desk clerk, security, a central location, and a built-in social environment. Residents often dine out together at local restaurants.

Considering the staggering replacement cost of single-room housing, Mr. Paul points out, residential hotels can be veiewed as resources to provide more affordable housing with fewer dollars. ''From a humanitarian point of view, it makes sense to rehab buildings and let people remain in their neighborhoods,'' he says. ''For elderly people it lessens the trauma of losing their homes, and it saves cities the cost of relocating them.''

To avoid displacing long-term residents, the Clayton Hotel renovation, completed last March, was carried out with two-thirds of the building occupied throughout the process. Since about one-third of the rooms are occupied by short-term residents, enough vacancies were generated to free an entire floor for the renovation which began in January of 1982.

As work progressed from floor to floor, young people participating in an after-school program sponsored by a Presbyterian church in the neighborhood helped move furniture and possessions for elderly residents to another floor when necessary.

The $450,000 renovation, paid for largely by state and city funds, included replacing the plumbing, adding new sinks to the rooms, replastering, adding new flooring and shared bathrooms, recarpeting the halls, and providing a kitchen and living room for each floor. A new community senior-citizens center was built in the basement. Funds from the National Trust paid for exterior detailing work, a hot-water solar system, and new office and resident manager rooms.

Because of a substantial subsidy up front, the building is self-sustaining financially. Rents from the four storefronts and 82 rooms (at $105 per month) pay for building maintenance.

''All the economic arguments are there [for renovating residential hotels],'' says Mr. Paul. The North of Market Planning Coalition is currently working on rehabbing four residential hotels in the Tenderloin district in conjunction with the city, local banks, and a private Los Angeles developer with expertise in low-income housing. Developers of the luxury hotels going up in the Tenderlion are helping fund the $12 million project expected to be completed by the end of this year.

''The city hopes this project model can be repeated,'' says Mr. Paul. ''It's the public/private partnership that is talked about but rarely happens.''

According to a report by Mr. Paul for the National Trust, Portland and Seattle were Pioneers in preserving and renovating residnetial hotels. Their examples in providing cost-effective housing for the poor and elderly has prompted other local and state governments, particularly in New York and California, to look into similar projects.

In Portland, nonprofit organizations and private owners working with the Portland Development Commission have rehabilitated several hotels for between $ 500 and $5,000 per unit as compared to $50,000 to $100,000 per unit cost of federal Housing and Urban Development (HUD) projects for the same purpose.

According to Mr. Paul, the high cost of HUD housing is due to stringent standards, which include requiring a kitchen and bath in every room. In addition to the initial outlay, HUD pays building owners the difference between the one-fourth of the resident's income and the market rent of the unit.

In contrast, he says, renovated residential hotels offer housing at an affordable price kitchen and bath facilities are shared.