For 18 years, the city of San Diego has had a law in place to make sure that SRO hotels, often the default housing option for very low-income individuals, don't become downtown's most endangered species.
Adopted in December of 1985, San Diego's first SRO (single-room occupancy) ordinance recognized that, at that point, 72 percent of the city's SRO units had been lost to developers who demolished the grungy old hotel buildings in order to erect tourist hotels, condos and upscale shops. The ordinance demanded that every SRO unit (room) a developer converts or demolishes must be replaced, one-for-one, elsewhere in San Diego or the developer can contribute an in-lieu of fee "50 percent of the SRO hotel's worth" to the city's affordable housing fund.
Last Friday, Superior Court Judge Ronald Prager tentatively ruled that the city's SRO ordinance is invalid as it applies to the Maryland Hotel, a 200-plus room SRO slated to become a boutique hotel. Tenants were served 30-day eviction notices in December.
Prager's ruling was in response to a suit filed by a group of attorneys from Protection and Advocacy Inc., the Western Center on Law and Poverty and the Briggs Law Corporation against the owners of the Maryland Hotel, the San Diego City Council and Mayor Dick Murphy and the San Diego Housing Commission. The attorneys, who are working pro bono, are going after the hotel's owners to provide replacement housing and the city and the Housing Commission for failing to enforce their own law, instead accepting a settlement deal from Maryland owners that was a fraction of what it would cost to replace the more than 200 affordable units.
The judge's preliminary ruling disqualified the city's SRO ordinance under a 1986 law called the Ellis Act, which essentially says that a government entity can't force the owner of a residential property to stay in business. As it's written, San Diego's SRO Ordinance, Prager ruled, makes it difficult for SRO owners to get out of the SRO market.
However, 17 years after the Ellis Act was put in place, the California Legislature amended it, arguing that low-income folks were disproportionately affected by the law. Though a 1990 ruling in favor of a San Francisco SRO owner swayed Prager in his tentative ruling last Friday, Cory Briggs, lead attorney for the plaintiffs, hopes to change the judge's mind on July 8 when he and his cohorts will have a chance to argue the judge's ruling in court.
The Legislature said, "Look, here's these cases that are getting it wrong. This is not what we meant to do when we enacted the Ellis Act," Briggs explained. "So, the Legislature clarified itself, giving cities the authority to enforce local housing ordinances.
"San Diego's ordinance isn't the best," Briggs said. "It needs some work, but I don't think it's invalid. [The City Council] should have amended the municipal code, or enforced the ordinance."
Aware of the Maryland owners' plans to convert, the City Council attempted to put in place an emergency SRO Ordinance in December, but it failed by one vote. Currently, city staff is working with SRO owners to draw up a permanent ordinance, which was expected to come before the council in July, but has been postponed until the fall.
Deputy City Attorney Armando Mendez said the city has not admitted its ordinance is faulty and emphasized that Prager's ruling was tentative. However, when asked what the city's position would be if the judge's ruling stands, Mendez said the city would, at that point, concur.
The Housing Commission, on the other hand, is more willing to admit that the city's ordinance needs an update-and fast. "We knew the SRO ordinance was unclear," said Housing Commission spokesperson Bobbie Christensen. "That's why we tried to get the emergency ordinance passed [in December]."
Christensen said that prior to the Maryland Hotel lawsuit, the commission was reluctant to point out the faults in the ordinance for fear that downtown developers might take advantage of SRO hotels located on prime real estate, potentially forcing very low-income tenants out onto the streets.
"When they sued us, we had to defend ourselves," she said. "They forced [us] to admit that, in fact, the SRO ordinance was poorly defined."
Ultimately, Briggs said, it's the city's responsibility to protect its most vulnerable residents. But, he added, "I'm not so sure the City Council has the political will to deal with this issue in a timely manner. They're more concerned about bringing in new development than they are about providing housing for people who need to live here and service the new businesses. Whatever they say to the contrary is unbelievable because their actions belie their words every step."