On a recent Thursday, a handful of lodgers gathered on a downtown Sacramento sidewalk in front of the Hotel Sequoia, talking about the dead man inside.
Past a fading turquoise wall in the minuscule lobby, police made their way to the room upstairs where a well-liked character named Andy Christensen died sometime during the night.
Christensen was a carpenter who loved to hang-glide, and twice was the cyclist on winning teams in Eppie’s Great Race, according to his stepmother Della Christensen. His team broke the Eppie’s course record in 1984 by several minutes.
He was also a longtime alcoholic, said Amanda Hubbs, 54, a friend of Christensen’s who lives at the Sequoia on K Street. His stepmother said his addiction problems began when he was a teen.
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By his last night at the Sequoia, he was 59 and unemployed. He had been “off and on homeless” for years, said Christensen, who had not spoken to him in nearly a decade.
“It’s not a good story,” she said. “He was a wonderful, wonderful man when he wasn’t drinking.”
Tales of hardship are common at the Sequoia, just down the block from the new Golden 1 Center. Like other residential hotels in Sacramento, it’s long been a den of “last resort,” said manager and maintenance man Mark Salaber, 59, who has lived there for nine years.
That may soon change as Sacramento recently loosened protections for down-and-out residents who want to remain downtown.
The city requires that 712 downtown rentals remain with low-income guidelines near public transit and services, mostly clustered in a handful of buildings intended to serve people like Christensen. They historically were converted hotel rooms that lacked a bathroom or kitchen, often called single-room occupancy units or SROs.
But the city recently allowed more rentals to qualify toward the required room count – including some units at trendy places like The Warehouse Artists Lofts. That makes it easier for developers to convert more rundown SRO hotels like the Sequoia into studio apartments with a kitchen and bathroom for an up-and-coming demographic.
Many newer tenants are minimum wage workers needed to support revitalization, and they qualify under the income rules for single-resident occupancy slots. The switch in tenant demographics between old SROs and new studio apartments can be seen a few blocks from the Sequoia at the refurbished Ridgeway Studios on 12th Street.
A few years ago, the Ridgeway was “way worse” than the Sequoia, said Wayne Shanko, janitor at the Sequoia. He lived there before it closed for renovation in 2007. He remembers the Ridgeway in its last days with communal bathrooms that were out of order and an elevator that was closed because a resident tried to set it on fire.
Now, its cozy lobby has potted plants and a gray loveseat with crisp, white pillows. There’s art on the walls – cityscapes and nostalgia from the building’s Gold Rush history, and fliers for cable service on a side table. The wide staircase has been restored, but a new elevator carries tenants up to their studio apartments, each with its own kitchen and bath.
Ana Navarrete, a 30-year-old barista at a nearby Starbucks, lives in one of those redone apartments. Her double bed faces a bay window rimmed in Christmas lights where a streetside gingko tree fills the frame. She likes to see the foliage when she wakes. At $475 a month, Navarrete said this is the best place she’s ever lived.
“It’s super homey to me,” she said. “I love it.”
Navarrete, who recently signed a lease for her fourth year, said her building is so quiet that when she first moved in, she felt like she was the only person living there. She said most of the tenants are a mix of older people and “waiters, servers, baristas like me.”
Building manager Stephanie Brians said she estimates less than a third of her 22 units are rented to people on Social Security. She describes most tenants as part-time or minimum-wage workers, some in school and a “lot of service industry” employees. Brians said tenants go through a screening process “pretty typical and comparable to any other apartment complex,” but cannot make more than $20,040 annually for a single person.
None of the original tenants returned when it reopened, she said. Shanko estimates that about a half-dozen Ridgeway renters relocated to the Sequoia. Residents are offered relocation payments and assistance finding new housing if their SRO closes.
The Sacramento Housing and Redevelopment Agency, which oversees single-resident occupancy units downtown, said it does not have demographic data on residents of SRO hotels, and leaves tenant screening to property managers.
The Ridgeway was purchased and revamped in 2012 by developer Ali Youssefi and his family’s company, CFY Development. Their firm specializes in affordable housing projects and also serves as the property manager for the Sequoia.
CFY owns 3,500 units throughout California, Youssefi said, but in recent years as Youssefi has taken a larger role in the business, he’s focused on his hometown.
He’d like to buy the Sequoia building, which was owned by a former business partner of his father, and do what he did to the Ridgeway – modernize the building, in part by cutting the number of rooms to make the units bigger. The Ridgeway had 58 units prior to renovation.
Under the new city ordinance, developers have a longer period of time – seven years – to find replacement units to fulfill the quota.
Currently, Sequoia’s 90 rooms rent for $405 a month with a shared bath and kitchen, and every available one is taken, said Salaber. Most tenants are on Social Security or other types of public assistance, and he estimates that only about 10 residents are employed.
Youssefi said he’s had an architect look at the Sequoia and thinks he’d likely winnow it down to 45 units, each about 400 square feet with kitchens and baths.
The government-regulated rents for such affordable housing projects would remain low like Ridgeway, with tenants paying not more than 40 percent of the average median income in the Sacramento area, which includes El Dorado and Placer counties.
A smaller number of tenants in a rent-controlled building would typically result in less income for the owner. But Youssefi would make money largely from federal tax credits awarded to affordable housing projects that he could resell on a secondary market, he said. The company would also continue to manage the properties and collect rents.
“I’m all about trying to provide low-income tenants with safe, stable, quality places to live,” said Youssefi. He said updating the units is a “quality of life” issue, turning dilapidated dead-ends into homes.
Few people argue that Youssefi’s renovation of the Ridgeway didn’t improve the property or the lives of the tenants inside, but the conversion of such places concerns advocates for low-income residents who have long relied on affordable housing in the downtown core.
“There’s just whole categories of people who struggle to get into housing,” said Michelle Pariset of social justice group Organize Sacramento. She said the switch from units like the Sequoia to those in the Ridgeway may be good for a downtown in the middle of the most energetic development boom in a decade and looking to rebuild itself as a residential center. But it’s also a challenge for the elderly, disabled and those on the lowest economic rungs.
She points to long-term homeless people who don’t have the money or background to appeal to landlords, or hard-to-help populations like those recently released from prison or with mental illness or addictions.
“None of those people are going to be served,” she said. “The city is telling us what it values ... They value young people, workers, artists, more hotel rooms for the arena, and are kind of paying lip service to wanting to do anything for the homeless.”
The reality of downtown displacement is part of a larger “affordable housing crisis,” said Darryl Rutherford of the Sacramento Housing Alliance. Rutherford said he expects a “ripple effect” caused by migration out of the core.
“We just don’t have the supply to meet the demand right now,” Rutherford said. “You are going to see ... throughout the city that other people can’t afford to live where they are.”
During the past 10 years, rents in Sacramento have increased from an average of $859 a month in 2006 to $1,173 a month in 2016, according to a county report. In the same period, vacancy rates have plummeted from 8 percent in 2006 to 2.4 percent this year.
Mayor-elect Darrell Steinberg said he has “mixed feelings” about keeping bare-bones SROs in their current condition, “because on the one hand, it is housing.” With a lack of available space, something may be better than nothing, he said.
Steinberg has long advocated for more affordable housing, as well as housing that comes with services such as counseling and drug treatment. He hopes to work with the Sacramento Housing and Redevelopment Agency after he takes office Tuesday to provide higher-quality options aimed at the homeless and near-homeless rather than those already in stable living environments.
He also wants to increase permanent supportive housing that ties services and housing together, but the city has lacked enough money in recent years to pursue those expensive and time-consuming efforts. The flow of cash for affordable housing dried up once the state ended redevelopment programs in 2012 – when Steinberg was president of the state Senate and agreed to a deficit-reducing demand by Gov. Jerry Brown.
Steinberg pushed hard last year to secure state funding for housing that includes mental health services, but it will likely take years to build anything significant.
Councilman Steve Hansen, whose district includes the Sequoia and Ridgeway, is less conflicted about replacing existing SROs with housing for workers.
“The traditional SRO is a bad way to live,” he said. “They weren’t environments that you’d want a relative or a family member to stay in.”
Hansen said that, like Steinberg, he sees a need for housing that targets the current residential hotel population, but that it should be higher quality. He said funds could come from leftover redevelopment money currently used for Mayor Kevin Johnson’s Growth and Innovation Fund, which Johnson envisioned as awarding about $1 million in grants to local entrepreneurs each year in the hopes of growing a local technology industry.
Hansen said Lavender Courtyard, a planned development for senior members of the LGBT community at 16th and F Streets, is an example of the kind of housing he would like to see for vulnerable people downtown. If built, it would have 53 units for people over 62. Lavender Courtyard is still looking for funding.
Youssefi said the downtown housing conversation should be about more than the current residents of SRO buildings. While public funds exist for low-income housing and private money is available for high-end projects, the middle class is often neglected, he said, “creating a downtown that is providing housing for everyone except them.”
While he moves forward to turn the Sequoia from shabby to chic, he’s also looking at ways to finance midrange options because he thinks downtown needs “many, many more units” in all rent ranges.
As the conversation continues, so do the changes. The renovation of the Sequoia could start next year if all goes well, said Youssefi.
Shanko, from his perspective of having lived in both buildings, supports rehabbing the Sequoia. But he said he doesn’t know where current residents will wind up.
“(A) lot of these people are going to disappear in different directions,” he said.