Hotel conversions make room for affordable housing

Jul. 9—Housing for Bakersfield's poor, senior citizens and would-be homeless is increasingly coming from older hotels and motels as developers seize on a more cost-effective alternative to new construction that puts aging assets to valuable reuse.

Several large projects are underway by private investors and nonprofits, and at least one other is planned, that will open up residential units large and small at a time of historically tight supply in the city's rental market.

The trend may already be having the side effect of making room in the market for new hotels. Inventory built four to six decades ago is being repurposed, so there is less low-price competition for more modern properties.

It's not just private companies doing the conversions. The Housing Authority of the County of Kern and its affiliate nonprofits reported having purchased and converted three motels to a total of 155 units of long-term housing in the last three years.

"We find that most of our tenants who reside in our converted units are very happy with this housing option," Assistant Executive Director Heather Kimmel said by email.

"They are a good option for single individuals who are on fixed incomes," she continued, adding it is nevertheless important to balance different types of affordable housing in the community.

An example of an investor-financed conversion is The Rio, a former two-building, extended-stay complex just off Buck Owens Boulevard along Rio Mirada Drive.

Built in 1984 and purchased by Calabasas-based investors in July 2020, the rental community primarily serves housing voucher recipients with studios priced at $915 per month and one-bedrooms at $950. About 10 percent of residents of The Rio are private pay, property manager Melinda Clemmer said.

"These older hotels were failing as nightly rentals," she said.

Since the recent conversions work, she added, staff there contact residents' social and mental health workers, and law enforcement, as needed.

"I feel that we are making a difference," Clemmer said.

The same investment group is working to convert the 57-year-old former Howard Johnson by Wyndham with 148 units at 2700 White Lane, which last week was housing nearly two dozen people on a property planned to comprise 154 units when work is complete.

Residents at what is now called "The Blanco" typically pay with housing vouchers they receive from local organizations that work with people living on the streets.

"We want to get as many people off the street as we can," manager Javier Contrades-Barrientos said.

Units there can accommodate individuals or a couple and their child, Contrades-Barrientos noted, and it will accept people on subsidized Section 8 housing with air-conditioning, heating, warm water, plumbing and kitchenettes with a refrigerator and microwave.

The same investors are working on another lodging conversion project, he added, on Knudsen Drive.

Across town, work began recently to turn the 175-room former Days Inn by Wyndham Bakersfield at 818 Real Road into a 182-unit assisted living and memory care facility. Built in 1975, the property was purchased in February 2020 by a Culver City company called Easy Realty & Loans Inc.

None of the investors or executives behind the recent conversions could be reached for comment.

Bakersfield hotel developer Jay Patel recently broke ground on a new 110-unit Hampton Inn Suites at the former Three-Way Chevrolet property just west of Highway 99. He sees the hotel conversion trend as benefiting the local hotel market, which has long experienced average daily rates significantly below those of Southern California.

He called the conversions a "quick fix" for investors making the best of an opportunity that has arisen from rising rents. It only helps the rest of the hotel market, he said, which benefits from the removal of the bottom end of the inventory.

"It's changing the whole dynamic of the hotel market, because after COVID our rates have gone up in town, about $20 or $30," he said, adding that he is aware of half a dozen new hotel developments in the works.

"It's actually kind of bringing us back (in terms of nightly room rates) to where it should be," he said.