Chicago passes rules to stem redevelopment of cheap hotels CHICAGO (Reuters) - The Chicago City Council approved new rules on Wednesday aimed at making it harder for developers to redevelop cheap hotels that advocates say are often the only affordable housing available for some disabled people, veterans and seniors on fixed incomes. The city council voted 47-2 to approve the rules that have Mayor Rahm Emanuel's support and seek to make it tougher to upgrade single-room occupancy (SRO) hotels into high-rent units. "SROs can be the difference between chronic homelessness and opportunity for residents," Emanuel said in a statement after the vote. Advocates for the poor say that over 2,000 SRO units have been lost to redevelopment in gentrifying neighborhoods in the past three years, forcing some low-income residents onto the streets. "Those are people who need that housing," said Robert Rohdenburg, 55, who was homeless for nine months after the Chateau Hotel in the north side "Boystown" neighborhood shut for redevelopment. You don't want them in the streets, you don't want them in jail. The ordinance requires owners who want to sell their buildings to take steps to keep them affordable. An owner can negotiate for six months to find a buyer who will maintain the building's affordable status for 15 years or pay $20,000 per unit toward an SRO preservation fund. A city program will then provide financial incentives to owners who keep units affordable, such as certain loans and rental subsidies. Under the ordinance, displaced tenants receive $2,000 to $10,600 to relocate, depending on circumstances. Tenants would get the maximum if the building was evacuated due to unsafe conditions. SROs typically provide a single room, often with a shared bathroom, and rent for $300 to $700 a month. The city had about 50,000 SRO units in the 1970s and 1980s. Fans of the 1980 movie "The Blues Brothers" may recall Elwood's cramped room, constantly rattled by the "L" train. But most of the hotels were knocked down or converted as the neighborhoods around them got more expensive, according to advocates for the homeless, and now only about 6,000 units are left. Several hotels near the city's lakefront have been converted into high-end rentals in recent years. The Chicago ordinance is based on a stronger one passed in Los Angeles in 2008, said Mary Tarullo, a senior organizer for ONE Northside, a community group that pushed for the new rules passed Wednesday. "It is a really crucial piece of the affordable housing puzzle in Chicago," Tarullo said. Editing by Eric Walsh and Susan Heavey