Pilsen's only single room occupancy hotel Lugo Hotel will be saved, helping dozens of residents stay in changing the neighborhood. View Full Caption DNAinfo/Stephanie Lulay

PILSEN — Pilsen's only single room occupancy hotel will be saved, helping dozens of low-income residents stay in the rapidly-changing neighborhood.

The Resurrection Project has purchased the three-story Lugo Hotel, a longtime SRO at 2008 S. Blue Island Ave., the Pilsen non-profit announced this month. The acquisition will help current Lugo Hotel residents, many of whom are on fixed incomes, stay in the building.

The future of the 54-unit building was uncertain after the building's co-owner William Epmeier made plans to sell it, listing the property for $1.1. million. Residents were notified that the SRO would be put up for sale in September 2015, according to The Chicago Reader.

Pilsen neighbors feared that it could be torn down or redeveloped into a high-priced apartments, leaving the building's residents — many of whom have fallen on hard times — on the brink of homelessness, said Raul Raymundo, Resurrection Project CEO.

"If the contractor had bought it, everybody would be out of here. That would be like 60 people out on the street," said Jesse Lopez, a Pilsen native who has called Lugo Hotel home for four years. The 59-year-old is on disability and works part-time.

But with financial help from Community Investment Corporation, a lender that specializes in acquisition and rehab of affordable rental housing, The Resurrection Project was able to buy the Hotel Lugo property.

Under the city's Single-Room Occupancy Preservation Ordinance, Resurrection Project officials now plan to rehab the property and rename it Casa del Sol. Residents in the building will continue to pay about $350 per month — the same amount they previously paid to Hotel Lugo owners — to live in the one-room units.

"Today, Casa del Sol residents do not have to worry about being forced out due to higher rents. Instead, they will continue to have access to affordable housing," Raymundo said.

Lugo Hotel, a longtime SRO at 2008 S. Blue Island Ave., provides single-room bedrooms for up to 54 residents. [DNAinfo/Stephanie Lulay]

As new developments emerge in changing Pilsen, residents are increasingly concerned about the rising cost of housing. The upward trend in real estate values may eventually force local residents out of their homes because they are unable to afford the high rents, Raymundo said.

Casa del Sol residents include veterans, people with disabilities, mental illnesses and low-income students, according to Diana Pando, Resurrection Project spokeswoman.

Monica Mosqueda came to Lugo Hotel after she could no longer afford the rising rent in her Pilsen apartment.

“SROs give working class people a dignified and affordable place to live,” Mosqueda said. “If a developer had purchased the building, I don’t know if I could find housing that I could afford in the Pilsen community.”

The Resurrection Project also plans to provide Lugo Hotel residents with access to social services including workshops that will help residents develop budgets and learn about other affordable housing options. Casa del Sol will also be working with the San Jose Obrero Mission, which helps homeless women, as the mission transitions services from their Little Village location to Pilsen.

The city's Single-Room Occupancy Preservation Ordinance supports the preservation efforts of SRO properties through investment and various financing mechanisms that creates and preserves affordability for low and moderate income households.

Since 2011, about 1,600 SRO units have been lost, according to the Mayor's office.

Founded in 1990, The Resurrection Project has developed 733 units of affordable housing in Pilsen and other neighborhoods.

The acquisition will help current Lugo Hotel residents stay in the building. [DNAinfo/Stephanie Lulay]

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