Dennis Backlund spends most nights lying awake wondering where he's going to live. Soon the day will come when he must leave his longtime home at the President Hotel Apartments as part of a mass eviction of every tenant of the historic, 75-unit building in downtown Palo Alto.

"I don't know what I'm going to do. I never, ever dreamed that something like this could happen. This was going to be the place where I spent the rest of my life. That is what I thought," said the 76-year-old, who has lived in his 300-square-foot apartment at the President for the past 37 years. Now he faces leaving not only his home but possibly the community where he was born.

Backlund said he can't move just anywhere. He lives on a fixed income, doesn't drive and has to use a walker to get around, so he needs a place that's affordable and within short walking distance to food and other amenities.

He said Lytton Gardens, an affordable-housing development for seniors in downtown Palo Alto, looked promising until he learned that the complex doesn't have any openings.

"They weren't even taking any new names for their waiting list for three more years," he said.

Even East Palo Alto, a community once considered the last bastion of affordable housing in the Bay Area, is out of reach for many, he added.

"It just seems unbelievable, but that is the situation," Backlund said. "It's a rental crisis right now, particularly if you're elderly and disabled."

Backlund, a retired historic preservation planner for the city of Palo Alto, said his love of historic buildings is part of why he's stayed so long at the 1929 Spanish Colonial-style President Hotel, which he said is the city's largest historical resource.

"A few months ago, I would go to bed every night and just serenely go to sleep and look around the apartment at all my bookcases, with about 2,000 books of literature, art and philosophy, and feel so much at home," he said.

"It was just such a wonderful feeling, and then the announcement of the sale came, and it was just the feeling of desperation. I went into a state of depression and took medication for it," he said.

Backlund said he believes his most viable option right now is to reach out to the property owner and ask for a special exemption that will allow him to remain in the building, which is the only place he can find, at the moment, that addresses all of his special needs.

• VIDEO: President Hotel resident Dennis Backlund reflects on uncertain future

Backlund, along with the other tenants living at 488 University Ave., received notices under their doors on June 12 informing them that Chicago-based hotel developer Adventurous Journeys Capital Partners (AJ Capital) had purchased the building and intended to convert the six-story property back into a hotel by 2020. The tenants would have to vacate their apartments by Nov. 12, the notice stated.

Over the past five months, the plight of the President Hotel tenants has put a spotlight on the difficult, and sometimes hostile, rental market in Palo Alto. There's been public outcry over the loss of affordable rental options, heated debates over whether the city should do more — or if it's trying to do too much — to aid renters, and questions raised about the legality of converting the apartment building back into a hotel in the first place.

The proposed conversion has been on hold since July, when city planners reviewed the property and determined that a hotel at that location is impermissible based on a code provision that pertains to "grandfathered" buildings — those that do not comply with the zoning code but that are allowed to retain their current function because they were established before the code was developed.

Designed by Birge Clark, the President Hotel building was constructed in 1929 to be a hotel but was converted into an apartment building about 50 years ago and has served that function ever since, pre-dating the zoning code.

The determination prohibiting the conversion came one month after City Manager James Keene suggested at a City Council meeting that the new property owner could move ahead "by right" with a hotel conversion, forcing the eviction of residents.

AJ Capital is still in talks with the city. No applications, however, have been filed for the project at this time, according to interim Planning Director Jonathan Lait.

Despite the building's uncertain future, tenants still face eviction because there are no laws in place to protect them.

"I feel that this situation with the President Apartments has opened a can of worms," said Katja Priess, a long-time tenant who is moving out of the building this week following months of uncertainty over her future. She has been sharing a one-bedroom corner unit with her daughter, two birds and a dog.

In an effort to help tenants displaced from the President, the city passed an emergency law in August that requires landlords citywide to provide relocation assistance based on the size of the unit. Tenants who are moving out of the President after the law went into effect on Nov. 1 are legally entitled to between $7,000 and $9,000 in relocation assistance from the landlord. AJ Capital had initially offered tenants $3,000.

Some tenants have moved to Redwood City and other surrounding communities or relocated as far away as Napa. At least two have found other rental units in Palo Alto, according to tenants who spoke with the Weekly. Those who found rentals in Palo Alto said they are paying significantly more at their new apartments. One resident is paying $500 more a month for a two-bedroom apartment that's equivalent in square footage to the person's former apartment at the President. The other is paying $700 more a month for a studio apartment — $2,600 (not including utilities) compared to $1,900 a month at the President, which did include utilities.

One tenant said she looked at a 100-square-foot cottage that was offered to her for $2,000 a month. She didn't take it.

Others said they planned to stay with friends and bounce from one couch to another while trying to figure out how to stay close to Palo Alto so they don't lose their livelihoods along with their apartments.

But even given the lead time, 40 or so tenants still remained in the building in October, with only a few weeks remaining until the move-out deadline. They were hopeful at that time that they would be able to finalize weeks-long negotiations with AJ Capital to stay in their apartments longer since the company's plans have been delayed, a source close to the negotiations said.

Late last week, City Councilwoman Lydia Kou confirmed that AJ Capital has offered tenants a temporary extension allowing them to stay in their apartments through January.

The new lease agreement, offered on Oct. 23, provides rent reductions as well as financial incentives to those who choose to move out before January. Tenants also are eligible for a second extension that will allow them to remain in the building until June 16, but only if AJ Capital can resolve zoning issues with the city before the end of the year, allowing the developer's project to move forward, according to another source.

The agreement also includes a provision prohibiting tenants from contesting the application process as the developer negotiates with the city or from taking any other action that would potentially hinder or delay the project, the source said.

Kou said she had been keeping track of some of the tenants with special needs to make sure they were finding other housing, but now she is no longer able to do so. AJ Capital allegedly has placed a "gag order" on tenants, she said.

AJ Capital declined to comment for this story. The agency Autotemp, with which AJ Capital contracted to help tenants with the relocation process, also said it could not comment when asked how many tenants the agency has helped relocate.

Architect Iqbal Serang, who moved into the President 30 years ago and lives two floors below his former wife and his daughter, said most tenants signed the extension agreement, but a handful did not.

Serang confirmed that he and other tenants had been negotiating with AJ Capital to either stay in the building permanently if the company decided to move ahead with some sort of mixed-use project or at least have their leases extended until any kind of renovation work began.

"We were basically negotiating an extension with the hopes that we would all eventually be able to find a reasonably equivalent space in Palo Alto," Serang said. "Their deadline seemed kind of forced, and we felt pretty pressured."

Serang said the agreement that AJ Capital ultimately offered just two weeks before the move-out date contained contingencies that were very different from what the tenants had negotiated. He would not elaborate further.

Many of the tenants were in shock but felt that the deal came out so close to the move-out deadline that it would be better to sign it rather than face eviction, he said.

Serang said he is glad to be able to stay in the building longer but remains confused over having to leave at all.

"I am very conflicted as to why it's still possible for me to be uprooted from my home after living here for close to 30 years. This is my home. This is my neighborhood, and yet it's that easy to kick someone out," he said. "This issue is not just an issue for the President Hotel Apartments, it's an issue for all of Palo Alto. It's an issue that is going to occur again and again and again in different ways."

The forced relocation has pushed artists, teachers, Stanford University professors, former city employees, tech workers, retired seniors, entrepreneurs and dozens of others in the building into a market that's already grappling with a severe housing shortage.

Palo Alto continues to rank close to the bottom in Santa Clara County for housing production: The city is 14th out 15 cities in the county when it comes to meeting its state-mandated Regional Housing Needs Allocation, according to a report the Santa Clara County Civil Grand Jury issued in June. At the start of this year, the city adopted a plan to produce 300 housing units annually to address its housing shortage. So far, it has only approved one major development with 57 units. The loss of the 75 units at the President will more than offset that project.

While finding housing in Palo Alto and along the Midpeninsula is challenging, finding something equal to the units at the President is even tougher.

The former hotel includes six shops on the first floor — including the President Barbershop, several eateries and a clothing boutique — along with 70 studio apartments and five one-bedroom units ranging between 250 and 800 square feet on the upper five stories. The smaller floor plans mean lower rents — between $1,200 and $2,400 a month — which fall below the city's median rent, calculated by the real-estate website Zillow at $2,870 for a one-bedroom apartment in September. While the monthly rent is relatively low for Palo Alto, the units are not considered part of the city's affordable-housing inventory.

A quick search on Zillow on Nov. 5 showed the most comparable housing available in Palo Alto were 11 studio apartments. Of those, only two were under $2,500 a month and located downtown.

There's not really anything else similar in size, location and cost in the city, said tenants, who've been scouring the market.

The President actually represents the type of housing that the council has been trying to encourage in recent months: units that are smaller and thus, presumably, cheaper.

Besides location and price, tenants said the building has fostered a tight-knit, culturally oriented community within its walls that will be difficult to find elsewhere.

"The President never advertised apartments. They were rented by word of mouth, and so when people left, it was their friends who moved in, and it just kind of gradually evolved into a place where artists, musicians, writers, people like that lived here," said Backlund, the longest-remaining tenant.

"The culture here is passed on from person to person, and so, the character of the building here has remained remarkably constant even when the people have changed. ... And with the way the building is designed, with all these doors that face into inner corridors, and the common mailroom and lobby ... the building just physically encourages people to get together."

Serang said his life has been turned upside down since receiving the eviction notice under his door in June.

He said he's stressed out constantly, doesn't get regular sleep and recently contracted shingles.

The mood in the building has changed, too, he said. There are no more rooftop get-togethers, potlucks or any of the other regular activities that used to bring neighbors together in the halls.

The only activity is "the busting up of all sorts furniture being carted out" and shoved into junk trunks out back, he added.

"Nobody seems to have the time or the inclination to have any discussions," he said. "This thing has us almost falling apart."

Backlund said he checks the mail room to see who's still in the building.

"The mailbox labels get taken off, and that's how you know someone's gone," he said.

Serang said it's a huge fear and worry as to what is going to happen next.

"If you have enough money, perhaps you can afford to find another place in one of these bigger buildings that charge 50 percent or 75 percent more, but I don't have that luxury. ... I may be the first created homeless person from the President," he said.

Until last week, Priess, a language arts teacher who holds classes out of her apartment on the fifth floor, remained unsure of where she would be after Nov. 12.

"It's really complex for me," Priess said. "I have to find a place that allows pets. I have a daughter, and I have a business. I can't move just anywhere."

Priess said she had hoped that AJ Capital would extend her stay at the President.

"I was supposed to leave, then I started to really fight it and get an extension, and since nothing has ever really been confirmed, it's like this feeling of floating around and not really knowing when we really have to leave," she said last month. "I try to keep it as undramatic as possible, but it is definitely impacting me, especially in the back of my mind.

"I've sorted out some things I don't need, so if I have to move in a week, we can pack everything up and leave, but it feels a little bit like the calm before the storm."

Priess was pondering whether she would have to move back to Germany with her family if she couldn't find a new place close to her students.

"Germany is where I have my family, where I can stay for a while and build up my life, but it's something I really don't want to do. It's really hard," she said.

During the final weeks before the impending move-out day, Priess purchased fresh flowers and placed them around the apartment.

"I want to enjoy each and every moment that's left here," she said. "The first time I saw this apartment, my parents were visiting from Germany. We opened the door, came in and saw this view of the rooftops out of the window, and said, 'This looks just like Paris!' ... It felt like this was home."

After speaking with the Weekly, Priess found a vacant unit in a four-plex just four blocks away from the President and this week starting moving out.