The City of Vancouver has filed expropriation notices for two single-room occupancy hotels, the first step in its attempt to transfer the properties to public ownership.

The notices were filed for the notorious Regent and Balmoral hotels, both of which were closed with help from the province. The Regent was closed last month due to what the city called "decades of underinvestment and mismanagement by the building owners." 

The building is owned by the Sahota family, as is the Balmoral, which was condemned last year.

Both buildings had structural and safety concerns, representatives of the city said in a statement.

"Despite years of enforcement efforts by the City and hundreds of bylaw violation charges presently before the courts, the owners have not made the basic investments necessary to maintain safety and an acceptable standard of living for tenants in these two buildings," the statement said.

Janice Abbott with the Atira Women's Resource Society, the non-profit that took over the Regent earlier this year, referred to the state of the building as a nightmare.

"When you're inside it feels like they've been rotting forever," she told CTV Monday.

"There were areas of the building where there was so much water ingress the floors were spongey, so you would literally sink into the wooden floors in the back corners of the building. Most of the washrooms weren't working. There were people sleeping in the hallways."

Prior to the expropriation notices, the city had made an offer to buy both hotels. Officials did not provide details on the offer, saying only that the price was based on independent appraisals.

CTV News reached out to the Sahotas, and while our calls were returned, they ended abruptly when the caller found out who was on the other end.

The city plans to transfer ownership, then use the land to provide safe housing for those in the Downtown Eastside.

It is still not clear what will happen to the buildings. Despite being run down, both have heritage values.

"This is the first instance in which the city is looking to expropriate property for the purpose of providing housing," deputy city manager Paul Mochrie said.

"We're examining the opportunities to either renovate or re-develop those properties."

Following the notices of expropriation, the building owners have a month to request an inquiry.

If they do make the request, an officer will be appointed and the case will be reviewed to determine if expropriation is necessary to meet the city's goals. The inquiry officer will provide a recommendation to council following a process that could take several months.

"I worry that the expropriation will take a long time … During that time, the buildings will continue to rot," Abbott said.

If the Sahotas do not request an inquiry within the month, the case will go directly to council. If council approves, the city will buy out the owners.

The building owners will then have one year to file an application to request additional payment, and a court hearing would determine whether the city is required to pay more.

The hotel closures resulted in more than 300 of Vancouver's lowest income tenants needing new homes. Many were moved to the Jubilee Rooms, two adjacent buildings on Main Street near Cordova Street that were purchased by the province for $12.5 million.

Units in the buildings are rented at shelter rates at or below the maximum $375 per month.

Under the province's Residential Tenancy Act, it is the building owner's legal obligation to provide tenants with compensation and help with relocation. The city said it would work with other partners to provide supplemental support and to ensure that the hotels' former residents are properly compensated.

SROs are considered a key area of the city's strategy to improve the living conditions of low income residents of Vancouver. City council has directed staff to explore opportunities to improve private SROs.

Over the next decade, Vancouver plans to replace half of the remaining SROs – about 2,000 rooms – with social and supportive housing.

With a report from CTV Vancouver's Maria Weisgarber