Salt Lake City is ready to put for-sale signs on three downtown low-income housing buildings while it helps fund other housing just outside downtown.

The City Council, acting as the board of directors of the city's Redevelopment Agency, voted 5-2 Tuesday to put out a request for proposals, seeking developers to buy and redevelop the historic Salt Lake Blue, Regis and Cambridge hotels on State Street between 200 and 300 South.

Those buildings currently house about 115 people in single-room occupancy units, or SROs. The housing allows tenants to rent rooms on a weekly or monthly basis without signing leases or submitting to background checks.

The board also voted unanimously to provide up to $3 million to help The Road Home renovate the Holiday Inn at 999 S. Main into a mix of SRO and other housing for low-income individuals and families, including a number of units to help the chronically homeless work their way out of the shelter.

The vote to seek a developer to replace the State Street SROs puts a preference on builders who would save the historic buildings and renovate them as part of the plan.

The two members who voted against that plan, Soren Simonsen and Jill Remington Love, preferred an option that would have required the buildings be saved.

"There are so few buildings downtown that are historic," Love said. "It's our obligation to try to save them."

Simonsen said a developer could use money that would have been used to demolish the buildings to put them to creative new uses instead, including ways to solve "the lack of funky, eclectic space for local merchants."

But Councilman Eric Jergensen said stating a preference for preservation without demanding it would give developers flexibility to come up with a design that would be of most value to the city, including the possibility of working new SRO housing into the plan.

Council members emphasized that while the Holiday Inn renovation will provide new affordable housing in the city, it cannot be seen as a replacement for the niche filled by the State Street SROs.

Among the differences, the Holiday Inn renovation will require tenants to go through a minimal background check. Because it will house families as well as single men and women, tenants will be screened for convictions on sex offenses.

City staff members know of only three current tenants of the State Street SROs who would not qualify.

"We are very committed to the occupants on State Street," Road Home executive director Matt Minkevitch said. "We'll work with folks to find a place in the community where they are accepted. It's not easy, but we will do it."

Another difference between the State Street SROs and the Holiday Inn is that the new housing units will include their own small kitchens and bathrooms. Residents of the State Street SROs now share public bathrooms..