The man they call Sarge ambles down dimly lit hallways of the Regis Hotel where the trim is painted a bright baby blue, making his way up old creaking stairs and past small windows that offer little in the way of view and even less sunlight.

The carpets are old and worn. The air smells of stale cigarette smoke and the simple meals being warmed on hot plates behind closed doors. Empty garbage cans line the walls.

Sarge — James Sargent, 58 — hobbles to his room, his cowboy hat worn low over his eyes and his limp the result of a 1975 motorcycle accident. He opens the door.

"It's no Embassy Suites by any means. But it's nice. It's home," he says of the cramped space filled almost wall-to-wall by his bed and dresser.

It may not be home for long. The Regis and much of the rest of the block are now up for sale, their fate uncertain except that some sort of redevelopment is coming.

It's becoming a more common story in Salt Lake City's downtown and the surrounding neighborhoods: Areas that low-income residents once called home are undergoing a gentrification.

The Pioneer Mobile Home Park at 900 South and 200 East will be replaced by the Belmont Downtown Condos. A number of condo projects are popping up around Pioneer Park and elsewhere downtown.

And they're not cheap. Condos going into the Patrick Dry Goods building will start at $300,000. Howa Capital's Marmalade project, being built in a formerly blighted area of west Capitol Hill, will feature condos ranging from $284,000 to $695,000. The Church of Jesus Christ of Latter-day Saints' City Creek Center will include dozens of high-end, luxury condos.

Downtown housing prices in the first quarter of 2007 are up across the board, with fewer homes available at the lower end of the price spectrum. As more high-end housing moves into downtown, low-income residents are moving out.

Tim Funk, a housing advocate with Crossroads Urban Center, says the need for affordable housing is outpacing the supply.

"You'd have to be completely dead not to know that housing has always been a critical problem," Funk said. "It's more of a problem than it's ever been, because we're not building any kind of appreciable affordable housing."

Slum sweet slum?

Sargent is one of about 120 people living in the Regis or next door at the Cambridge, two old hotels on State Street between 200 South and 300 South. Long past their heydays of the 1920s, the hotels, along with the now-closed Salt Lake Blue, have in recent years provided cheap, commitment-free housing to hundreds of residents.

"I don't have to mess with utilities or anything like that," Sargent says. "I have one bill. That I can deal with. It's quiet; it's old; it's very convenient."