Angry tenants are refusing to leave a rundown Calgary hotel that health inspectors say is unfit for human habitation.

The King Edward Hotel was ordered shut after a report last week by the Calgary Health Region showed potentially toxic mould and other unsanitary conditions posed a health risk. It ordered all 24 tenants to get out by 8 a.m. Friday.

But the people who pay $300 a month for their cockroach-infested digs say they'll be left homeless. They're threatening to either squat in the dilapidated building or camp out at City Hall to protest against the decision. Several of them are elderly or disabled and say they have nowhere else to go.

The city has set up a crisis centre to try to relocate them. It has offered to pay for moving costs, food vouchers and some other expenses of getting a new place. The Salvation Army Centre of Hope has also offered shelter.

But 22-year-old Bryan Taylor, who lives in the hotel, said he'd rather sleep at City Hall before sleeping in a hostel.

"We're not leaving. We're going to stand up and fight and they can arrest us," he told the Calgary Sun.

The city owns the King Edward but leases it to Gerry Garvey for $10 a year.

Garvey said he lost $200,000 trying to run the 99-year-old building, and he said he understands why the city was shutting it down. He said he would apply to the province in September for money to renovate the building into an affordable housing facility.