Yes, it's another "SoHo" knockoff real estate invention.
No, it has nothing to do with whores. "LoHo" and "NoLiTa" do sound a bit scandalous, though.
FORWARD : FastForward
... "This neighborhood's now called LoHo," said the owner of the Forward Building, Debbie Lau, referring to a pun on the upscale New York neighborhood of SoHo. ...
http://www.forward.com/issues/2001/01.03.16/fast1.html - 9k - Cached - Similar pages
... It's like, can you not spell SoHo?". ... Kitchen; "Carroll Gardens West," really Red Hook; "Harnegie Hill," where Carnegie Hill meets Harlem; "LoHo," the Lower East ...
newyorkmetro.com/nymetro/realestate/features/4762/ - 38k - Cached - Similar pages
Benzilio claims she's christened the area above the Battery Tunnel -- an "eclectic area for artists" -- NoBatt. Meanwhile, southern Harlem became "SoHa" and the photo district in Flatiron developed into "Phoho." Then there's "NoChel," north Chelsea; "UpWeChee," a.k.a. southern Hell's Kitchen; "Carroll Gardens West," really Red Hook; "Harnegie Hill," where Carnegie Hill meets Harlem; "LoHo," the Lower East Side; and - ready? - "NoFlatEeChee," north of Flatiron and east of Chelsea. "They're dividing neighborhoods into little squares as they become more and more developed," says Horowitz.
6 January 2000, New York Times, pg. F1:
Pushed south and east by rising "uptown" prices in the East Village and SoHo, and pulled by the magnet of a thriving bar and boutique scene, young professionals are looking to LoHo, as real estate agents have re-named the stretch of the Lower East Side between East Houston and Canal Streets and Forsyth and Clinton Streets. It is fashion's new frontier.