Downtown Eastside poverty and housing activists' campaign against the gentrification of the neighbourhood is failing to scare developers who see value in the area that, a decade ago, was a ghetto.
138 Sequel Development Corp. owner Marc Williams plans to start construction this year on a six-storey tower with 79 affordable homes plus 18 social housing units at 138 East Hastings Street. This despite an anti-gentrification protester embarking on a liquids-only hunger strike on March 22 that was aimed at pressuring the B.C. government to buy the project and build 100% social housing.
"A small group of Marxist ideologues who have self-appointed themselves are seen by the public to be representatives of the neighbourhood," Williams told Business in Vancouver. "That's not right."
Other developers are similarly keen to continue the revitalization of the neighbourhood.
Anthem Properties bought the 122-year-old Save-On-Meats building at 43 West Hastings on February 28. It plans to keep Mark Brand's restaurant and deli on the ground floor while turning three upper floors into office space, president Eric Carlson told BIV.
But Salient Group principal Robert Fung said that buying properties in the area doesn't necessarily mean that projects will be viable on the sites.
Having completed eight projects in the area during the past decade, Fung is largely responsible for the Downtown Eastside's "gentrification."
Most of the projects were high-end heritage restorations that were made viable by a now-defunct City of Vancouver program. Fung is game to do more developments, but he said it would depend on new city incentives to make the projects viable.
"People are pouring money into property regardless of what the current returns are," he said. "So the economic formula for us, as a merchant developer, is different from people who want to park money."
Anthem has been on a buying spree in the area, given that it also bought 190 Alexander Street and 425 Carrall Street in last two years.
Carlson joked that he doesn't have enough money to simply "park" it. What he will do is a "paint and tickle" minor renovation of 425 Carrall Street and keep both it and 190 Alexander Street as investment properties.
Carlson said his rationale to invest in the Downtown Eastside is more sentimental and less because he envisages huge capital gains on the properties.
"If we wanted to get real upside in income property we'd be way better off going to an American city that's been recovering than by buying office property in the Downtown Eastside."
Longtime owners of large blocks are watching the neighbourhood's transformation and considering making substantial capital investments.
Army & Navy owner Jacqui Cohen owns the lion's share of the block bounded by Hastings, Cordova, Carrall and Abbott streets. She wants to redevelop the block, which includes parking lots, a head office, a hotel and her chain's original 93-year-old store.
"Let's put it this way, it will be in our lifetime, God willing" said Cohen, who turns 60 this month. "I'm taking my time going through the process. It won't be immediate. Have you ever tried to do anything with the city? Especially when you're looking [to build something with] density. You've got zealots who don't want development."
138 Sequel project a model for low-income homebuyers
Marc Williams, who plans to build housing at 138 West Hastings Street and is the target of anti-development protestors, believes that his project is the kind of development that anti-poverty protestors should love.
Not only will 18 of the 97 units be social housing, including residences for seniors, but the project will also include an arts centre operated in conjunction with a non-profit that will lease the space for $1 per year for the first five years.
Anyone who buys a market unit at 138 Sequel must pay a $5,000 deposit, earn less than $64,995 and have a net worth of less than $100,000. Units in the for-profit project cost $250,000 and up.
The regulations stem from a $3.75 million pre-construction loan, at 1.29% interest, that BC Housing gave Williams last year.
Williams, who developed the 110-unit Koret at 55 East Cordova, stressed that the deposit is not a down payment and that buyers will be able to get their deposit back.
He provides buyers with a mortgage of up to 10% of the purchase price and Canada Mortgage and Housing Corp. (CMHC) has approved that contribution to the home purchase as equity.
That approval should enable buyers to get a mortgage worth 90% of the purchase price plus taxes and CMHC fees.
