How do we know that gentrification is pushing up hotel rents?

How do we know that gentrification is pushing up hotel rents? In 2005, before Woodward’s was developed into 536 condo and 125 social housing units for singles, there were 8 hotels with 404 rooms within a block of Woodward’s. They all rented to low-income people. In 2012, according to a survey by the Carnegie Community Action Project, 6 of these hotels rented for $500 a month or more and 2 were closed.  One of the closed hotels, the Argyle, is being renovated to rent out at higher rents soon. All 8 hotels have been lost to low-income people who can only afford $375 a month for rent. So, overall the math of 125 social housing rooms minus 404 low-income hotel affordable rooms means low-income people have lost 279 rooms thanks to Woodward’s.

Also with Woodward’s condos came upscale stores surrounding the development.  Some of them sell $15,000 sofas, $100 t-shirts, $3 doughnuts, and other expensive things that low-income people can’t begin to afford. Many of these storefronts used to house shops and restaurants that served low-income people.

If you check out rents in privately owned hotels in the Downtown Eastside, you’ll see that west of Columbia St., close to the gentrifying condos of Woodward’s and other condos between Abbott and Carrall St., there is only one hotel that rents for under $425 a month; the Grand Union.  East of Columbia and farther away from the condos, more hotels have rooms that rent for $425 or less.

The lesson of Woodward’s is that gentrification and social mix are disasters for low-income housing, shops and community. In order to stop rent increases and low-income housing losses we need to stop condos and boutique shop developments.
Social mix has displaced low-income people at Woodward’s

Excerpt from CCAP’s 2012 hotel report

Before Woodward’s and accompanying condos were built the western section of the Downtown Eastside was a majority-low-income area. In the 2006 census the highest percentage low-income population area of the Downtown Eastside was Victory Square; with over 70% low-income residents.

When Woodward’s condos were built the City called them the “social mix” future of development for the Downtown Eastside. “Social mix” is a euphemism for diluting the low-income community in the Downtown Eastside with more higher-income people. Woodward’s was the city’s model social-mix project because the plan included expensive condos, family housing with some subsidies, and welfare-rate social housing. It was also planned to have both higher-end retail shops and low-income community space too.

What has social mix meant for the low-income community?
The redeveloped Woodward’s building was opened in 2009 and after three-years there is some evidence available about the real effects of this project and what social mix means for the Downtown Eastside low-income community.

  1. Social mix is welfare for the rich. To incentivize London Drugs and Nester’s Market to open in Woodward’s the City gifted them ten-year tax holidays. Council also awarded the condo developers an unprecedented height increase to build a tower for condo buyers separate from the social housing.
  2. Social mix is a poor-bashing philosophy. New residences exclude the poor with separate entrances and amenities. New businesses exclude low-income residents by price and culture. Security guards and higher-income shoppers and residents treat them with scorn. The unique sense of belonging low-income DTES residents have has been eroded in the Woodward’s area.
  3. Social mix covers for tax cuts. As the Federal and Provincial government have cut taxes and social housing programs City Hall seeks to use Community Benefit Agreements in the name of social mix to squeeze some social housing crumbs out of condo developments, but:
  4. Social mix destroys more low-income housing than it creates. Although Woodward’s includes 125 units of welfare-rate social housing the climate of investment and gentrification it produced destroyed at least 404 privately owned SRO hotel rooms.

The low-income community is now facing liquidation in Chinatown
Chinatown is home to the second largest concentration of privately owned SRO hotels still renting to low-income people.

There are currently 561 condo units planned and proposed for the Chinatown-south area. Like at Woodward’s these condos were incentivized by City Hall with major height increases passed at council in 2011. Also, like at Woodward’s, retail shops are being incentivized with storefront and facade grants. But unlike Woodward’s there is almost no social housing part of these developments; only 11 units at welfare-rate overall.

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