HIGH COST OF A CRISIS
DTES businesses under threat
The unholy trinity of homelessness, addiction and untreated mental illness on Vancouver's Downtown Eastside has created a humanitarian crisis.
But it also poses an economic and existential threat, with vandalism, graffiti, break-ins, open drug use and overdoses pushing it to a tipping point.
Security costs are through the roof at commercial, retail and office buildings. So too are the almost daily costs of repairing damage and cleaning up garbage and even feces from building entrances.
The Downtown Eastside has gone from an interesting — albeit gritty — place to work and do business to one that is increasingly dangerous and expensive. Those considerations, coupled with the fallout from COVID restrictions that have more people than ever working from home, has got tenants wondering whether they want to stay, and landlords wondering whether they'll be able to find retail, commercial and office tenants to fill a rising number of empty spaces.
The jump in operating costs is extraordinary. In one building alone, costs have risen 3,200 per cent since 2016, according to an analysis by landlords with buildings in the Downtown Eastside. Yes, you read that right — a 33-fold increase.
The significance of 2016 is that it's the year that a public health emergency was declared because of the rising number of overdose deaths. Since then, millions of dollars have been pumped into the neighbourhood for housing and harm reduction — everything from buying up single-room occupancy hotels to providing a safe supply of drugs to addicts during COVID to encourage social distancing.
Yet, overdose deaths this year are on track to reach an all-time high. In November alone, deaths were up 89 per cent from a year ago.
For building owners and tenants, the costs just keep rising.
The quadruple-digit increase is the worst case in the analysis. It went from having no security costs in 2015 to $216,534 in 2019.
Window replacement costs nearly doubled in five years. Repairs caused by graffiti, vandalism or needed for improved security more than quadrupled.
For tenants, that meant rents rose to $2.91 per square foot from 39 cents. For the smallest tenant, it added an extra $3,270 a year. For the largest, it meant $55,000.
Other buildings have also had substantial increases — 810 per cent in one building, for example, and 300 per cent at another — with tenants' costs increasing from between $730 and $11,330 a year.
At the same time, property taxes have also gone up. For the building with that 3,200 per cent cost increase, taxes increased 19.4 per cent between 2016 and 2019.
The building with an 800 per cent increase? Taxes were hiked 28.5 per cent.
Included in those tax increases is a 0.5 per cent “opioid overdose surtax” that was first levied in 2017.
Since then, the surtax has raised $14.28 million. Nearly two-thirds of what is collected each year pays for a three-person medic unit in police and fire centres, which in 2020 amounted to $2.43 million.
This year, another $310,000 was spent on an unspecified increase in city staffing in the Downtown Eastside.
As for the $890,000 spent on “micro-cleaning grants,” it is hard to fathom that the neighbourhood could look worse than it does.
Almost daily, landlords hear from security guards and tenants about somebody overdosing at a building's entrance, someone being stabbed, bitten by a pit bull, assaulted, threatened or verbally abused.
They say police rarely come unless it's an emergency. Even then, one landlord said that the lone security guard held down a thief for 45 minutes before officers arrived to arrest him.
It's hard to overstate how much things have changed and how chaos has been normalized.
At least one landlord that I know of requires everyone in the building to be trained to use naloxone — the drug that reverses opioid overdoses — and requires that everyone carry it with them at all times, both inside and outside the building.
“I wasn't comfortable that I would know what I was doing if I ever had to use it,” said an employee who works there. She asked that her name not be used for fear of retribution.
It was a relief when the COVID work-from-home order came in March.
“It's like a war zone outside our building,” she said. “In the meeting room, you have to turn the speaker phone off because of ambulances going by so often. It was shocking.”
Without a massive and more co-ordinated effort by all three levels of government to deal with the triad of problems, Vancouver's core is at risk of becoming like New York City's in the 1970s — a place abandoned by everyone except for the most vulnerable and disadvantaged who have nowhere else to go. At risk is the livability that the city boasts of, to say nothing of the hundreds of millions of dollars of public and private money invested over the past decade to revive Vancouver's historic centre.
It threatens the viability of the $400-million Woodward's redevelopment and the $32.6-million retrofit of the former police station at 312 Main St.
Beleaguered Chinatown has also never been under more pressure, despite the efforts of the foundation that's attempting a physical, commercial and cultural revitalization of that century-old, iconic neighbourhood.
When people are living and dying on the streets in shocking conditions in one of the world's most affluent countries and one of its most expensive cities, it's a humanitarian crisis.
But it's also an economic one when the costs of doing something are no longer outweighed by the risks of doing nothing.