Broken promises, but no ﬁx, for Downtown Eastside condo building
By Jen St Denis StarMetro Vancouver
03 May 2018
The Sequel 138
building on East Hastings Street sparked marches, a construction site
sit-in and a raucous development permit meeting that saw people
forcibly ejected from a room at city hall when it was going through the
approval process in 2011–12.
(Jennifer Gauthier for StarMetro)
VANCOUVER—The developer of Sequel 138 promised his building would
provide social housing, affordable home ownership, an arts centre with
community programming and a lane leading to Chinatown through the site
in the city’s Downtown Eastside.
Two years after the building’s completion, the lane is now locked off
behind a gate, four retail spaces sit empty, there is no arts centre or
programming, and BC Housing acknowledges some homeowners rented out or
put their units on Airbnb, abusing a housing covenant that was supposed
to prevent real estate speculation.
Despite meeting few of the community benefits that were promised to the
vulnerable Downtown Eastside community when the proposal was going
through approval in 2011, both the City of Vancouver and BC Housing say
they have no power to compel the developer or current owners to deliver
on those commitments.
our best, but nobody’s perfect,’ developer Marc Williams said. ‘Overall
the plan worked — a huge number of people were able to buy who
otherwise couldn’t.’ (Jennifer Gauthier)
The six-storey condo building at 138 East Hastings St. includes 76
condos and 18 social housing rental units. It’s squeezed between two
single-room occupancy hotels — the Regent and the Brandiz — and is
surrounded by the street life, homelessness and drug use that marks the
The project in the heart of the impoverished neighbourhood sparked
marches, a construction site sit-in and a raucous development permit
meeting that saw people forcibly ejected from a room at city hall.
Activists and residents feared the building would push poor and
drug-addicted people out of the neighbourhood, and called for a
building with all social housing at welfare rent rates instead.
Marc Williams, who developed Sequel 138, said all the residential and
commercial strata units have now been sold. In the end, he said, he did
not make a profit from the project.
“We tried our best, but nobody’s perfect,” Williams said. “Overall the
plan worked — a huge number of people were able to buy who otherwise
Covenant fails to stop selling
Marketing for the building describes the innovative affordable home
ownership model that was offered to buyers: people who made under
$85,000 were eligible to buy one of the tiny, 450-square foot one
bedroom units for around $260,000, which at the time was 10 per cent
below market value.
BC Housing designed and administered the legal agreement — called a
covenant — that was supposed to ensure buyers lived in the units
themselves and did not rent them out, except in cases of financial
hardship. The covenant was in place for two years after the initial
purchase, and the provincial housing agency verified the income cut-off
through income tax statements.
BC Housing Covenant
The deal did not require buyers to be first-time homebuyers, which BC
Housing now says was a mistake. It’s a loophole they would close for
any future affordable homeownership covenants, Susan Hancock, a
spokesperson for BC Housing, said in an email.
Some of the original owners have now sold their condos for over
$400,000; current listings show prices ranging from $399,000 to
There were also titleholders who already owned high-value properties:
for instance, land title records show one buyer bought a one-bedroom
Sequel 138 unit worth $264,320 in 2011, but has also owned a duplex in
Kitsilano since 2009, currently worth $1.8 million. The titleholder
declined to comment for this story.
BC Housing said when abuses came to light, the agency sent letters to
homeowners and then monitored Craigslist and short-term rental sites.
But the agency did not explain how even with the restrictions in place,
buyers were able to so easily break the rules.
listing for a unit in Sequel 138 describes the Downtown Eastside
neighbourhood as “gentrifying” and “street life is lively and
“We acknowledge that the restrictions put in place to ensure affordable
home ownership at Sequel 138 were inadequate,” Hancock said, adding it
was the first time the agency had designed a home ownership covenant.
Tom Wanklin, the city’s planner for the Downtown Eastside, said a
building that includes market condos would not be allowed today in the
area. The development application for Sequel 138 was processed while a
new plan for the area was being formulated.
The current plan for the Downtown Eastside, passed in 2014, requires
any new development to be at least 60 per cent social housing and 40
per cent market rental, meaning market condos are no longer allowed to
be built in the area.
High rental turnover
Charly Jarrett, who bought one of the condos with the intention of
living in it, said units were rented out almost immediately, while
several were listed on Airbnb.
“We expected people to honour the contract that they had signed,”
Jarrett said, “and we expected people who bought would understand where
they were moving.”
The building location and small unit sizes haven’t stopped owners from
trying to charge top dollar: one recent listing advertises $2,200 a
month for one of the tiny 450-square-foot, one-bedroom units.
Rental turnover has been high, Jarrett said, leaving much of the
building feeling strangely quiet. In contrast, the 18 units of social
housing on the third floor have been constantly occupied with long-term
tenants, making it a real asset to the building, Jarrett said.
Those who did live in the building often seemed “angry” that the
neighbourhood wasn’t changing fast enough, Jarrett said. Living beside
the Regent, a notorious single-room occupancy hotel, comes with its own
special challenges. Regent residents often throw used syringes, garbage
and human waste onto the Sequel 138 courtyard. Jarrett said someone
once shot at and broke the glass of the Sequel 138 elevator tower with
a BB gun from a room in the Regent.
From February 2015 until building completion, BC Housing also provided
a $21.8 million loan to the developer at 1.24 per cent, a low rate the
agency normally provides to non-profit housing agencies who are
building social housing.
BC Housing’s low-interest loans to private developers for other
projects that are a mix of market and social housing have come under
fire in the past: In 2017, Attorney General David Eby, who was then a
member of the Opposition, criticized the government for two complicated
deals with private developers in which BC Housing provided low-interest
Eby questioned whether private developers should have been eligible for
the financing, especially since for one of the projects, the BC Housing
loan provided bridge financing to help the developer start work on the
market condo portion of the project.
Commercial spaces sit empty
Most of the commercial spaces facing East Hastings are rented to social
service providers and government agencies. But the three commercial
spaces facing the courtyard and the back alley — which is often busy
with people taking drugs, sleeping, or using the space as a toilet— are
Two of the commercial units have entrances off the back alley of Sequel 138 remain empty. (Jennifer Gauthier)
Vancouver psychiatrist Raymond Liang owns two of the units; StarMetro
left messages at his psychiatry office over a period of three weeks.
His secretary said he was overseas but confirmed he had received the
messages. He had not responded to interview requests by publication
time. The owner of the third commercial unit could not be reached for
According to the Vancouver Sun, Liang has bought and flipped several
condos in Vancouver’s Trump Tower, and several years ago was issued a
fine by the Canada Revenue Agency for failing to pay tax on several
The city is still hopeful the empty commercial spaces will be rented out eventually, spokesperson Ellie Lambert said.
The arts centre and community programming promised during public
hearings and to the development permit board never came to pass.
Williams claimed that was because of a “lack of support” from the
Downtown Eastside community, which fiercely opposed the development.
“We just didn’t want the gentrification,” said Jean Swanson, a member of the Carnegie Community Action Project.
Arts centre promise can’t be enforced
The arts centre was originally supposed to be operated by an
organization called the Canadian Foundation for Creative Development
and Innovation. The society was headed by Sean Kirkham, who at the time
was the proponent of a plan to memorialize murdered and missing
Indigenous women with a series of bronze plaques.
But according to media reports from 2013, Kirkham never followed
through on his plaque project. He failed to pay people who had been
contracted to produce the plaques, and faced numerous fraud and theft
charges in B.C. and Quebec. Kirkham died in 2016.
Detritus thrown out of the windows of the Regent Hotel often lands on the courtyard of Sequel 138. (Submitted)
The city said it can’t do much when it comes to the arts centre
promise. Unlike the requirement that the building’s paint colours echo
the Pantages Theatre, a heritage building that once stood on the site,
“there was not a requirement for events to take place,” Lambert said.
“The best recourse for anyone who wanted to challenge whether a permits
condition had been met would be to file a complaint with the Property
Use Inspections Branch. If the inspector determined that there was a
discrepancy between the requirements and what was delivered, the city
would follow up with the owner to satisfy the condition.”
Swanson said it’s unfortunate the arts centre never materialized:
several arts spaces in the Downtown Eastside have recently been lost,
such as a space in the recently sold Jubilee Hotel, and the Red Gate
Arts Society, which must vacate its East Hastings location by the end
In the time since the building was completed, homelessness has only
grown worse in Vancouver, while an opioid overdose crisis has pushed
life expectancy down in the Downtown Eastside.
no place for low income people to go
“There’s no place for low income people to go,” Swanson said. “They’re
just finding any spot where there’s an overhang that’ll keep the rain
off, and there’s a few of those in front of Sequel 138.
“So a lot of people sleep there.”
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