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Downtown Eastside Tech Hub: City commits to 'capital incubation' at the expense of housing and jobs

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As part of the city’s Digital Strategy, the City of Vancouver is planning to build a Technology Centre in the heart of the DTES. The Technology Centre is a strategic gentrification catalyst that will put thousands of low-income housing units at risk. The Digital Strategy is on council’s agenda today, April 9th, 2013, as Homeless Dave enters his 19th day of Hunger Strike demanding housing and social justice at the former Police Station.

City planners and politicians are currently proposing that the city-owned building at 312/324 Main Street be used as a Technology Incubation and Acceleration Center. The former police station building is vacant following the VPD’s move to the former Vanoc building near Boundary Road in January, 2013. Moving expenses alone cost the city $10 million of taxpayer money, and yet the municipal government is considering further subsidies to incoming entrepreneurial tenants at the 300 block of Main Street.

RFEOI (“request for expression of interest”) was jointly put forward by the City of Vancouver and Vancouver Economic Commission to find an operator for the 100,000 square foot space. According to the RFEOI, the city will provide the building to the operator rent-free. In order to become financially viable, the operator will lease the space to a mix of tenants, including “pre-revenue” start-ups, social enterprises, established technology firms and potential retail firms on the first floor.

According to the city’s plan, the startups and social enterprises will be provided space for “less than market rent” while the other tenants would pay market rents. The RFEOI also hints that additional subsidies will be available to the main operator of the building. (According to the RFEOI –- “Proponents should clearly identify the form of any support it would expect from the City, broken out by year (either cash or in-kind support) during the early years of start-up.”) Experience from other cities indicates that technological innovation centres are costly endeavors. The Canadian model for Vancouver’s Technology Centre -- the MaRS project in Toronto -- receives annual subsidies ranging between $30 and 40 million. In practice, the free-rent and subsidies offered to the operator amount to an ongoing public subsidy transformed into a stream of private profit as the start-ups become profit-making corporations.

The proposed plan for the Vancouver Technology Centre (VTC) is based on a private-public partnership model, hinging upon the successful procurement of international venture capital and angel investors. The project would bring unprecedented amounts of capital into the neighbourhood, adding yet another layer of speculation to an already vulnerable housing stock. While the gentrifying effects of the project are undeniable, the current plan ignores any potential effects on the DTES.

Thousands of SRO units already stand to be lost in the DTES if gentrification continues to scale up the rents in the area. In the 1-block radius of the Woodward’s development, 400 low-income housing units were lost as a result of redevelopment. At 312 Main Street, the number of low income housing units at risk is significantly higher. To this day, no social impact study has been undertaken to asses the impacts of past and proposed projects in the neighbourhood, despite the fact that a study has been promised by Vision for years.

At a policy level, the project at 312 Main is explicitly tied to the city’s revitalization agenda for the area. The “Technology Centre” is already seen as an extension of the city’s “burgeoning entrepreneurial playground” of Railtown and Gastown, and the RFEOI states: “the centre can act as a catalyst or hub for…an innovation zone or neighborhood.” In Toronto, the MaRS project became the center of the rapidly expanding Discovery District and is currently is in its second phase of construction.

Vision Vancouver’s solution to the affordability crisis: corporate subsidies

The VTC projects comes at a time when corporations and small businesses continue to leave the city due to unaffordable rents. Vancouver has now been dubbed “Canada’s most expensive office market,” yet Vision’s solution to the affordability crisis is merely to pass emergency measures on an ad hoc basis, strategically targeted towards high profile firms and projects, like London Drugsthe six sites, and the VTC. The truth is difficult to avoid: a systemic crisis of lost jobs and lost housing is being papered over with private deals and subsidies for a select number of elite players.

Most recently, city hall approved a lease-to-own agreement with Hootsuite for another police building on Main Street. The lease for the former police station at Main and 8th was approved at a secret “in camera” meeting in June 2012. FOI documents turned over to journalist Sam Reynolds are heavily redacted but reveal that the city allocated $4.55 million of taxpayer money from the Capital Financing Fund for building improvements. These are millions of dollars that will be directly and solely reaped by Hootsuite.

Every day more housing and employment is lost in the real-estate affordability crisis, yet Vision Vancouver continues to subscribe to radical free-market ideology, refusing to take any measures to control the real-estate market or cut into real-estate profits whatsoever. The main reason for the growing demand for space for technology start ups is the lack of affordable spaces in the city. When Vancouver Economic Commission states that “affordable space for growth” is important, their solutions come at the expense of affordable housing. The patchwork initiatives of our municipal government continue to facilitate the developer monopoly while subsidizing a small number of catchy projects conducive to creative class optics.

The proposed “Vancouver Technology Centre” is an integral part of the city’s Digital Strategy, which is on the Council Meeting agenda today (April 9). The meeting coincides with the 19th day of Homeless Dave’s Hunger Strike against gentrification. One of Dave’s three demands is to build Social Housing at the former cop-shop at 312 Main Street, “with a community-directed space focused on women and aboriginal people in recognition of the horrific damage done over the years by the Vancouver police at the site.” (Residents have organized the Paint Party for Housing on Sunday April 14, noon at 312 Main Street.) The demand could not be more timely.

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