Gentrification: an economic reality

In a recent article, Dr. Jino Distasio of the Institute of Urban Studies discusses the prospect of old Exchange District hotels like the Royal Albert Arms and the St. Charles being converted from low-income single-room occupancy hotels to higher-end boutique hotels for the haute bourgeois. More broadly, this touches on an issue thus far rarely been discussed in Winnipeg: that of urban gentrification.

In a city with so little of it, it’s amazing how much objection there is towards gentrification. In some circles of the local clerisy, it seems to have come as a surprise that years of the Exchange’s rising trendiness has resulted in increased property values there.

American author James Kunstler explained the strange logic of the anti-gentrification movement in the Christian Science Monitor in a 2002 interview: "If you're against gentrification, you're saying... we don't want the well-off to come up and fix up this property in the city. Are you simply going to say, the well-off have no business fixing up urban property at all? Are they morally restricted to living somewhere else? Where is that somewhere else? The suburbs?"

Or in Winnipeg’s case, it’s acceptable for the wealthy to park their cars, buy antiques, and (especially) patronize the local arts scene in the Exchange, but it’s somehow not acceptable for them to sleep there.

This line of thinking has ignored the extremely favorable economic conditions that allowed these buildings to be built in the first place. Today, it’s what’s needed to renovate them so they may survive beautifully into their second centuries.

Also ignored is the reality that urban gentrification is an unavoidable consequence of simple supply and demand economics. As the supply of traditional city neighborhoods--built in a quality and scale unmatched by current architecture and planning--becomes diminished by decades of Modernism, the demand for remaining quality urban places increases.

More and more, people, usually members of the younger “creative classes”, eschew the postwar pattern by trading in chain motels surrounded by parking lots and a highway strip for boutique hotels surrounded by interesting cafes, galleries, shops and pubs.

The reason for opposing gentrification has typically been that it displaces poor residents who can no longer afford the increased living expenses. But in the case of the St. Charles hotel at Albert and Notre Dame--poised to become a boutique hotel--it was closed down not because of the Exchange District’s recent success, but because of its decades of failures. The hotel was insanitary and ordered closed in 2004, its tenants hastily vacated.

Were it not for the recent success of the Exchange District, the once fine St. Charles would likely have sat vacant for years more, or worse yet, have met a similar fate as the Leland hotel, which stood on Market Square, vacant and uncared for, until it burned to the ground in 1999.

Including the St. Charles and the Leland, there are four or five less hotels in the Main Street area than there was ten years ago. If that trend were to continue, there would be no SROs left between Portage and Higgins Avenues within twenty years. Urban decline has so far displaced hundreds more people that urban gentrification has.

The local approach has been to not do anything significant about housing the poor and vulnerable, but to suppress real estate values in the central city so that that rooming house landlords and SRO hoteliers end up being the ones who provide affordable housing to the poor, who are sometimes elderly, and often facing a variety of mental disorders or addictions.

This is how the Manitoba NDP attempted to justify their instrumental role in the development of the massive Waverly West subdivision: to flood the market with new suburban housing in order to keep city housing “affordable”. In downtown neighborhoods, this means keeping property values near the same undervalued levels they sunk to in the 1990s.

A more constructive approaches to the affordable housing issue, would be to raise shelter allowances--something the NDP government has not done in years. This would give people on social assistance an option to moving up to better accomodations, while giving their (former) landlords greater incentive to upgrade their run-down properties.

It is the government’s responsibility to provide housing for poor people, not the responsibility of the real estate market or hoteliers in particular. Responding to the results of growing urban economics, not attempting to suppress them, should always be the government’s role.