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The money pit

A Globe and Mail investigation shows for the first time how much public and private money has been spent on Vancouver's Downtown Eastside since 2000: $1.4-billion. What has all that money accomplished? Limited progress at best. As Robert Matas reports, many people believe the area is worse than ever

From Saturday's Globe and Mail

VANCOUVER — It has been nearly a decade since three levels of government signed a landmark agreement designed to transform Vancouver's notorious Downtown Eastside, but the neighbourhood remains a vortex that sucks in junkies, the mentally ill and other desperate souls from across the country.

With a year remaining in the agreement — and the 2010 Olympics about to put Vancouver in the world's spotlight — a Globe and Mail investigation has for the first time tallied how much public and private money has been poured into Canada's worst slum.

The result: More than $1.4-billion later, the Downtown Eastside is hardly better off.

An open-air drug market still thrives five minutes from a police station. The bathrooms of decrepit hotels still serve as shooting galleries for addicts. Prostitutes still offer their bodies from the curbside. Drug pushers still prey on the mentally diminished, multiplying the misery.

If there has been progress, it has been scant. The rash of drug overdoses that killed more than 1,000 people in the 1990s has dissipated, but the legion of addicts remains. HIV/AIDS is no longer epidemic, but residents' health remains abysmal.

Even the politicians who were behind the Vancouver Agreement concede defeat.

"I've worked in the Downtown Eastside for a long time, since before I got into politics, and I have never seen our community this bad," says Jenny Kwan, the NDP cabinet minister who led the province's involvement in the agreement, signed in 2000.

"I can say that honestly, politics aside, I have never seen such desperation on the streets. I walk down there in the early hours, I go down to the community, and I am literally stepping over bodies."

Spending on the Downtown Eastside is "mind-boggling," says former Vancouver mayor Philip Owen, another signatory to the agreement.

Mr. Owen says that until now he has had no firm idea of just how much money has gone into the Downtown Eastside.

That is because nobody has been keeping track.

The federal, provincial and municipal governments, the Vancouver Coastal Health Authority and more than 100 organizations working in the neighbourhood record their own spending, but none keeps a global tally. The Vancouver police department, meanwhile, won't release its budget for patrolling the Downtown Eastside.

"No one seems to have a handle on it," says Bernie Magnan, the Vancouver Board of Trade's chief economist. "We've tried several times to get it, but we cannot seem to nail down what actually goes in there."

By conducting interviews, reviewing public documents and asking groups to summarize their spending, The Globe reached a conservative estimate for health, social services, housing, law enforcement and other public services.

The grand total: At least $1,468,154,865 since the Vancouver Agreement was signed, with roughly $717.5-million spent on health and social services, $348.6-million on housing, $154.5-million on safety and justice, $230-million on economic development and $16.8-million on services that bridged those classifications.

Reaching the total was more art than science. Wherever possible, The Globe used actual spending figures, but in some cases relied on promises of spending or estimates where precise figures weren't available. The calculations include some projects and services outside the Downtown Eastside because the boundaries of the neighbourhood are fluid and some of the projects aimed at the neighbourhood's residents are located outside it.

The flood of spending has been concentrated mostly in a few squalid blocks home to about 6,000 men and women; a huge chunk has gone to about 2,100 people in crisis, health authorities say.

So why has $1.4-billion made so little difference to this relatively small population? Where did the money go?

One room for the homeless: $326,484

To help solve the puzzle of how so much money has been spent on housing in the Downtown Eastside, consider the case of the Pennsylvania Hotel.

The historic five-storey structure, built in 1906 and designed by renowned local architect William Tuff Whiteway, is located on the edge of the most desolate stretch of Hastings Street, the main drag. By 2000, the once-stylish, turret-topped building was a flophouse, its 165-seat pub a drug den.

The city, provincial and federal governments worked together to restore the heritage landmark, replacing the pub with a restaurant and reconfiguring the living space into 44 units for the homeless. The antiquated structure had to be brought up to current seismic and building codes.

The province contributed $4.6-million from its housing budget and agreed to pay $341,710 annually for health workers and counsellors who work there. Ottawa contributed $4-million. The regional and city government paid an additional $2.15-million.

Developer Concord Pacific contributed $3.6-million in exchange for transfer of density to another property.

In total, it cost $14.4-million to reopen the hotel recently. That works out to $326,484 per suite, for about 250 square feet of living space, including a bathroom and kitchenette.

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