irwinloy

The manager of one hotel that caters to low-income renters predicts more and more Downtown Eastside hotels will close, kicking its residents onto the street, if the city’s drug conundrum isn’t solved.

Landlords just can’t afford to deal with the costs of housing drug addicts, according to Harold Myshrall, who manages an SRO hotel on Granville Street.

“A lot of landlords are just saying, enough is enough,” Myshrall said in an interview. “It’s just easier to close than to stay in business.”

Over the past year, at least three residential hotels in the DTES have shut, spilling its tenants onto the streets.

Homeless advocates accuse the building owners of trying to make a quick buck in time for the Olympics. Myshrall, however, paints a different picture.

“The owners finally just had enough of it. It's easier to rip the place down than to put up with all the drugs and all,” said Myshrall, who thinks buildings would not be shutting down if the city’s drug problem could be solved.

“Landlords wouldn’t have all these damages and extra costs being laid on them.”

Myshrall said he’s facing a bill of $700 (roughly two months’ rent) to fix up one of his units after the now-departed tenant defecated throughout the entire room. He said it's not uncommon for monthly repair charges to run in the thousands of dollars.

What does it cost to run an SRO hotel?

Rent: $390 / month
Units: 100
Occupancy: 75%

Monthly revenues: $29,250

Fixed expenses: $25,000
(Utilities, staffing, etc.)

Monthly profit margin: $4,000

"If you have $5,000 worth of damage done to your building in a month, you're not making very much money."
-Harold Myshrall

"You rent a room out at $390 a month. Then you've got to evict a person for illegal activities," Myshrall said. "Then they do $2,000 worth of damages. Where's your profit margin going?"

But while DTES advocate David Eby says he accepts it’s costly for landlords to house drug addicts, "Drug issues in the DTES aren’t new."

“What is new is that the hotels are closing at a crazy rate," said Eby, a Pivot Legal Society lawyer. "People are buying these buildings for incredible sums of money.”

The 18-unit Burns Block, for example, closed earlier this year and is now for sale at $2.5 million – roughly five times what owner Nik Bahrami first paid for it in 2003.

The city's fire department shut Burns Block down for fire code violations. But Bahrami claims he couldn't keep up with damage caused by some drug addicted tenants.

"They break the doors, they break the locks, they do renovations in your rooms without you knowing it," Bahrami said in a previous interview. "They don't care. The only thing they care about is their habit. They do anything to get their habit."

Bahrami said he can't afford the round-the-clock security it would take to keep the building clean. A part-time manager he hired did little to keep order, he said.

"After he left, everybody was coming in, sleeping in the shower rooms, shooting in the toilets. Blood was everywhere," Bahrami said. "Always there was a fight in the hallway, somebody got stabbed, somebody got shot. There was always something. It's so stressful to manage that kind of hotel."

Last week, squatters occupied the empty North Star Hotel, demanding the city follow through with a promise to buy properties for social housing.

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Tags: vancouver, sro, downtown eastside, housing