Housing the Homeless: A Case Study of the Portland Hotel

Executive Summary

Portland Hotel is a five-storey, 70-unit building in Vancouver providing transitional
housing for hard to house tenants. Originally constructed in 1906 in the oldest area of
Vancouver, the Downtown Eastside, Portland was transformed into supportive housing
in 1991 through the efforts of a local neighbourhood group, the Downtown Eastside
Residents Association (DERA). Investment in projects such as Portland reduces
pressure on emergency shelters and facilities such as detox centres. This executive
summary highlights some of the steps leading to the establishment of Portland Hotel
and its initial two years of operation.

Since 1983, DERA has sponsored co-op and social housing projects and attempted to
improve living conditions in existing housing stock. Portland Hotel differed notably
from these projects given DERAs aim to provide supportive transitional housing for
people with mental illness and other serious health issues. At Portland, residents would
be able to stabilize their lives in a safe, secure environment without the threat of
eviction, abuse or being taken advantage of by landlords, owners or other residents.

When first built, the hotel was typical of the many area residential hotels, also known as
Single Room Occupancy (SRO) hotels. Originally named the Rainbow Hotel, DERA
chose to rename it after Portland, Oregon, as DERA had learned a great deal about
developing and managing non-profit SROs from that city.

In the latter half of the 1980s, the owner of the Rainbow Hotel completed renovations,
bringing the building up to municipal fire code standards and to comply with
maintenance bylaws. This included installing sprinklers, exit stairs from the second to
ground floor and two exterior fire escapes. Other renovations included electrical work,
painting and carpeting.

Further renovations were needed to convert the building to its new role in providing
supportive housing. The main work involved installing common kitchen units on floors
two through five, placing mini-fridges in each of the 70 rooms and creating a laundry
room and small office.

DERA needed to secure a capital grant to cover these renovations before it could enter
into lease negotiations. After extensive negotiations with provincial ministries, DERA
received a $150,000 grant from the British Columbia Housing Management Commission
(BCHMC). The funds covered renovation costs, legal fees associated with the lease
agreement, architect consulting fees, salaries and other costs. The grant proved to be a
good investment, as BCHMC secured 70 units of housing at minimal cost compared to
the normal unit prices it covered.

With renovation funding in place, DERA started negotiations in the fall of 1990 with the
hotel owner, who was prepared to lease the rooms at a fixed monthly rate for an initial
five-year contract with a five-year renewal option. Leasing, instead of outright
ownership, reduced DERAs risk in this first-time venture. The final lease contained
covenants that DERA had right of first refusal if the owner ever decided to sell the hotel
and any sale of the building would be subject to the management contract being
honoured by the buyer. As part of the agreement, the owner made a donation of $10,000
to the project in the form of cash and one month free rent.

The lease was in the form of a management agreement, as the owner wanted to retain
control and operation of the hotels pub. This was new territory for DERA. With no
suitable model to follow, negotiations proved complicated and were done too hastily
over six months: a major drawback of the agreement was the omission of a clause
concerning an arbitration and appeal process; and the six-month period did not allow
sufficient time to assess the physical condition of the building.

DERA had the zoning changed from commercial to residential, resulting in a reduction
in the annual tax bill. However, due to the nature of the management agreement, DERA
had to pay GST. Given its non-profit status, DERA would have preferred to be exempt
from this as well.

As transitional housing serves a very specific target group, Portland tenants could not
be selected from DERAs social housing waiting list of almost 4,000 people. Instead,
prospective tenants learned about Portland by word of mouth, and the Greater
Vancouver Mental Health Services Society (GVMHSS) made some referrals.

An early 1993 survey indicated that 75 per cent of the 73 residents were male and 25 per
cent were female. Of these, 60 per cent received welfare and 34 per cent were on
disability income. All reported having been sexually abused at some point in their lives.
Almost all experienced some form of substance abuse; over half had dual diagnosis of
chronic to severe mental illness and substance abuse and/or criminal problems; a third
had been diagnosed with schizophrenia; a third were intravenous drug users; and 12, or
a sixth, were HIV positive. Typically, IV drug users and people with AIDS have few
housing choices. Extensive investment is important to ensure they are not left homeless.

Portland was staffed 24 hours a day, with most staff having a background in
psychology, caregiving, or nursing combined with psychiatric experience. As the nature
of the tenants changed, so did staff duties and the number of staff required. Crisis
intervention was an integral part of every staff members job and the most time
consuming. Both psychiatric and non-psychiatric residents required management
intervention. Through flexible yet structured programs, staff provided residents with
the opportunity for emotional and practical development. The highly tolerant
atmosphere of Portland gave residents the opportunity, despite their health issues, to
develop skills often leading to greater self-esteem and confidence.

Rents were equivalent to the monthly shelter portion provided by welfare, but this
covered only 50 per cent of DERAs total revenue requirements for Portland. GVMHSS,
the provincial Ministry of Healths funding body for mental health services in
Vancouver, quickly became the single largest funder. Without this revenue, Portland
would not have been able to provide the necessary services and staffing levels. The
Ministry of Health also provided funding for a Native Health Coordinator. Ideally, a
funding program should be available for non-profit groups to own and manage
supportive transitional housing.

Portland Hotel represents an important approach to combating homelessness,
especially among the hard to house. On its own, it is not an effective solution. As an
element of a comprehensive program in addressing homelessness, it is essential.