The small, semi-detached house at 108 Emerald Street North is as good an example as any to illustrate the booming real estate market in Hamilton's inner city. The one-and-a-half-storey house with two bedrooms and two bathrooms has been immaculately renovated outside and inside right down to the studs. Maple cabinetry in the kitchen, hardwood floors and travertine tiles everywhere, and a brand new garage built out back. THE POVERTY PROJECT:

Saturday: Part one

Poverty reduction: The long game



Monday: Part two

Affordable housing: If boom means bust



Tuesday: Part three

The new economy: Precarious and insecure



Wednesday: Part four

Neighbourhood inequality: A city divided



Thursday: Part five

Neighbourhood in transition: Beasley then and now



Friday: Part six

Poverty and youth: Violence stirs a city



Saturday: Conclusion

The new prosperity: Hope has taken root

"Not a stone has been left unturned," said the owner who didn't want to be named for privacy reasons. The asking price for this house, located between Wilson and Cannon streets in a part of the city that would have been charitably described as "challenged" just a few short years ago? $329,900. At the time we spoke, the house had been on the market for less than two weeks and there had already been a flurry of interest. "Four people from Oakville alone," the owner said. He grew up in central Hamilton on a street that was just as rough as Emerald, so he knows the inner city well and he's prepared for the inevitable question: Did you ever think you'd see the day when a house on Emerald North would be up for $329,900? "You can't believe how many people have said that to me," the owner said with a sigh. The stats certainly support the perception a boom is underway in Hamilton's inner city. Figures from the Realtors Association of Hamilton-Burlington show that house prices averaged $235,000 in central Hamilton in August, a hike of 12 per cent from the previous August, while the number of sales in central Hamilton jumped 14 per cent. In east Hamilton, house prices climbed 14 per cent over the same period, to an average of $252,500. It's a perfect storm of circumstances that have all lined up in order: The ongoing reclamation of Hamilton's waterfront as a place for people and not just industry. Real estate prices that had reached rock bottom in the inner city coupled with the exorbitant prices seen elsewhere in the GTA. A new GO Transit station on James Street North and the prospect of full, all-day train service to Toronto. The promise of an east-west LRT line across the lower city. And there are other signs as well. You don't have to drive far in any direction to witness the inner city's renaissance. Construction waste bins seem to be sprouting like mushrooms in driveways and next to sidewalks throughout north Hamilton. There are two of them just steps apart in front of houses on James Street North, another on Bay Street North not far away from the site where a six-unit condominium is being built, and two more bins a couple of houses apart on a short stretch of Caroline Street North. After years of stories bemoaning the decline and decay of Hamilton's inner city, surely these are positive developments, right? A mini construction boom is under way in north Hamilton neighbourhoods like this as owners renovate their properties to take advantage of the city's soaring housing market. Truth be told, isn't a booming real estate market in some of Hamilton's more challenged neighbourhoods a tonic for the city's collective psyche? Isn't it kind of like our own version of Sally Field's famously gushing Oscar acceptance speech: "They like us, they really like us." "This is not a bad news story," said Ryan McGreal, editor of the popular all-things-Hamilton website Raise the Hammer. For more than a decade, McGreal's site has chronicled the enthusiasm — and frustrations — of those who want to make Hamilton a more vibrant and attractive place to live and work. "If you're a city and one of your problems is property values are going up and affordability is a problem," McGreal said, "and the other problem you have is people are fleeing your city and property values are collapsing, I'll take the former problem over the latter every time." The beauty of a boom, it turns out, is in the eyes of the beholder. “A couple of years ago the idea of gentrification being this kind of runaway train was fairly laughable.” << Ryan McGreal, Editor, Raise the Hammer "Most of what's happened is good — on balance," said Richard Harris, a McMaster University professor who specializes in the study of urban residential environments and suburban development. "But that's the key: on balance. "There will be some displacement," Harris added. "You have to acknowledge there are some people who are going to lose out." Harris is talking about the gentrification of Hamilton, the process by which older, rundown neighbourhoods are rebuilt, rejuvenated and repopulated with people of higher incomes. "And it's happening. For sure," added Terry Cooke, president and CEO of the Hamilton Community Foundation, which in recent years has increasingly focused its considerable charitable weight on addressing the city's social issues. "There are people attracted here by quality of life and relative low cost who have skills to compete globally," said Cooke. "I see an emerging and younger entrepreneurial culture and often driven by people who have chosen to come here for lifestyle reasons." But for each action — the arrival of more affluent people — there is an equal and opposite reaction: the displacement of lower-income people and those who are most vulnerable. Duplexes and triplexes, for example, get converted back to single-family homes, reducing the supply of affordable housing. Renovated properties lead to higher rents for those units still left on the market. An influx of more affluent people attracts more of the same. Stage 1 A small group of “pioneers” in a neighbourhood renovate (or purchase and renovate) properties for their own use. At this stage, there is little displacement of people from the neighbourhood. Stage 2 Renovations expand, subtle promotion of an area begins quietly, real estate agents begin taking notice and small-scale speculators begin expressing interest. Vacant houses become a source of interest for purchase and renovation. Stage 3 Media attention begins to be drawn to the neighbourhood and improvements become noticeable. House prices escalate and displacement of people increases as landlords take advantage of higher potential rents. Tensions begin to increase between longtime residents and new arrivals. Stage 4 The influx of higher-income residents increases. House and rent prices continue to increase. New commercial enterprises spring up to cater to the changing market. To satisfy increasing demand for housing, non-residential buildings may be converted into condominium or rental units. Displacement continues and gentrification begins to spill into other neighbourhoods. The uncomfortable question left hanging: Where do the displaced people go? Do they simply become disadvantaged refugees pushed on to some other community?

"A couple of years ago the idea of gentrification being this kind of runaway train was fairly laughable," said McGreal. "And yet in just the past year, the supply of rental vacancies in Hamilton has dropped by more than half.

"It's amazing how quickly the situation has changed, just in the last year or two," he added. "The landscape is shifting under our feet and I think we have to be really cognizant of how that's happening."

Hamilton is clearly showing the evidence of gentrification and the chain reaction that flows from a hot real estate market.

Nearly 2,000 rental units have been converted into condominium units in Hamilton, although not all of those converted units are owner occupied.

The vacancy rate in Hamilton's primary rental market has dropped sharply since April 2014, from 4.5 per cent to about 1.8 per cent.

Not surprisingly, a shrinking pool of rental units has also led to higher rents. This year, Hamilton has seen the highest jump in rental prices of any major city in Ontario.

And there's more to come.

In early September, an Ottawa-based real estate investment trust announced it had agreed to pay $51 million to purchase four highrise apartment buildings with a combined 618 units in the Riverdale neighbourhood east of Centennial Parkway.

In announcing the purchase, the trust's CEO pointedly stated there would be a major "repositioning" of the buildings to attract tenants prepared to pay higher rents. He also noted the buildings were ideally situated to take advantage of the planned GO train extension to Centennial Parkway and the proposed LRT line that will end at the Queenston traffic circle.

"The notion that large-scale investors would fix up highrise apartment buildings is a sign that things are changing," said Harris.

But Harris said he's also worried by a longer-term trend pointing to the growing polarization between homeowners and renters.

Back in the 1960s and '70s, the average income of a homeowning household was 50 per cent greater than a renting household.

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Now, the income of the average homeowning household is 100 per cent greater than the average renting household.

Owners of homes like these in Ancaster are likely to be much better off than people living in rental units. A lack of affordable housing in Hamilton is increasing the gap between the haves and the have nots. "I think gentrification is not the problem," said McGreal. "Ultimately, the problem is a lack of affordable housing at the policy level.

"Affordable housing policy shouldn't be that you have a stock of hundred-year-old rundown houses that have all been converted into fourplexes," he added. "That's not a good way to deal with the issue of housing affordability."

Joe-Anne Priel agrees.

She's the general manager of emergency and community services for the city and she's worried that the booming real estate market is simply creating more distance between the haves and the have-nots.

"We can't just say 'Yay' about people coming here and creating a boom without taking care of the other side of the teeter-totter," said Priel. "We've got to make sure there's some balance."

For her, affordable housing has become the key issue. The city, she adds, has become "ripe for speculation."

"You can see it," Priel said. "Landlords asking people to move out, giving them bonuses, getting tenants out of those apartments, turning them over and then renting them for more money.

"Yes, obviously, there is some benefit in people coming here and creating jobs and there is prosperity happening absolutely. But you then have to have intentional investments to make sure there's some social justice in our community, some equality.

"At the end of the day, who wins here?" Priel asked. "Who?

"I think that's a great question.

Some signs of success

Two affordable housing projects completed in the past four years have added just over 200 units to the city’s stock of apartments.

Good Shepherd Square

King Street West, between Pearl and Ray streets, opened in 2012 with a complex of three buildings.

One building contains 84 one-bedroom apartments for seniors and one building contains 72 units of two- and three-bedroom units for families. Rents are set at less than 80 per cent of market prices.

A third building contains 34 units for women and children escaping domestic violence or in need of emergency shelter.

Total construction cost was nearly $42 million, with $10.5 million provided through the joint Canada-Ontario Affordable Housing Program and $6.4 million from the city, made up mostly from property tax savings.

“There was a lot of concern in the neighbourhood, a lot of pushback and that’s part of the success story,” said Gillian Hendry, director of the city’s housing services division. “Now they are very welcome in the neighbourhood and considered to be good neighbours.”

Dr. John M. Perkins Centre

Main Street East, near Kenilworth Avenue, opened in the fall of 2011.

The building contains 46 units and a community meeting space and is intended for singles, primarily those with a history of mental health issues. A strong partnership has also been developed with McMaster University’s School of Nursing and the housing is considered to include light support for the residents.

Total construction cost was $7.1 million, with $5.2 million provided through C-OAHP and just over $1 million from the city.

Rents at the Perkins Centre are also set at less than 80 per cent of market prices.

Both Good Shepherd Square and the Perkins Centre are fully occupied with waiting lists.

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