Tim Francis is leaving James Street North — and not by choice.

Francis, a former Dofasco employee, set up his eponymous gallery on James Street North as a retirement project. He sells his own art — egg tempera, mixed media collages, graphite drawings — and pieces from a variety of other artists. The walls of his shop are lined with huge landscapes and portraits priced anywhere from $50 to several thousand dollars.

But by the end of January, he'll be closing his doors. He says his building has been sold and he can't afford to see his rent go from $1,000 to $1,800 per month. The new owners plan to open a coffee shop in the space, Francis says.

"The nice thing is, it's changing. That's the good thing. The bad thing is, it's the mom-and-pop shops that are making a living here that are going to get nailed for higher rent. Where are they going to go?" Francis said.

"I'm just thrilled I had three years here," he said. "That's good enough."

It's a story we've all heard before. Artists are often the first harbingers — and victims — of gentrification. They bring cultural cachet to areas like James Street North, only to be priced out of the very neighbourhoods they helped build up.

It's a phenomenon that's played out before in Hamilton, when antique dealers on Locke Street were replaced by higher-end stores, restaurants, and — the prototypical symbol of gentrification — a Starbucks.

But at its core, gentrification is a sign of economic success. When neighbourhoods turn around, businesses move in, vacant buildings are filled, properties are improved, developments spring up and tax assessment climbs.

Perhaps more than any other urban issue, gentrification is not a black-and-white issue; instead, it's a tangled, complex web made up of many shades of grey.

Dave Kuruc has seen the transformation first-hand. When he opened his popular James Street store, Mixed Media, nine years ago, it was the first storefront in a string of shops, cafés and boutiques that now line the street.

"Spaces are obviously at a premium. Folks want to be on James Street North because of what we've built here," Kuruc said. "When people come to me now looking for a storefront, it's not as easy to direct them to a space that's available. When we moved here, you had your pick of spaces — it was a matter of what was the best of the worst."

One of the issues facing business owners like Francis is that there are no mandated limits on rent increases. While the province dictates that residential rents may only be raised by the rate of inflation (usually about 2 per cent each year), commercial rents can climb according to market value. That means rents could double or even triple within the course of a just a few months — as is the case with Francis' rent being increased by 80 per cent.

Still, residential renters are not immune, says McMaster University professor and gentrification expert Jim Dunn. A landlord can only increase rent by more than 2 per cent if a tenant moves — which can lead to difficult situations for tenants, said Dunn.

"There's a lot of room for mischief in those types of situations," he said. "There can be outright harassment and trying to get people to leave by making it unpleasant for them to stay. I've also heard of deals where they offer cash incentives to vacate," he said.

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The best neighbourhoods have a mix of high- and low-income residents, artists, small businesses and chains, argues Gil Penalosa, executive director of the nonprofit organization 8-80 Cities. He says that maintaining that balance should be up to city hall.

"It's not going to be through supply and demand. If we want to have social housing, or if we want areas where there are artists, the city needs to intervene here by having rent control, or by purchasing and leasing buildings," he said. "I do think that that's something that's important. The city has to intervene. We don't want to have everything that's just McDonald's and KFC."