This week, cleanup begins on an old tavern and banquet centre in Hamilton's east end that will transform it from apartments of "last resort" to 60 new units for low-income tenants.

George and Mary's Tavern was a bustling, sprawling complex, an east end landmark in the late 1960s and 1970s.

Over the years, it hosted everything from casual gatherings of blue-collar workers grabbing a pint after work to weddings, stag and does and company functions.

Along the way the tavern featured strippers and karaoke, and the owners put in 60 small, cheap apartments

Affordable, but with a cost

Even though they didn't formally shut down the tavern business until a few years ago, as the owners and their clientele have aged, the structure became an eyesore and conditions deteriorated.

The old bar at George and Mary's closed down for good only a few years ago. (Kelly Bennett/CBC)

The apartments attached to the old tavern on Parkdale and Melvin were affordable – rents were $500 to $600 a month for a private space with a bathroom and a hot plate and fridge – but they were in shambles.

There was mould, leaking roofs, peeling paint, burned out corners from a fire years ago.

'It was a home of last resort': Indwell's Graham Cubitt 0:39

"There's no heat in the building, there's bedbugs, there's a lot of things that made this a very difficult place to live. It was kind of a home of last resort," said Graham Cubitt, who's overseeing the transformation project for nonprofit developer Indwell.

"But we want it to become a place that people actually want to live, quality where any of us could live."

Graham Cubitt surveys an apartment in the old George and Mary's Tavern. Cubitt works for Indwell, which is taking on the project to build 60 affordable apartments. (Kelly Bennett/CBC)

The project comes in the middle of a time of intense attention on affordable housing in Hamilton, as rents and for-sale prices rise and quality options become scarcer.

Helping relocate tenants

But it's also an example of a place where housing was "affordable" as long as tenants were OK living with bugs and without heat.

The owners rented rooms to tenants but the building was in disrepair and when Indwell bought it, they didn't have heat. (Kelly Bennett/CBC)

When nonprofit Indwell bought the place recently, they found 18 tenants there. They've spent the last couple of months helping all of them move out to new places,

That's easier said than done when you're used to paying so little.

And it may explain how some of them ended up at George and Mary's to begin with.

"It's really hard to find the combination of privacy, security and low-cost, and places that don't ask for a lot in terms of a credit check or incarceration history or, 'Do you have any ID?' Anything like that," said Cubitt.

Cleanup is beginning this week on the project. (Kelly Bennett/CBC)

To people like Cubitt, it's heart-breaking that tenants would feel they didn't have another option than to live on the fringes.

That's why Indwell doesn't believe the private market can be trusted to deliver housing for the lowest income people in town.

Doing something different

"The market is saying, $500 is too cheap for anyone to live right now. But when people are on [Ontario disability], they have $479 a month," Cubitt said. "Yes, you can get it cheaper if you don't inspect it, if you don't have any heat, if you have no ventilation, if you don't provide life and safety."

Indwell plans to keep the structure as a three-story building, but part of it needs to be torn down and rebuilt. On the main floor, where the old wallpaper is still up on the walls of the old bar, will be a convenience store and a pharmacy.

A postcard from George and Mary's shows the tavern in its bustling days. The orange chairs are still stacked by the bar. (Kelly Bennett/CBC)

All told, the project will cost about $10.9 million and is expected to go through next spring. Indwell got a mortgage from the Hamilton Community Foundation, and has about $5.5 million committed from the provincial and federal governments. The rest, they'll fundraise privately.

The organization sees the project as reinvesting in the corner and in the housing stock at the low end of the rental spectrum.

We want it to become a place that people actually want to live, quality where any of us could live. - Graham Cubitt, Indwell

Like in their other projects across the city, Indwell will also help people find the supports they need for addictions, jobs, medical help – rather than just providing them a cheap place to sleep.

One tenant showed Cubitt where he'd plugged a hole in the wall with a magazine to keep the squirrels out.

"That's where we say, no, we have to do something different," Cubitt said.

"Because regardless of your circumstances, your addictions, your history of incarceration, whatever it is, you don't deserve to be exploited by somebody who's, yeah, providing you housing, but it's living in these kind of conditions."

George and Mary's Tavern is on the corner of Parkdale and Melvin avenues in Hamilton's east end. (Kelly Bennett/CBC)

kelly.bennett@cbc.ca