Vancouver's mayor has failed to keep a promise to build social housing that would be available at welfare and pension rates on a lot in the Downtown Eastside – a pledge made in response to a protest encampment last year, housing activists say.

The mayor's reversal would be disappointing at any time, but stings more as rents climb in the neighbourhood, they say.

"We are in the trenches – this is the epicentre of the homeless and housing crisis in the Downtown Eastside," said Lama Mugabo, an organizer with Carnegie Community Action Project.

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"We go into rooms and we talk [to city officials] and instead of acting on what we agree on – things change."

The city, however, says it can't afford on its own to rent all of the units at income-assistance rates but continues to seek additional funding to make that possible.

The debate over the housing mix at 58 West Hastings is part of a bigger housing picture in the Downtown Eastside, where the amount of traditionally low-cost accommodation such as single-room occupancy hotels is dwindling and new shops and condominiums are popping up.

The 58 West Hastings site is a city-owned vacant lot where protesters pitched tents during the 2010 Olympic Games and again last year to highlight the lack of affordable housing in the neighbourhood. Community groups have long pushed for social housing on that lot.

Last August, Mr. Robertson met with community representatives at nearby Carnegie Community Centre and signed an agreement that said: "We commit to 100-per-cent welfare/pension rate community-controlled social housing at 58 West Hastings."

The agreement, written on a large sheet of paper and signed by the mayor, also said the city would work with the community to develop a rezoning application to put before council by the end of June, 2017.

Last October, the city announced a partnership with the Chinatown Foundation, a Vancouver charity, to develop the site, saying at the time that the agreement would allow about half of the planned units to be rented at welfare rates.

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The Chinatown Foundation would build and operate the project and lease the land from the city. The budget for the project has not been completed but the foundation is expected to put in $30-million or more.

This month, Chinatown Foundation and its city partner, Vancouver Affordable Housing Agency (VAHA), filed a rezoning application, rekindling the debate.

The rezoning application is for a 10-storey building, including seven floors of residential units – 222 in all – and three floors for a health clinic and other services.

Of those 222 units, 50 per cent would be available at fixed-income rates.

Of the remaining units, 17 per cent would be rented at "housing-income limits" – thresholds set by BC Housing for eligibility for social housing – and 33 per cent at "low-end-of-market" rates.

The Carnegie Community Action Group held a public protest Tuesday. An open house scheduled for the same day was postponed; a new date has not yet been set.

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In a letter to community organizer Jean Swanson, Mr. Robertson said the city contributed the land, worth $20-million, with hopes of working with the group Our Homes Can't Wait, which was instrumental in securing last summer's agreement. The goal was to secure funding to allow all of the units at the site to rent at welfare rates, the mayor said.

To date, that joint advocacy hasn't happened, he said.

"I would urge you to engage with the city to partner on advocacy for this project," Mr. Robertson said in the letter.

"Our experience with all of our successful community housing partnerships is that it requires partnership at all levels of the project, especially advocacy."

The city continues to seek funding from either the provincial or federal governments, or both, that would allow most or all of the units to be rented at subsidized rates, VAHA president Luke Harrison said.

"We are continuing to ask the federal and provincial governments to help us get from that 50-per-cent [welfare rates] to 100 per cent," Mr. Harrison said. "We will continue to petition right up until that building being occupied to get that money in the door," he added, adding that the city has contributed the land and a charity has agreed to provide substantial funding toward that goal.

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The budget for the project has not been finalized but early estimates indicate the Chinatown Foundation will have to put up $30-million or more to allow half of the units to be rented at shelter rates, Mr. Harrison said.

The federal budget released in March included $11.2-billion over 11 years for affordable housing. A national housing strategy is to be released later this year.