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Temporary modular housing for homeless people is seen in Marpole, in Vancouver, B.C., on Wednesday March 28, 2018.DARRYL DYCK/For The Globe and Mail

The two well-worn low-rise apartments on Oak Street in Vancouver’s Marpole neighbourhood have become a kind of ground zero in this city’s dilemma over how to solve its rental-housing shortage.

A new owner has applied to demolish the existing buildings – with their 43 units renting for as little as $1,000 a month for a one-bedroom – and build 91 new rentals.

But there is no way that the new apartments will rent for anything near what the old ones did.

The owners, APCanada Investment Corporation, are offering compensation to tenants, including as much as four months of the rent they are currently paying for those who have been there for more than a decade, reimbursement of moving expenses for everyone and a right of first refusal on the new units, with 30 per cent off the new rents.

But the demolition likely means that many or all the existing tenants will be pushed out of the area and possibly Vancouver.

On the other hand, the redevelopment will double the number of rentals on the two lots.

That’s the challenging decision Vancouver’s new councillors face as they confront the first major rental project that involves so much demolition. The project is the subject of a public hearing this week.

It’s one that’s seen as key by B.C.’s landlords’ association and housing advocates, because it will send a signal about how Vancouver is likely to deal with many other similar sites with aging apartments. That will be especially important as the city figures out what to do along the Broadway corridor, where there are thousands of such buildings.

“This is the first project like this of consequence, with so many tenants,” said LandlordBC chief executive David Hutniak. “It was a good project, with old buildings that were beyond repair and a good application and good tenant-relocation package. But there’s a concern that it will be just turfed and that will put a freeze on everything.”

There has already been resistance from some councillors in recent months about any affordable units being demolished, even for new rentals. As a result, staff are coming forward with a new report on June 11 on how to provide even more protections for what are being called “vulnerable tenants” who may be displaced, which may lead some to say the project decision should wait until after new options are presented.

If the public hearing goes ahead, councillors will be faced with heartfelt pleas to stop the demolition and, even from the most pragmatic of the tenants, an acknowledgment that the redevelopment will mean leaving Vancouver.

“There’s no way I could afford anything more here,” said Don Krossa, a 13-year resident in one of the buildings who does credit adjudication for a major bank. He will be moving to Chilliwack, thanks to his employer’s willingness to let him work from home.

He said he doesn’t see how anyone with only a single income is going to be able to stay on in the city. He was already displaced once, from the West End 13 years ago when rents went up there, and landed in Marpole, where one-bedrooms were then going for $500 or $600 a month. Because of rent control, the cost of those one-bedrooms for continuous tenants is now much lower than what the market can get as rents have escalated.

But he’s resigned to it, saying the building needs so much maintenance that he likely would have been evicted anyway so that an owner could do major renovations, if it weren’t being redeveloped.

And he gave the City of Vancouver some credit, saying that at least the city’s policy means that it will be new rentals built and not luxury condos.

Other tenants who have been there less time than Mr. Krossa will get lower compensation and, like him, they appear to be unlikely to find anything nearby.

One tenant, Patricia Gravidez, wrote in saying that the apartment on Oak has been the only home for her family – husband and two children – since they arrived from the Philippines in 2016. She’s done the research and local rents are double what they are currently paying.

“Relocating will take a definite financial toll … because it’s quite impossible to find an apartment that’s as affordable as the one we have now.”

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