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The former site of the B.C. Collateral and Loan will be converted into a housing project with 19 self-contained units.Rafal Gerszak for The Globe and Mail

A real estate investment company often accused by anti-poverty advocates of pricing out the poor is set to announce a new project near the intersection of Main and Hastings streets in Vancouver's Downtown Eastside.

A scaffolding company on Tuesday began putting up hoarding at 71-77 East Hastings St., the former site of the B.C. Collateral and Loan. Living Balance is expected to announce in the next week it will convert the 111-year-old building, whose upper floors have been vacant for about 40 years, into 19 self-contained units with a retail business on the ground floor.

Seventeen of the units will be smaller than 320 square feet and be designated as single room accommodation (known in Vancouver as SROs), as all the building's units once were. Two larger than 320 square feet will not get the designation, but will be protected as rental for at least 20 years.

Rents for the units will be $650 to $700, but five will be subsidized for seniors as a condition of the city-issued permit. A permit issued for a previous owner in 2008 expired without any work being done.

With private bathrooms and small cooking facilities in each unit, the new building will be a considerable step up from most single room occupancy hotels in Vancouver, which typically have shared bathroom and kitchen facilities. However, anti-poverty advocates say the new units will be more for students and lower-middle-class workers than people on social assistance.

Vancouver city council unanimously approved the project in April, largely because the units would be self-contained – "the only appropriate standard," city manager Penny Ballem said – and not displace anyone.

"When you think about it, how could any city, previous to this, allow any building that had possible housing to sit empty for 40 years?" councillor Kerry Jang remarked at the time.

Jean Swanson of the Carnegie Community Action Project is concerned that higher rents will push up property values and displace the neighbourhood's many low-income residents.

"It's better than condos, but it isn't what's desperately needed in the neighbourhood, which is self-contained housing that people on welfare and disability, and seniors, can afford," she said.

At the April council meeting, Ms. Ballem said the city is doing everything it can to increase affordable and supportive housing, but it simply is not feasible to have rents of $375, the province-controlled shelter rate for people on welfare.

"The business case depends on an appropriate subsidy that's real in the setting of our city," she said.

Mr. Jang said "nobody can make any building work at $375 per month."

Outspoken DTES advocate Wendy Pedersen said the city should have bought the building long ago and made it social housing.

"We are desperate for our hotels to be replaced, for the homeless to be housed and for community members to have options to stay in their community," she said.

Last week, Downtown Eastside advocates staged a media event outside the York Rooms hotel on Powell Street, claiming that Living Balance – which has managed the property since November, 2011 – is trying to drive out low-income tenants. The company insists higher rents are necessary to maintain the building and create a safe and secure environment for its residents.

Living Balance manages about 400 SRO units in Vancouver. Buildings it has renovated over the years include the Piccadilly, American and Lotus hotels.