Residents of a former homeless shelter under the north end of Vancouver's Granville Bridge say would rather camp out than move back to the troubled Downtown Eastside. (CBC)The closure of one of two homeless shelters on the north side of False Creek has led to a new problem in the upscale downtown neighbourhood.

The 36-bed Homeless Emergency Action Team (HEAT) shelter at 1435 Granville St. was closed at the end of June following weeks of protests by area residents.

The shelter — and another like it on Howe Street, which remains open — led to a plague of open drug use and dealing, public urination and defecation, prostitution and public sex, trespassing, theft, aggressive panhandling and harassment outside their homes, residents complained.

Vancouver Mayor Gregor Robertson and Housing and Social Development Minister Rich Coleman said B.C. Housing would move as many people as possible into new accommodations.

However, they didn't count on a handful of people who decided they didn't want to leave the neighbourhood. They have set up a makeshift camp with sleeping bags, mattresses and lawn chairs across the street from the former shelter and say they won't leave unless it is re-opened or a new location is found.

Another nearby shelter on Howe Street will remain open at least until the end of July. (CBC)The Howe Street shelter is on probation until the end of the month, and some of its residents say they will join the protesters if it is shut down.

"If that shelter closes we are staying here," one resident said. "There is no way — we won't go to the Downtown Eastside. How can they expect people to get clean when they go to an area like that?"

Robertson said Tuesday the city is working on the problem.

"There certainly have been people reluctant to leave who were using the Granville shelter and the Howe shelter continues to be overflowing. We're working with the shelter users and operators to reduce the impact."