Vancouver housing advocates worry city hall's push to revitalize historic Chinatown could work against its homelessness strategy.

City council approved a 17-storey tower for the southwest corner of Main and Keefer streets last week.

While officials applaud the new project, advocates worry it will only further gentrify a vulnerable neighbourhood.

“It causes increased land prices, it causes increased rents, it causes increased taxes,” said Jean Swanson, of the Carnegie Community Action Project.

“So, you don't actually have to physically displace an apartment unit. All you have to do is increase the land values and then the forces that cause displacement kick in.”

Swanson recently studied the impact of the nearby Woodward's development and found that although the complex itself included some low-income rentals, it also fueled rent increases at surrounding single-room occupancy hotels, resulting in a net drop of housing options for low-income earners.

“We've got to slow down the gentrification or there will be a lot more displacement and a lot more homelessness,” Swanson said.

The Keefer and Main streets project will bring 134 condos to the area, along with 11 rental units targeted at low-income seniors.

“It's absolutely a success,” said Queenie Choo, CEO of SUCCESS, the social services agency that will own and operate the rental suites.

When asked if there are enough suites for the needy, she agreed more needs to be done.

“But at least it's pointing us in the right direction,” Choo said.

The development will also include new ground-level retail and office spaces.

And the push to rebuild Chinatown continues at city hall, with another development application before council on Wednesday.

With files from the CBC's Luke Brocki