Downtown Eastside housing activists are claiming victory after a controversial developer lost his bid to purchase two Single Room Occupancy hotels in the neighbourhood.

In a decision made by the B.C. Supreme Court this morning, Living Balance International Trading lost their bid to purchase the Wonder Rooms and Palace Hotel.

The Downtown Eastside Neighbourhood Council (DNC) estimates Living Balance President Steven Lippman already owns six Single Room Occupancy (SRO) hotels in the Downtown Eastside. Five have since been renovated and the DNC reports rents have been raised above the welfare housing allowance of $375 to as much as $950 per month in some buildings.

The DNC has staged several protests since learning Lippman's company was bidding for the two SROs last Friday. On Monday protestors set up a picket line outside Lippman's West Vancouver residence and established a camp nearby, while another group marched to a BC Housing office demanding a meeting about the Wonder and Palace Hotels, which together house 72 low-income individuals.

"Lippman's deal falling through is a kind of victory for us no matter what the cause, and I hope that our pressure has something to do with it," Ivan Drury, a spokesperson for the DNC, told The Tyee.

Living Balance spokesperson Geoffrey Howes denies the protests had anything to do with their failed bid to purchase the hotels.

"We went to the court, we had made an offer to buy it, but somebody had obviously bought out the mortgages," he says.

"We had an offer in advance of the protests, that offer never changed."

The Wonder Rooms and Palace Hotel made the news last year when owner George Wolsey was ordered by court injunction to provide desperately needed repairs to the hotels. Wolsey was granted a $2.5 million loan by IMOR Management Corp. to keep his mortgage from foreclosure.

But Drury says IMOR was moving to foreclose against Wolsey. Last year the court appointed Campbell Saunders, a company the deals with personal and corporate insolvency issues, to sell the hotels. Lippman's company had made an offer, but another company, Laurelwood Ventures and Southwood Ventures, has now bought the mortgage instead.

Howes says the DNC would rather keep the Wonder and Palace hotels in disrepair than renovated. He admitted rates would have gone up at the SROs if Living Balance had taken possession and renovated them, "there may be a marginal increase, it might be $400 to $425, but we think the city should either buy the buildings and fix them up, or the city can find some way of supporting the people that are on welfare so they can afford to live in a decent place."

Drury says he's still trying to make sense of the details. But although he and Howes fundamentally disagree over what affordable housing means in the DTES, Drury echoes Howes' call for the city to step in and buy the buildings.

"Low-income people need to have stable and secure housing, at an absolute minimum, or else their health and well-being is in jeopardy, and that's the responsibility of all three levels of government to provide, and that's a responsibility that all three levels of government are currently reneging," he says.

Katie Hyslop reports on education and youth issues for The Tyee Solutions Society.