In Saint-Henri, it's hard to get away from Bonheur d'occasion-the squalid depiction of working-class life in the 1945 book still haunts this Montreal neighbourhood. The book lives on in the area's still-apparent poverty; in the crooked buildings of Sainte-Marguerite Street; in the glimpses of verdant, wealthy Westmount, with its mountain mansions smirking at the city beneath it from a safe distance. The title of Gabrielle Roy's landmark novel is even etched in tile at one of Saint-Henri's metro stations.

Still, a lot has changed since the publication of Roy's book. At the time, Saint-Henri was a neighbourhood beaten, picked over and pushed aside by the relentless forces of modernity; a never-ending procession of rushing locomotives, squealing machinery and inky soot. But the foghorns of the Lachine Canal were silenced long ago when the waterway was closed to commercial traffic in 1969. Today's Saint-Henri is cleaner, quieter, and prettier than the neighbourhood of a half-century ago. It's certainly less poor-no more tarpaper shacks in forgotten back alleys; no more anemic children in one-bedroom apartments.

For all these improvements, however, Saint-Henri remains one of the poorest neighbourhoods in Montreal. Its story is not unlike that of many other North American districts. First settled as an industrial suburb along the Lachine Canal in the mid-nineteenth century, St. Henri was hit hard by the de-industrialization of the 1960s and 1970s. With the departure of its industries, though, came a new wave of inhabitants; immigrants, students and professionals. In recent years, thousands of new condominium units have been built along the renovated canal, near the revitalized hall of the Atwater Market, an Art Deco edifice stocked with fresh produce, meats, cheese and flowers.

The last vestige of St. Henri's industrial past, the Imperial Tobacco factory in the north part of the neighbourhood, closed for good in 2003. With the gentrification of Saint-Henri already in full swing, it wasn't a surprise when, last month, a developer announced his intentions to redevelop the site. What was a surprise was the size and scope of the project. If development proceeds, 481 housing units would be built in the old factory, including 144 units to be sold for under $150,000 (thus qualifying for municipal affordable-housing subsidies) and another 78 that would be bona fide social housing units. The site would encompass new offices, retail spaces, a recreational centre with a green roof and three permanent parking spaces for Communauto, the world's largest car-sharing collective. The hideous concrete shell that has covered-up the factory's brick façade since the 1970s would finally be removed.

However, the project has inevitably become a lightning rod, chanelling frustration over the gentrification of Saint-Henri. At a recent public hearing on the proposed development, more than one hundred people showed up, almost all of them opposed. They were led by the housing advocacy group POPIR (the Projet d'Organisation Populaire d'Information et de Regroupement Arrondissement Sud-Ouest de Montréal ... now there's a mouthful), which for years has fought for more affordable housing in Saint-Henri. "There are still 4,000 households in the whole southwest of Montreal paying more than 50 percent of their income for housing," explains Louis Gaudreau, spokesperson for POPIR. New condo developments push up land values, he adds, creating instability in the housing market. Landlords raise rents illegally or exploit rental-law loopholes to evict tenants and convert buildings into condos. "Year after year we have people with trouble finding decent housing. We fear that having four hundred more condos is not an acceptable answer to the social problems we are facing."

So what's acceptable, then? At the very least, says Gaudreau, the city needs to stop approving so many condo developments. His ideal solution is for the city to buy the Imperial site and convert it entirely into social housing. While POPIR hasn't yet developed a specific plan-community input is still needed-Gaudreau insists that the Canada Mortgage and Housing Corporation, the federal government's national housing agency, has more than enough money to help the city purchase the former tobacco factory. Thierry St-Cyr, the newly elected Bloc Québécois MP who represents Saint-Henri, has promised to look into the matter. POPIR and other housing activists are further encouraged by a new municipal law that could allow them to force a local referendum on the Imperial Tobacco issue.

But what about social integration? Pushing for more social housing is one thing, but calling for the end of private real estate development in Saint-Henri is quite another. It has long been understood that good neighbourhoods are demographically diverse, so shouldn't there be a balance between market-rate development and public housing? Gaudreau is sceptical. "Honestly, we have not seen yet what could be good for the neighbourhood about social mixity [sic]. So far, [the condos that have been built] were justified by the fact that they would stimulate the economy and everybody would benefit from it. But for the moment all the jobs that have been created have been highly specialized; the new services are not accessible because they're too expensive."

It's a predicament, indeed. One of the biggest problems with gentrification is the social tension it can create. Think of Manhattan's Alphabet City in the 1980s, where wealthy new residents moved in next to squats and tenements, and walled themselves off with iron security gates. But gentrification doesn't need to lead to such class conflict. The experience of other Montreal neighbourhoods hasn't been entirely negative. Hochelaga-Maisonneuve, a poor district similar to St. Henri, has benefited from the construction of mid-range condos and an influx of new residents. Its main streets now bustle, re-energized by a diverse range of new businesses. Recently, a large discount supermarket opened on the ground floor of a converted factory.

It seems clear that if poverty is to be tackled effectively in Saint-Henri, stable and affordable housing must be provided for its poor residents. For the government-municipal, provincial and federal alike-that means building more social housing and buying up old housing to convert into cooperatives. Subsidies for businesses that cater to neighbourhood needs-like affordable food cooperatives-would help a lot, too. But attacking every new condominium development in Saint-Henri goes too far, especially in the case of Imperial Tobacco; a project which, if anything, seems especially sensitive to the needs of its neighbourhood.

What would make even more sense is a new strategy in the fight for more affordable housing. Instead of simply opposing new condos on principle, why not pressure the city to require that 20 percent of all new residential development in Saint-Henri be designated as social housing? It's an approach pioneered in Vancouver, where private developers have built 800 new public housing units out of their own pockets, in addition to the social housing supplied directly by the government.

As it stands, the fight-all-condos attitude of Saint-Henri housing activists isn't working. Their track record at defeating new condo development is dismal: one by one, they've charged ahead and have failed each time. The affordable housing included in the Imperial project might seem a token amount to activists, but it's better than nothing. Even if POPIR manages to stop the development, there is no guarantee that the government would be willing to pick up the tab in order to convert it into social housing.

Gentrification is a complicated process. If left unchecked, it can have devastating consequences. But a government committed to social housing can manage it effectively-even if that means working with developers to built that housing. The fight to house Saint-Henri's poor must go on, but it shouldn't come at the expense of well-balanced endeavours like the Imperial Tobacco project.

Christopher DeWolf wanders our streets as Maisonneuve's urban affairs critic. His column appears every two weeks. Read more columns by Christopher DeWolf.