Residents in Vancouver's Downtown Eastside are upset that a condominium developer has passed the first hurdle in its bid to proceed with a new building in the poverty-stricken neighbourhood.

More than 40 members of the public and local organizations gathered at a city council hearing on Monday to oppose Concord Pacific's proposal for a 160-unit building on 58 West Hastings Street.

Residents in the area fear the development will increase gentrification and lessen opportunities for low-income housing, which they say is badly needed.

"This was an incredibly frustrating process," said Joan Morelli, a local resident, in a statement. "Every single person in the public hearings spoke passionately against the impacts of this development."

"Yet, the development is going through because we are told it is in line with city council policy," she said. "Well, why doesn't city council change its policy in accordance with the democratic will of its constituents, unless of course corporate developers are more worthy than DTES residents."

But the proposal does meet city requirements, staff said, and will be allowed to proceed under a few stipulations, including consultation with the neighbourhood about its marketing plan and some changes to the exterior appearance of the building.

In a report by city hall staff, more than 200 of the 215 written comments on the proposal from the public were opposed to the development.

Housing advocates have long worked to obtain more affordable rental and low-income housing in the area. They say they plan to continue to fight against the Concord Pacific development despite the permit board's approval.

There are about 11,000 homeless people across B.C., including 3,000 in Metro Vancouver, activists said.