Time running out for some affordable housing tenants in S.F.

Twenty-five years sounds like a long time, but for hundreds of San Francisco residents worried that their affordable rents could soon more than double, time is running out.

Five apartment houses were built in the late 1980s and early 1990s with city redevelopment money, loaned in exchange for a promise that 20 percent of the units would stay affordable for 25 years.

But with that guarantee nearing its end, people in those units are scrambling to find a way to ensure their rents don’t soar to San Francisco’s stratospheric market rates.

“When I first heard about this, I told myself, ‘It will never happen,’” said Maria Moustakis, who has lived at the South Beach Marina Apartments at 2 Townsend St. for 15 years. “But the rumors have been flying.”

Neither Moustakis nor any of the other residents in the 101 affordable units in her building have received the required notice from their landlord that the rents are going way up, but she worries that could happen any day.

No decision has yet been made on the rents, said Dennis MacKee, spokesman for the Florida Board of Administration, a state pension fund that bought the Townsend Street apartment building in 1999.

“We’re looking at (the situation), but no notices have been sent,” he said. “It’s hard to say much about something that hasn’t happened.”

If the pension fund wants to boost the rate of return on its investment, jumping all the rents to market rate would do it in a hurry. Moustakis, for example, pays “a little more than $1,800 a month” for her two-bedroom unit. But two-bedroom market-rate apartments where she lives now list online for $4,875 to $5,475 a month.

For Moustakis and many others, there’s no way they can pay that sort of rent.

If the rents went that high, “I would have to move,” said Juraj Martanovic, who owns a nearby boat maintenance business. “How can a regular person compete with what a tech worker starting at $130,000 a year can pay?”

Making the situation even worse is that the rules — and deadlines — that could force the renters out were written by the city.

That doesn’t make a difference, said Supervisor Scott Wiener.

“Circumstances have changed, and we’re in a housing crisis that didn’t exist 25 years ago,” he said. “The last thing we need now is to lose affordable housing.”

It’s happened before

This isn’t the first time government-imposed rules have left San Francisco looking at the potential loss of affordable housing. In the mid-1990s, owners of 8,000 low-income housing units built 20 years earlier with federal loans were allowed to prepay their mortgages and convert to market-rate rents. But the city put together a program that saved all those affordable apartments, even as more than 100,000 units of federally assisted housing were lost elsewhere in the nation.

That came at a price, however, said Olson Lee, director of the Mayor’s Office of Housing and Community Development.

“We had to provide an incentive to return those units as affordable housing, either through ownership transfers or sales,” he said. “Of the 33 properties involved, we facilitated the transfer of 18. We didn’t lose any units, but (the city) put money in. ... Nothing comes free.”

Under the city’s Housing Preservation Program, which was run by the now-defunct San Francisco Redevelopment Agency, the city worked with banks and nonprofit housing groups, using city grants and below-market-rate loans to help move many of the buildings from private to nonprofit ownership.

In most cases, the city bought the land and then leased it back for 99 years to keep it as affordable housing.

The city is preparing to deal not only with South Beach Marina Apartments, but also with Fillmore Center, Rincon Center, 737 Post Street and Bayside Village, where owners all will be able to convert their affordable apartments in the next few years.

The city will be negotiating, Lee said, reminding the property owners that they have to give current renters 18 months’ notice before converting the apartments to market rate and asking them to consider more than just the money.

While the owners have the right under law to eliminate their affordable apartments, the city has some negotiating leverage, especially with companies that want to continue doing business in San Francisco, Lee added.

“Most companies don’t want to be known as the landlord who kicked people out into the street,” he said. “We’re not trying to change the rules, but trying to come up with a win-win agreement that satisfies both parties.”

Deals could be costly

Getting to those agreements could be costly, depending on what sort of deals are negotiated, and any payments will come out of the city’s Housing Trust Fund, cash typically earmarked to build new affordable housing. But housing activists need to remember that preserving what the city has is every bit as important as new construction, said Supervisor London Breed.

“Preservation has never been highlighted the way it should be,” said Breed. “We can’t always be concerned about new, new, new without dealing with old, old, old.”

Keeping people like the residents of South Beach Marina Apartments, Fillmore Center and other buildings in the affordable homes they now have has to be a priority, said the supervisor, who is working on a long-term plan for dealing with affordable housing.

“We’re going to have to be creative,” Breed said. “Sure, there might not be a legislative fix, but we can use the laws we have in a creative way.”

For many people in San Francisco, losing an affordable apartment means losing the life they have led for many years.

“If I have to move outside the city, how do I keep up with my business, which is now across the street at the marina?” asked Martanovic, whose aging parents also live at the apartment complex. “If this continues to go on, San Francisco will change to a gated community.”

Moustakis worked for 30 years in the restaurant business. Her neighbors in the affordable apartments are chefs, small-business owners and others with a stake in San Francisco, she said.

“We’re not the poorest of the poor,” she said. “I was born and raised in the city, and want to be able to stay here.”

John Wildermuth is a San Francisco Chronicle staff writer. E-mail: jwildermuth@sfchronicle.com Twitter: @jfwildermuth