A proposal to sell the city's 12 affordable housing projects is gaining momentum.

Carmel Partners, a San Francisco-based real estate investment group that's buying the private Kukui Gardens affordable rental project downtown, said it has met with several City Council members to discuss buying all 1,250 of the city's affordable units.

City officials stressed that they have not yet decided to sell the affordable housing projects. If they do sell, the city would require the buyer to keep the units affordable, they said.

Mayor Mufi Hannemann declined to comment yesterday and referred questions to a city housing staffer. In December, Hannemann said he would agree to a sale of the city's affordable housing if the units stayed affordable and tenants were not kicked out.

One potential benefit of a sale would be if facilities or services were improved. But critics say the city would be moving in the wrong direction if it gets rid of affordable housing amid a growing homeless problem.

"It would put a lot of people into trouble," said Ron Moniz, a 61-year-old disabled tenant in the city's Marin Tower complex on Nimitz Highway. Moniz said he fears his rents will soar if the city sells to a private investor.

"If they sell this to a private developer, a lot of people will fall out of their safety nets."

Marin Tower resident Ron Allen said he is worried that a private owner would raise his rent as much as $250 a month, despite the city's assurances to keep the project affordable.

Allen, 47, said his current rent of about $850 is much less than the maximum amount allowed under federal affordability guidelines. A new owner would raise the rents to the maximum, Allen said.

"I pray this won't happen," Allen said.

Some community leaders say they would oppose any sale to a private developer.

City Councilman Rod Tam, in whose district many of the projects are located, said he would mobilize tenants against a for-profit investor that wants to redevelop the rentals and build more expensive housing.

"I will campaign against Carmel or any other carpetbagger," said Tam, who is opposing the sale of Kukui Gardens as well.

Buck Bagot, a San Francisco-based affordable housing consultant who is helping Kukui Gardens tenants, said he's encouraged that the city is requiring the units remain affordable. But given the shortage of affordable housing in Hawai'i, the city should be increasing its inventory of affordable housing, not getting rid of it, Bagot said.

"It's 180 degrees in the wrong direction," Bagot said. "I hope the city invites people who are interested in seeing more affordable housing (to get) involved."

OTHERS INTERESTED

Cyndy Aylett, Hannemann's project review manager, said it's too early to say whether the city is going to sell its affordable rental units.

In June, the city hired a real estate consultant, REH Capital Partners LLC of El Segundo, Calif., for about $100,000 to review the city's affordable housing properties, target potential buyers and estimate the properties' value.

Aylett said she's studying the city's options and won't have recommendations for 30 to 60 days.

She also said she's received calls from people interested in acquiring the city's affordable rentals but said she had no memory of any calls from Carmel or its executives.

Chris Beda, Carmel's chief investment officer, said he has not spoken with officials in the Hannemann administration but said he did talk to several City Council members.

Beda said his company has been interested in acquiring the city's affordable rentals for two or three years and is willing to keep the properties affordable.

"If the city wants to sell their apartments and they want restrictions on them, that's fine," he said. "It just impacts how much they want to sell them for."

City Councilman Todd Apo, who met with Beda about three weeks ago, said Carmel is particularly interested in the city's Chinatown properties. Apo said he told Beda the city would only sell the apartments if rents remained affordable.

Apo said he told Beda the city's Chinatown properties are ideally situated given that they are likely to be near any rail stations the city builds as part of its new mass transit system.

CARMEL NO STRANGER

Founded in 1992, Carmel Partners owns about 12,000 apartment units nationwide.

In addition to its pending $130 million acquisition of Kukui Gardens, the company owns 520 former naval rental housing units at Kalaeloa, which it acquired last year for $79.5 million.

In 2004, the company bought the 204-room Aloha Surf Hotel in Waikiki for $15.7 million. Carmel later renovated the hotel and sold the units as condominiums.

The company also was part of a group in 2002 that bought the 700-unit Moanalua Hillside Apartments complex from a Mainland company for nearly $50 million.

The group spent about $10 million on improvements. Rents rose by about $100 to $200 for units previously rented for $800 a month, and increased by $200 to $360 for units previously rented for $925 a month. The group then sold the complex to an affiliate of Los Angeles-based Douglas Emmett Realty Advisors for $108.5 million in January 2005.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.