Owners of the Willston South complex of 180 low- and moderate-income apartments near Seven Corners say they can no longer afford to keep them as rental units and hope to convert to condominium ownership.
Negotiations have begun with the tenants about sale discounts and rent and relocation plans. Many of the current tenants are elderly, and Fairfax County authorities are hoping that special concessions can be arranged for them.
Mason District Supervisor Thomas Davis met Wednesday with the county housing authority and the owners' lawyer and said he was "much more optimistic" than he had been about the plans for helping tenants.
The tenant package being discussed includes discounts for buyers, three- to five-year frozen rent agreements for the elderly and guarantees that renters would be relocated to similar apartments at similar rents nearby.
Joseph A. Gardner and Norris E. Mitchell, both local investors, bought the apartment complex in June for about $2.7 million and announced plans to rehabilitate the units but keep them as rentals.
In an interview, Gardner said they had counted on getting special financing backed by the Federal Home Administration for the rehabilitation project but the financing fell through at the end of September. In the meantime, the owners have been carrying an interim loan at 2 points above the prime rate; they say they cannot do this much longer.
At the same time, tenants have had their rents raised substantially and have organized, first to protest the rent increases and now to deal with the expected conversion.
"The shock of all this came to me on June 1" when the current owners bought the apartments and announced the rent increases, said Todd Schaffner, chairman of the tenants association. "By the time the news of the conversion came down, I'm not so shocked any more."
Rents for a one-bedroom apartment rose from $185 a month to $285 on July 1, and those for a two-bedroom went from $220 to $305. These rates are still below the rents in comparable apartments nearby, all sides agree, and the owners say the increases were necessary to help defray losses on the apartments.
"The rents certainly aren't carrying the property," Gardner said, adding that the owners have already started putting substantial sums into maintenance and repair work.
"We are going to have to do something with the property or sell it," added Betty Gardner. "We can't continue to pour money into it." She said out of several investments this is the only one they have considered turning into condominiums but that they have little choice other than to sell.
"We're caught up in it. We're very sorry for the tenants , but we're caught up in it, too," she said.
For his part, Schaffner doesn't express much sympathy for the owners.
"If they're losing money, it serves them right," Schaffner declared. He is particularly upset that one of the owners, Mitchell, told tenants on Sept. 23 that there were no plans for conversion and that two weeks later a conversion looks inevitable.
"I could have told them when Reagan's budget went through that they would have a hard time getting a loan from the government," Schaffner scoffs at the owners' explanation that they were surprised that the FHA approved financing fell through.
Schaffner made his comments before meeting again with Mason District Supervisor Davis to discuss the latest negotiations with the owners, however. Told of some of the preliminary plans, he said he felt "a little less depressed than before," adding that the tenants liked Davis and trusted him to represent their best interests. Schaffner and Davis are to meet today to talk about the conversion.
Gardner said that those who cannot buy can be accommodated in rental apartments across the street, which the same investors own, at the same rents they are paying now.
Davis also said he is confident that everyone will be found a suitable place to mover and that he hopes long-term leases can be negotiated.
Schaffner said he thinks a fair bargain from the owners also would have to include prices of no more than $50,000 for the largest units, financing no higher than 15 percent and keeping rents for the elderly at the rates they are paying now for an indefinite time.
"Of the people here, I can think of only a dozen or so who could afford to buy," he said, estimating that almost all the tenants have income of less than $15,000 a year. For some people, buying a unit would mean doubling their monthly costs, he added.
Gardner said it is not yet positive that the apartments will be turned into condos though he acknowledged there were few alternatives.
While expressing optimism on the outcome of the Willston South conversion, supervisor Davis also bemoaned the demise of moderate-priced rental units generally: "The problem is if you lose the low- to moderate-income stock in the area, you're just never going to get it back."