The National Corp. for Housing Partnerships has refused to lower proposed rent rates in its plan to renovate the Abingdon Apartments in north Alexandria with tax-exempt financing, despite growing concern among some Alexandria residents and officials that the proposed 50 percent rent increases will drive most of the residents out of the apartment complex.

The Alexandria City Council was scheduled to take up the issue of approving the controversial $11 million tax-exempt bond issue for the project today.

NHP, chartered by Congress is 1968 to encourage private investment in low- and moderate-income housing, is seeking to purchase and rehabilitate the 242-unit Abingdon, at 1600 West Abingdon Dr., one of Alexandria's last affordable apartment complexes.

The funds for the purchase would be raised by the Alexandria Redevelopment and Housing Authority through the sale of tax-exempt industrial revenue bonds, and then lent to NHP. ARHA, which has supported the proposal, would earn a fee of over $100,000 on the transaction, and an annual administrative fee of one-eighth of a percent of the remaining bond balance per year until the bonds are repaid.

The Alexandria landlord-tenant board voted last month to recommend that the city council reject the proposal, on the basis that the rents NHP would be charging after the renovation were "too high for as many as 98 percent of the residents."

NHP officials said this week that they were "still negotiating with the seller to come up with a package that would be more acceptable to the city council," but that they did not know if they would have an alternative proposal to present to the council today.

The 40-year-old apartments are owned by Raymond N. Nourha. They are being sold through his company, Raymond Enterprises N.V. of the Netherlands Antilles, for $6.25 million, or about $26,000 a unit. Industry analysts say that the average sale of older, garden apartment units in the suburbs are between $20,000 and $25,000 a unit.

Rents at the units, which are sandwiched between the George Washington Parkway and the railroad tracks, are $375 for a one-bedroom and $400 for a two-bedroom today. Under NHP's proposal, 80 percent of the units would be rented for $625 for a one-bedroom and $725 for a two-bedroom after the renovation.

Under the federal laws governing use of tax-exempt financing, NHP would be required to set aside 20 percent of the units for low- and moderate-income people. NHP has set the rents on the units for low- and moderate-income families at the highest level allowed under the federal regulations, proposing to rent one-bedroom units for $536 and two-bedroom apartments for $645 after the renovation.

"I looked in the paper last weekend and found market-rate one-bedroom apartments for rent for $515," said landlord-tenant board member Steve Mellette . "Here you have a company chartered by Congress to help get housing for low-income people and yet their proposal amounts to a condominium conversion because most of the people won't be able to stay. I can't understand why they can't make the rents lower, at least for the units set aside for low-income people."

Quixsearch Apartment Rental Centers at Woodward and Lothrop said that the average one-bedroom apartment in an older, rehabilitated low-rise apartment in Alexandria was currently renting for $520 a month, and two-bedrooms were renting for between $625 and $650.

NHP Regional Director, Jack Koczela, said that the corporation's legal counsel had been conferring with Alexandria councilmembers this week in an effort to win support for their proposal.

"What bothers me is that our proposal meets all the federal and city guidelines on this kind of project," said Koczela. "We can't get the rents any lower."

The Abingdon project has gained attention outside of Alexandria, as other local officials struggle with the concept of using tax-exempt financing for projects that may not actually help meet public policy goals.

Stephen N. Abrams, a Rockville city councilman, wrote Alexandria Mayor Charles E. Beatley Jr., last month, describing a similar project in Rockville that the city council had approved last year. Although the developer was meeting all the local and federal regulations for such a project, a city-sponsored survey of the residents found that of the 235 households in the project, 192 had been forced to relocate.

Rents at the project -- the Summit Apartments renovated by the Artery Organization -- had been increased from between $315 and $400 before the renovation to between $525 and $695 after the renovation.

"Hold out on approving a tax-exempt bond issue for the Abindgon project until you can be assured that the purchase price agreed to between the existing property owner and the new property owner reflects market conditions," Abrams urged the Alexandria City Council in his letter. "Only then should you consider the use of tax-exempt financing to make the package more attractive in exchange for consessions."

Beatley, however, said that he thought Abrams letter sounded "fairly negative" and that he had not responded.

"National Housing Partnerships has not offered a compromise yet, but they may," said Beatley. "They are one of the best developers around and if anyone is going to be able to do this project it's them. This proposal will get a fair shot."