Proposals to renovate nearly 1,400 apartments units in the low- and moderate-income area of Arlandria have raised fears among tenants and some city officials of widespread displacement of elderly and low-income residents.

Fueled by the availability of tax-exempt-bond financing offered by the Alexandria Redevelopment and Housing Authority, two groups of developers are working on plans to purchase and renovate what would amount to about half the rental units in Arlandria, one of the poorest neighborhoods in Alexandria.

Church officials who work with displaced tenants estimate that as many as 3,000 people could be displaced if the proposals are approved by the Alexandria City Council.

"The rental units in Arlandria represent the last sizable pool of apartments that low-income people in Alexandria can afford," said William Peak, executive director of Downtown and Specialized Ministries, a program sponsored primarily by United Methodist churches in Northern Virginia.

"Many of the people living in Arlandria today are tenants displaced by gentrification of other Alexandria neighborhoods," said Peak, "and . . . they are very frightened that if these plans go through, there will be no place to go."

Arlandria, an area bounded by Mount Vernon Avenue and Russell Road on the east, Four Mile Run on the north and Glebe Road on the south, is a neighborhood of predominantly low-rise garden apartments built during the 1930s and '40s.

The area is best known locally as the site of severe flooding during the '60s and '70s, when development to the north and west increased rain runoff into Four Mile Run and made a bathtub out of much of the neighborhood.

While the flooding problems have been solved, Arlandria today is still characterized by a depressed commercial district along Mount Vernon Avenue and aging housing stock that has absorbed many of Northern Virginia's poor and transient.

With gentrification closing in, however, developers have taken an interest in purchasing and rehabilitating the garden apartments, and one group is seeking changes in the land-use plan to allow town-house development on several of the centrally located blocks.

The city planning department recently finished a revitalization plan for Arlandria West, the residential section that recommends that the city ments, and one group is also seeking changes in the land use plan for the city to allow town-house development on several of the centrally located blocks.

The city planning department recently finished a revitalization plan for Arlandria West, the residential section, that recommends the city "stabilize the neighborhood by encouraging a broader mix of household incomes among residents, and encouraging a more balanced mix of ownership versus rental housing hopportunities through development and possible redevelopment or conversions . . . and upgrade the housing stock by supporting rehabilitation efforts."

Residents of Arlandria, however, say they see the plan as a way of pushing out low-income people, and while some are receptive to the idea of having their units rehabilitation, as many as 70 percent are not expected to be able to afford to move back into the units at the rents the developers would charge to cover the costs of the renovations.

"The problem with the proposals is that there is a very high number of low-income people in those units," said Mark Looney, coordinator of Landlord-Tenant Relations for Alexandria. "If the proposals are approved it would mean significant relocations problems for the city."

The Alexandria housing authority has already given preliminary approval to issue up to $15 million in tax-exempt bonds to finance the purchase and renovation of the Presidential Gardens, a 393-unit complex of garden apartments at Russell Road and Mt. Vernon Avenue.

Angus T. Olson, executive director of ARHA, said the developers, Presidential Gardens Partnership, is a group from Arlington that includes Lola Reinsch and her husband, Al Pierce; Paul Neff; Ira Saul; Elizabeth Barclay, and Mark Tracz of George Shaffer & Associates. The group has a contract to purchase the complex for approximately $10 million and plans to do a substantial renovation of about $17,000 per unit.

Rents at the complex today are $333 for a one-bedroom and $366 for a two-bedroom, not including utilities. According to Tracz, 25 percent of the tenants would be eligible for federal housing assistance, although there is no longer enough subsidy money for any extra housing units in Alexandria.

Looney, of the landlord-tenant office, said that his office believed as many as 64 to 75 percent of the tenants would be displaced by the proposal. There are 70 elderly people and at least 15 handicapped residents.

Under federal laws governing use of tax-exempt financing, the developer would be required to set aside 20 percent of the units for low- and moderate-income people, defined as people earning 80 percent of the metropolitan area's median income. The developer is also required to keep the complex rental for half the term of the bonds, in this case at least ten years.

The set-aside units at Presidential Gardens would be rented for $453 for a one-bedroom and $533 for a two-bedroom, not including utilities. The market rate units, the other 80 percent, would be rented for $525 and $655, not including utilities.

L ooney said that, according to a recent apartment survey in Alexandria, the vacancy rate in Alexandria is currently 1.19 percent, and the average one-bedroom unit rents for $496. The average two-bedroom rents for $611.

The Bay Group, a development firm from Boston, is planning to purchase roughly 1,000 other rental units in Arlandria, including the buildings of Dominion Gardens, Warner Towers, the Brookeside Apartments, the Bruce Street Apartments, and the Dixie, Alabama and Green apartment buildings.

The majority of the units, 879 of them, are known as the Layton Estates, a single holding that has been up for sale for several years. Olson said that the Bay Group planned to purchase the units with tax-exempt financing, and would probably be asking for between $45 million and $50 million to buy and renovate the units.

The Bay Group would also be subject to keeping 20 percent of the units for low- and moderate-income people, though with the high median income in this area, said Looney, it was likely that between 70 and 90 percent of the tenants would be displaced.

"There is concern that if ARHA was not offering tax-exempt financing these projects and the displacement would not take place, but in Arlandria the market pressures are there even without the available financing," said Alexandria City Councilmember Robert Calhoun. "With the tax-exempt financing we get some units set aside and a commitment to rental for a time. While I'm not sure we accomplish a great deal, I believe we are obliged to do what we can."

But for Wendy Kaplan, a member of the landlord-tenant board, there are concerns that the city is not doing enough for the people displaced.

"We're really caught between a rock and a hard place with these tax-exempt bond financed projects because they are very nice proposals but would mean rental increases that the people there can not afford," said Kaplan.

"The developers will tell you that if they don't get the tax-exempt financing the project will be bought for a condominium conversion, but I'm not sure the condominium demon is still out there," sid Kaplan. "Maybe the city needs to consider taxing condominium conversions and then use the money to assist with more housing."

The city council will be holding a public hearing on the Arlandria West plan today, along with a hearing on the tax-exempt bond issue for Presidential Gardens. The Bay Group will also present its plans for the Layton Estate properties to the council at noon, although a bond issue for that proposal is not expected to be before the council until next September.