RENTERS WORRIED BY RATE INCREASE; LOW-INCOME RELIEF SET TO EXPIRE SOON.

Byline: Harrison Sheppard Staff Writer

Tess Friedman, an 83-year-old widow, has lived in Warner Center Apartments for 12 years and always assumed she'd spend the rest of her golden years there.

But Friedman and hundreds of other senior citizens and low-income families said they are virtually being forced out of their homes because a city housing subsidy ended this month. Their rents will nearly double.

Many said they were not warned about the eventuality of the subsidy expiration when they moved in, even though city officials and the property owner knew about it from the beginning.

``It was some shock,'' said Friedman, whose rent will go from $670 to $1,200 by next June. ``It's a shock when you think your rent is going up double what you're paying. Sure, we'll give them a raise, we'd be happy to. But twice as

much as what we're paying? It just seems to be too much for everybody.''

The subsidy came under a 1985 deal that gave the developer tax breaks on $140 million in private financing in exchange for discounted rents in a fifth of the complex - 256 units - according to city Housing Department officials.

When the subsidy expired, the landlord was entitled to raise rents Oct. 1 to full market rates, meaning increases of 50 percent to 80 percent, with 30 days' notice. Instead, at the city's urging, the landlord spread the increases over a year, gave five months' notice and is offering a moving allowance of $400.

``I'm trying to find a very difficult median that can work for everybody,'' said Greg Garmon, regional vice president for AIMCO, a Denver company which has managed the property since October 1998. ``That's not always easy or practical. We're trying to do the best we can on this.''

Garmon said he hopes to give Warner Center residents first crack at another property now under construction that AIMCO will manage in Simi Valley, with 200 affordable units.

City officials said the owner is responsible for telling tenants about the program.

Garmon's company has owned the Warner Center apartments for about a year, long after most tenants moved in. The original owners of the complex could not be reached for comment.

The Housing Department has also scheduled a meeting Monday to answer residents' questions.

Faced with the embarrassing situation, city officials are scrambling to rewrite the rules for such programs, and trying, with little success, to find new housing for about 250 tenants.

Councilwoman Laura Chick, who has fielded many complaints, said the Housing Department is now drafting new regulations for such programs in the future and is expected to bring them before the City Council in January.

``I think this should have been written differently,'' Chick said. ``A phase-out plan should have been worked out in detail, and part of that should have been notifying the tenants way in advance. And even then it still would be traumatic.''

The subsidy gave the developer tax breaks that helped finance the construction.

No taxpayer money was used, but the city acted as a conduit allowing the developer, a real estate partnership called Mayer Warner Center Limited, to finance the construction through tax-free bonds, said Bobken Simonians, a project financing manager with the Housing Department.

The funds were to be paid back over 25 years, but the subsidized housing portion was scheduled to end halfway through - in other words, Sept. 29, 1999.

The problem was, nobody explained this to the tenants.

Many tenants in the program said when they signed their leases, they assumed the subsidy would continue forever. A few said they knew it would end but were not told when.

The first they heard of it was in April, they said, when a letter announced the increases, taking place in stages from Oct. 1 through late next year.

``I had no idea. None of us did. We got this letter, and people went nuts,'' said Gayle Brennan, 47, a divorced mother of two whose rent is going from $861 to more than $1,400. ``Everybody's hysterical. Where am I gonna go?''

And since most of them are elderly, they say relocating will be a strain on them emotionally, physically and financially.

``Moving for us is quite an effort,'' said 12-year resident Max Santer. ``I'm 86, my wife is 77 - that makes it very difficult. I'd have to hire a whole fleet of men to come in here and pack everything. I couldn't do it.''

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Photo: Tess Friedman wonders how she can pay $1,200 per month to stay in her Warner Center apartment. The new rate is a $500 increase.

John McCoy/Staff Photographer