Nancy Reithaar is afraid she and the other tenants of the Lock Vista Apartments on Market Street are about to find out first hand what it means to "go condo."

A few weeks ago, Reithaar received notice from building management that her building was to be inspected for sale and possible conversion. She immediately wanted to know her rights as a tenant, such as how much time she'd be given to find a new home or whether management could increase rents to force her out early.

Reithaar's situation is a common one in Ballard and across the city.

In just over the past two years, there have been 242 apartment-to-condo conversions in Ballard, according to Dupre and Scott Apartment Advisors. Another 124 residential units have been lost to demolition.

The Seattle Displacement Coalition reports that 4,700 rentals have been lost to conversions citywide since 2005, contributing to a nearly 4 percent net decline of low-income rentals.

John Fox, director of the Displacement Coalition, said conversions not only diminishes the supply of available rental units, but forces people out of their communities. It's particularly difficult for seniors and low-income who are often out of touch with the rental market and can no longer afford what's available.

And there's not much. The city's vacancy rate is around just 2.7 percent, while 5 percent is considered healthy, said Seattle City Council member Tom Rasmussen, chair of the housing, human services and health committee.

The number of conversions has steadily increased in Seattle since 2004. About 930 units have already or are slated for conversion this year, Rasmussen said. Coupled with a projected population boom in Seattle, that means, "we have a crisis on hand for people coming to Seattle looking for affordable housing," he said.

Conversions have been happening for at least a decade, but the discussion surrounding the impact it has on communities and individuals is starting to gain momentum locally and at the state level.

One of the biggest issues is gaining more control through local jurisdictions over the effect of conversions on tenants. This was discussed at a recent State House Housing Committee meeting at Seattle City Hall.

Condo laws are currently controlled by the state legislature, and city leaders say there is little they can do as far as regulation. Tenants only receive $500 to help with relocation and 90 days notice to move if they opt out of buying their apartment-turned-condo.

Michelle Thomas, a representative from the state Tenants Union, said $500 doesn't even begin to cover the cost of relocation. She said it should be tied to inflation and adjusted every year.

There are also no laws limiting construction, so developers can start remodeling the building before tenants have even left. There are no restrictions on rent increases either and many have been forced out earlier than 90 days because of rent hikes.

A bill that would have required landlords to give tenants better relocation compensation and at least three months notice failed to pass this last legislative session. Rasmussen has pledged to lobby for it next session.

Adrienne Quinn, director of the city's Office of Housing, said the city supports legislation that would better protect tenants. But, she said, conversions aren't all bad because they increase home-ownership opportunities since most are cheaper than new construction.

It involves less financial risk to convert apartments because construction costs and land prices are higher than ever, according to local developers. Real-estate experts say that conversions are also being driven by Seattle's job growth and hot housing market, which is in strong demand for condos.

Joe McCarthy, from the real estate law firm Kantor Taylor McCarthy, said a weak rental demand after the dotcom boom and 911 have also been a cause. He predicted that conversions were likely leveling out.

"That trend is going to change," McCarthy said.

McCarthy also observed that it's not low-income renters that are mostly being displaced by conversions.

Less than 1 percent of rentals affordable to those making 30 percent or below Seattle's median income had been converted, based on a city study that looked at conversations in Seattle from the past two years. Roughly 14 percent affordable to people making 50 percent or below median were converted.

The median income in Seattle is around $54,000 a year.

House Committee staff member Chris Cordes said according to Dupre and Scott conversions peaked in 2006. Fox disagreed, saying that conversions have actually accelerated.

"Seattle has not seen these levels of conversions ever...it has exploded," he said. "And there's no sign that these numbers are abating."

As long as conversions are lucrative for developers, who often sell units for much more than the purchase price, Seattle will continue to see a loss in available and affordable rentals, Fox said.

Through a new tax incentive program for developers, the city is trying to create more affordable units for moderate wage workers, or those earning 80 percent or below median. But that supply is already ample, Fox said, and the real need is at the lower end.

"We are providing additional stock for (those income levels) at the expense of the population of people where the need for affordable units is overwhelming," he said. "For every one unit of housing built we are losing, three, four and five times that of affordable units."

Quinn said the Seattle Housing Levy and existing tax incentive program have so far created thousands of residential units for those earning between zero and $45,000 a year.

The housing department spends about two-thirds of its budget on housing for people making $20,000 a year or less. About one-third is targeted to the $22,000 to 42,000 income levels.

But Rep. Timm Ormsby, D-Spokane, said perhaps data should be put aside to start looking at the impact of conversions on individuals' quality of life.

"Inside all the data are real people that have gone from one situation to another..." he said.

Though the sale of the Lock Vista has not yet been finalized, Reithaar plans to do what she can to keep her $670 a month studio.

She and several other tenants rent artist's space at Ballard Works and participate in the monthly Ballard Artwalk. They are concerned that could be jeopardized if forced to move out of the area.

"The condo conversion epidemic is displacing too many people who really need affordable housing and turning Ballard into a place without diversity," said Reithaar.

Rebekah Schilperoort may be reached at 783.1244 or rebekahs@robinsonnews.com