Island Creek West on Tremont St. residents may soon see their rents increase as their leases come up for renewal, as town committee members and state legislators work to maintain the units’ affordable housing status.

The Housing and Urban Development Department in Washington, D.C. recently denied an application submitted by Beacon Management, the company that manages Island Creek, for enhanced vouchers for tenants. Enhanced vouchers keep rents at a fixed rate in affordable housing units.

With the denial of the application, tenants will now be looking at a three-percent increase to the consumer price index percentage when their lease is renewed this year. Next, year it will increase again and yet again in three years, if the issue is not resolved.

Diane Bartlett, chair of the Affordable Housing Trust, said tenants have been notified of the situation and both town and state officials are attempting to mitigate the situation.

“My heart goes out to the tenants,” she said. “If you are a tenant and your rent is about to go up, or has just gone up, it is certainly alarming.”

Bartlett said the rent is around $800 for tenants at Island Creek West, with the exact figuring differing for each, depending on their income. With a significant demographic of elderly and retired tenants, Barlett said she is concerned they will want to relocate and will have no place to go.

“Many of these people do not have any other options,” she said. “With the escalation in gas and oil prices, where are our citizens supposed to go when they can no longer afford to stay in their houses?”

Selectman Shawn Dahlen said the mortgage subsidy Island Creek attained when it received the permit for affordable housing has expired and once it expires is no longer eligible for another subsidy, which means it can go to market-rate.

“They are anxious to look for another subsidy, but they’ve got nothing in place,” he said. “It is only a small por- tion of the area, not the entire facility.”

Liz Pelvinen, a resident at Island Creek West, said she was informed in July that, effective Aug. 1, her rent would increase. In fairness to Keith Properties, Inc., the management company at Island Creek until about a year ago, affected tenants had received letters of notification explaining the Section 13A housing for moderate and low income seniors would be expiring and had meetings with Keith Properties to share information.

Section 13A is a mortgage interest subsidy provided to about 60 privately owned developments that reduced rents for about 6,000 apartments in Massachusetts. The number of 13A apartments has decreased in recent years because some owners have chosen to pre-pay their 30- to 40-year mortgages after 20 years, effectively ending the subsidy and the restrictions that keep apart- ments affordable. Affected residents are those who live in what is dubbed “Island Creek West,” which are buildings 14 through 24. Island Creek East, the buildings in the front, fall under Section 8 housing.

“I don’t think any of us realized the ramifications of the situation,” Pelvinen said. “We are all shocked at how quickly the rent went up.”

Pelvinen experienced an annual increase in her rent in November 2012 and when her rent was raised again in Au- gust, she said the impact was significant. Talking with other community members, she said moving is a definite concern for the 55+ demographic.

“Many people have lived here for many years and used to have higher incomes and now no longer have that as a supplement,” she said. “This is such a lovely complex, with a strong sense of community.”

Bartlett also expressed concern that residents might forgo necessary items in order to make ends meet. The most common necessities that fall to the wayside are medications, food and heat.

While it is possible the rent for Island Creek West could reach above affordable hous- ing status, Bartlett said she is hopeful that with so many people working to resolve the issue, the increases will be stopped before the fourth year.

Statewide, there are about 4,000 affordable housing apartments that are vulnerable as a result of the denial by the Housing and Urban Development Department.

“The residents’ concerns are not without merit,” Bartlett said. “Please know we have everyone working very hard on it and will try to come to a resolution as soon as possible.”

A meeting will be held at Island Creek on Sept. 9 at 5:30 p.m. with town and state officials to discuss possible solutions.

Clipper staff writer Susanna Sheehan contributed to this story.