Mayor Greg Nickels released $25,000 last week from a $350,000 fund he'd frozen that the City Council had set aside to aid renters being displaced by condominium conversions.

The temporary hold was necessary to determine if the funds would be needed to supplement an unexpected loss of about $600,000 in federal funding, according to Seattle City Council central staffers.

The City Council designated the money in the 2008 budget to increase the $500 developers are required by state law to pay displaced tenants to aid in the search for housing. It was supposed to be available starting Jan. 1.

Council member Tom Rasmussen, who's transitioning out of his role as chair of the housing committee, said the council would rather draw from other funding sources to fill the gap.

"We need to see what those options are," Rasmussen said. "We are facing a very difficult challenge right now."

The deficit is coming from community-development block grants that the city receives annually from the federal government, according to a memo from Michael Look, manager of the Community Development Block Grant Program in the Seattle Human Services Department. Funding to aid in housing for people with AIDS and the development of affordable housing were also cut.

It's possible the full $350,000 could be restored as displaced renter aid, but the city is still reviewing how it will cope with the reduction in federal funding as it holds on to the rest of the pot.

The $25,000 released last week is expected to meet the needs of tenants in need now, according to Al Poole, of the Human Services Department, the city office handling the funds.

John Fox with the housing advocacy group the Seattle Displacement Coalition thinks there are more renters out there in need of help than the city knows about.

"I'm betting there is a greater need out there and that they do not have a complete list yet of all eligible tenants and all relevant buildings," he said.

Fox, who along with other advocates pushed the mayor to release the funding, said he'd continue to "keep a fire" under the city department overseeing the rental assistance aid to ensure it's done "quickly and right."

Rasmussen said the council plans to watch that closely and will ask the Human Services Department to give them regular updates.

"We are expecting a report back on the level of need in the community and how much they've spent," he said.

The city Department of Planning and Development reports that 42 rental units total have been scheduled for conversion from November 2007 through January this year.

Rasmussen said there were zero condo conversions in December and the number in the early part of this year has declined from the previous year. Still, 2007 was the highest on record for apartment-to-condominium conversions in Seattle.

Some are attributing the lower number to the mortgage crunch. With fewer people qualifying for loans there are more condos on the market.

The funds are really meant to help renters temporarily as bills seeking to put more onuses on the developer to pay adequate relocation assistance move through the Legislature, said Rasmussen. Among one of the provisions, the potential law would require the developer to pay a tenant up to three times the monthly rent to help with moving.

In the meantime, "the renters need that money now," Rasmussen said.

Tenants who received notice to vacate their homes due to conversion since November should call Solid Ground at 694-6700. The non-profit human services agency, located at 1501 N. 45th St., can answer questions and handle applications.

Renters could receive up to $2,800 in assistance. Only those earning 80 percent or below area median income should apply.

It's possible to still be eligible for aid if the renter received notice before last November, so it's a good idea to call and check, said Poole.

Poole said his department would get the word out through local media, the office's survival service email database and advocacy groups like the Seattle Displacement Coalition.

"We don't expect any problems getting the word out," said Poole.

Rebekah Schilperoort can be reached at 783-1244 or rebekahs@robinsonnews.com.