The city is seeking a private company to buy and manage its 12 affordable housing complexes to relieve the city of more than $6 million in annual management costs.

While the city would save money, officials have warned city housing project tenants of probable rent increases if a private owner takes over.

Mayor Peter Carlisle on Friday announced the Hawaii Affordable Housing Project Initiative, a proposal he first raised in his State of the City address last year.

"Transitioning ownership of these projects will relieve the city of the responsibility and cost of operating and managing these projects," Carlisle said. "Further, it will relieve our taxpayers of the responsibility of paying for future capital improvements and repairs to these buildings."

Sam Moku, director of the Office of Community Services, said the city spends about $6.7 million annually managing the complexes.

Any buyer would have to agree to lease the land from the city for 65 years and keep all units as affordable housing for the duration of the lease, Carlisle said.

The 12 complexes include 850 apartment units that qualify under the U.S. Department of Housing and Urban Development guidelines for low- and moderate-income households with incomes of 80 percent or less of the median; 189 "gap group" apartments for families with incomes of 80 percent to 120 percent of the median; and 218 market-rate rental units, according to the city.

The sale, subject to City Council approval, is being managed by brokerage firm CB Richard Ellis, which is seeking a single buyer for all 12 properties.

Councilwoman Tulsi Gabbard noted that 62 percent of the affordable units are within her district, which covers the area from downtown to Kalihi.

"It’s been incredibly important to me to make sure the community had a very strong voice in these big changes that we’re going through," she said.

Properties are being appraised, and city officials would not estimate their worth.

The request for bidders went out Wednesday, and Scott Gomes, executive vice president of CB Richard Ellis, said the offering already has attracted "dozens and dozens" of replies.

"The investment community has stood up, taken notice and responded in a very positive manner to the offering," Gomes said.

City officials say potential buyers will spend the next few months researching and appraising the properties, and the city expects to receive the first bids by April.

A proposal could go before the City Council for approval by this summer, Gomes said.

The move toward privatization was applauded by the group Faith Action for Community Equity, or FACE, which has worked to keep residents informed of the city’s plans.

"I think it’s great," said the Rev. Bob Nakata, a community activist and FACE board member. "They’ve held meetings in every single one of these housing complexes and involved the residents."

In meetings with tenants last year, the city said it could keep rents from increasing dramatically and keep the units affordable by putting a cap on annual rent hikes in the lease for the properties.

At a meeting with Chinatown Gateway residents in September, Christopher Terry, a branch chief with the Department of Facility Maintenance, said rent would go up, but he couldn’t say by how much. He said the rent, below federal affordability guidelines, would still increase if the city were to retain the properties.

Officials on Friday did not say how rents would be affected.

Moku said no residents would be displaced during the transition.

The buyers would clean up and improve exterior and public areas of the properties while individual units would be renovated and refurbished as turnover occurs, he said.

"There won’t be any disruption," he added.

He said the city took residents’ concerns to heart.

"We put together something that we believe is beneficial for the residents as well as the taxpayers," Moku said.