By MARK HIGGINS
SEATTLE POST-INTELLIGENCER REPORTER

The loss of housing, especially affordable housing, on First Hill is a critical issue, says Debby Gibby, president of the First Hill Community Council.

The value of First Hill real estate is rapidly increasing, Gibby says, noting that in the last nine months seven apartment buildings have been sold. The new owners come in, make some changes and usually raise rents -- sometimes as much as $400 a month in the case of one building, Gibby says.

"Rents are on the rise up here again, big-time. It used to be that if you were south of Madison Street the rents were cheaper," says Gibby. "Not any more."

Competition for apartments is expected to intensify with the completion of Seattle University's new law school in 1999. It's expected to draw 800 to 900 more students and faculty to First Hill.

The university, hospitals and most residents understand the need for affordable housing. But the issue has sparked debate between the wealthy, who typically live north of Madison Street, and working-class residents, who typically live south of Madison.

Virginia Mason recently struck a deal in which one of its employee parking lots on Minor Avenue between Spring and Seneca streets will be used as a site for 97 units of affordable housing for seniors.

"We believe providing safe, affordable housing is better than having surface parking," says Todd Johnson, Virginia Mason's director of properties. The hospital will get back the same amount of parking, which will be built beneath the new housing units.

The housing will help replace the loss of the Waldorf Towers Apartments, which will be torn down as the Washington State Trade and Convention Center expands.

The replacement housing was controversial. Some residents complained that First Hill already has an abundance of subsidized housing. But others, including Patsy Bullitt Collins, circulated petitions backing the project.

"I'm a great believer in low-income housing," says Collins who several years ago sold a parking lot "at a great discount" so Seattle Housing Resources Group could build Cascade Court Apartments at 1201 Summit Ave.