Hundreds of residents of The 'Ohi'a apartments in Waikiki will be looking for a new place to live come July 1 when the building is converted into a dormitory for college students.

That has angered some residents who say that in today's tough housing market, they have nowhere else to go.

Rudy Dela Cruz, 68, who has lived in The 'Ohi'a for five months, said he signed a six-month lease when he moved in.

"I'm not very happy about this, but I guess I'm going to have to look for another place to live," Dela Cruz said. "I don't know where I'll go."

Dela Cruz hasn't received official notification from his landlord, but he said tenants have been worried since a banner advertising student housing went up outside the building more than a week ago.

Developer Peter Savio said the tenants are on month-to-month leases and that it was always his intention to eventually turn the building into a dorm.

Even as tenants face displacement, news of the additional student housing should be welcome at local universities. Booming enrollment has left Honolulu colleges short of dorm space the past couple of years and increased the demand for apartments.

In August, just in time for the fall semester and after hundreds of tenants have vacated, the building will be opened to students from the University of Hawai'i-Manoa, Hawai'i Pacific University, Chaminade University of Honolulu and community colleges.

Once a hotel, The 'Ohi'a, at 2280 Kuhio Ave., was purchased by Savio's Hawaiian Island Development Co. in 2003 and turned into a rental complex of 250 studio apartments, Savio said yesterday.

"We bought this building with the intention of building a dorm, but we weren't ready to go right away, so we just rented it long term," Savio said.

Tenants have yet to receive notices from Hawaiian Island Development Co. that their leases will not be renewed, Savio said. A letter should be sent to residents within the next week or so, he said.

But, he noted, "They're not being evicted."

In the meantime, Century Campus Housing Management LLC, a Texas-based student housing company brought in by Savio to help manage the building, is accepting applications from students to fill the dorms.

The 'Ohi'a is the latest example of what can happen when the competition for housing intensifies in an atmosphere of soaring rents and scarce apartments.

Current 'Ohi'a tenants pay an average rent of $1,000 a month, said Savio. Rates will increase to about $1,400 a unit — or an average of $700 a person for double occupancy — when the building is converted to a dormitory, he said.

Those increases will cover dormitory services such as security cameras, 15 to 20 resident assistants and dorm community programs. The conversion of the apartment building into dorm space would create 500 beds for college students looking for a place to live.

"It's going to be a true dorm — a full-fledged college dorm," Savio said.

Many students already live in the building, but Savio said if they want to return in August they must apply through Century Campus Housing Management.

Some students said they won't consider moving back when the building is converted to dorms.

"I moved out of the (UH-Manoa) dorms for a reason," said Leilani Keiler, 22, who has rented a studio apartment in the building for $975 for two years.

"I didn't even know about this. I just heard a rumor from a couple people who live in the building," Keiler said. "(Management) needs to at least give us some time to find another place."

Keiler fears she may not be able to find one that is as affordable and convenient as The 'Ohi'a.

"Most places won't rent to students," she said. "This was the only place I could find."

UH officials said yesterday they have no affiliation with Savio's company and had no knowledge that residents from the Waikiki apartment building were being displaced.

Terry Howell, off-campus housing coordinator at UH-Manoa, said the university posts possible off-campus housing sites, such as Atherton YMCA, on its Web site, but it does not inspect, recommend or endorse those accommodations.

Hawaiian Island Development Co. also owns two other private dorm buildings — Kalo Terrace Student Suites near UH-Manoa and Hana Student Suites. The Hana building, on Koa Avenue in Waikiki, was converted from a hotel to dormitory in October 2005. Century Campus Housing will manage all three properties once The 'Ohi'a is converted.

Joseph Lepore, 46, has lived in The 'Ohi'a for almost two years and said he paid a year's rent up front in September 2005. He said if he is asked to leave by July, he will expect a refund.

"We need to have a good read-over on our lease," Lepore said to his neighbor Pattie Millians outside the building yesterday.

He said the management should not be allowed to "gratuitously throw out people like that."

"There are some people in here who have no other alternatives. There are elderly folks here, there are some Section 8 people ... but they don't have the means to get out there," he said.

Millians said she's been hearing the talk, but wished residents could have been alerted sooner.

Reach Loren Moreno at lmoreno@honoluluadvertiser.com.