The city has agreed to acquire and rehabilitate a seven-unit apartment building on Catalina Street, and temporarily removing tenants while it does the work.

The City Council, acting as the Redevelopment Agency, approved the deal Tuesday after a general discussion of affordable housing strategies and finances. The city paid $900,000 for the property and plans to spend more than $800,000 to fix up the building and pay relocation costs for the existing tenants.

The work includes extensive repairs to the building's drainage system, installing energy-efficient kitchen and bathroom appliances, adding improved heating and air conditioning units and restoring an illegally converted studio so it again is part of a legal one-bedroom apartment.

Rents on the refurbished one-bedroom apartments will range from $299 to $677 for low-income families that qualify for assistance.

Councilman David Gordon raised concerns about estimated rehabilitation costs averaging $107,000 per unit, as well as the city's use of a loan, also characterized as a conditional grant, to Burbank Housing Corp. The nonprofit company, which has handled several other city projects, will not have to repay the city as long as it meets goals of completing the upgrades and managing the property for use by qualified low-income tenants.

"I think we need really tight scrutiny right now," Gordon said.

Ruth Davidson-Guerra, the city's assistant community development director, emphasized that the costs may come in lower than the estimates and promised to show detailed accounting of estimates related to future projects.

"If by some wonderful occurrence the project comes in under these estimates, then Burbank Housing Corp. does not get those funds," she said.

The Catalina project was originally part of a larger low-income housing acquisition. At the same time the city bought the building, which was constructed in 1963, it also bought four multi-unit dwellings across the street. The purchases from Alexander Neilla totaled $2.9 million.

The city plans to unveil detailed plans for the other four buildings in February, according to a city report.

Councilman Dave Golonski praised the Burbank Housing Corp. and said the city's mix of affordable housing strategies, including the operation of seven neighborhood activity centers, has been successful.

Mayor Anja Reinke added that the city's affordable housing efforts have improved the quality of life for all Burbank residents.

"It really has changed the lives of a lot of people in this town," she said. "It has changed neighborhoods and the character of neighborhoods."