New York, NY —

A local nonprofit says the credit crisis created a slow down in the number of subsidized apartments bought by developers and converted into market rate apartments.

Each year the Community Service Society puts out an annual tally of how many low rent subsidized apartments were lost. According to its analysis, nearly 3,700 went market rate in 2007, about 35 fewer than the previous year.

The report's author Tom Waters says the loss rate during the first half of the year was setting new records. Then it suddenly stopped.

WATERS: The reason for that I think is not that the fundamental causes of the losses of affordable housing went away or changed but that it became much more difficult for real estate investors to get the financing that they need.

REPORTER: Waters believes the current slow down will only last as long as the credit crisis does.

In his report he also cautions about loose underwriting terms that were used to purchase dozens of subsidized and rent regulated apartments. He says the deals are in trouble because owners over paid and borrowed money based on false cost projections.