Hundreds of housing advocates mobbed City Hall yesterday in a show of support for a new bill that would allow tenants the right of first refusal to buy apartment buildings if landlords opt out of federal affordable housing programs.

Under the bill, landlords of Mitchell-Lama, Section 8, and other federally subsidized housing who want to opt out of the programs would have to first offer tenants the opportunity to buy their buildings at a price determined by an appraisal before attempting to sell them at market rates.

The bill comes at a time of strain for the affordable housing market, when Mitchell-Lama programs are expiring and a strong real estate market has motivated landlords to make the transition to market-rate housing from affordable units.

“We have already lost over 44,000 rental units and face a loss of over 110,000 more units in the next few years if we don’t act now to stop it,” Council Member Alan Gerson, who sponsored the Tenant Empowerment Act, or Intro 186, said at the hearing. The bill has the backing of Speaker Gifford Miller and 22 other council members.

While the bill doesn’t spell out how tenants would pay for the building purchases, Mr. Gerson said he envisions the creation of a trust fund that could cede loans to tenant groups to assist them.

Nonprofits would also be tapped to help facilitate the buyouts and manage the buildings.

Housing Commissioner Shaun Donovan testified yesterday that the bill violates the state’s eminent domain law. Requiring a landlord to offer his property first to tenant organizations would take away the landlord’s right to freely dispose of a building, he said.

“The city cannot require a private owner to relinquish ownership of property without following the procedures specified in the state’s eminent domain procedure law, including a determination by the court of a property’s fair market value,” Mr. Donovan testified. “This bill would require that the owner accept an offer to purchase the building at the higher of either the value set by a board of appraisers or the price offered by a bona fide purchaser, without complying with the requirements established by the state law.”

He sees other weaknesses in the bill: the use of appraisers to determine the value of buildings could mean tenants end up overpaying for properties, and the lack of a mandate that the housing remain affordable means that the buildings eventually could be converted into market-rate housing.

Every seat at the council hearing was filled and several housing advocates testified in support of the bill.

Kim Smith, a resident of the Ennis Francis Houses on 124th Street and Seventh Avenue, said she could face eviction because the landlord of her Section 8 federal housing projects is trying to opt out of the Mitchell-Lama program.

“Central Harlem is going through a renaissance, and the people who have lived here all their lives and made the neighborhood what it is can no longer afford to live here,” she said.

Ms. Smith and her fellow tenants have been working with the not-for-profit Abyssinian Development Corporation in hopes of eventually purchasing their rental units.

Several council members argued at the hearing that preserving affordable housing units is the first priority for staving off a housing crisis.

Mr. Donovan argued that financial incentives such as tax exemptions are critical to maintaining sufficient levels of affordable housing.

“If you don’t have the financial component, you’ll never have the resources to buy the building. Ultimately, financing is the most important ingredient so that tenants can afford to buy the housing,” Mr. Donovan said.