Manchester Jewish Housing Association is closing one of its four sheltered housing schemes, forcing 18 elderly Jews to leave their homes.
Tenants of Carmel Court in Crumpsall have been asked to vacate their properties within six months.
Four are being rehoused immediately in the association's Gan Eden flats in Salford, others will be assisted in moving to Gan Eden at a later date. Discussions are ongoing with other Jewish housing providers.
It had been hoped Carmel Court residents would be moved only after MJHA had built a new development on the site of the former Mamlock House community centre in north Manchester.
MJHA bought Mamlock House for £540,000 in March and expected to build sheltered housing in agreement with Manchester City Council. But a major survey of Jewish housing needs, conducted for the association by Salford University, found sheltered housing unpopular and undersubscribed. The result has been a collapse in support from city planners for a replacement scheme for Carmel Court.
Built in 1963, the block of 65 bedsits has been considerably under-occupied for a number of years and the association is losing £60,000 on it annually.
Tenants were informed of the decision by a letter and a visit from MJHA chief executive John Gryckiewicz on Monday.
Ninety-one-year-old Anne Eskovitz, a tenant for 16 years, said the closure was "very upsetting. I don't want to move. I've been very happy here, but the numbers of people here have gone down, which is a shame."
Mr Gryckiewicz said alternative options for Mamlock House included building affordable housing for young families.
Strategic planning had been impacted by a 30 per cent reduction to part of Manchester City Council's social housing budget and major government cuts in affordable housing grants.
MJHA is awaiting the results of a strategic review it commissioned to determine, among other things, what kind of social housing to build.
"We have a wide remit to look at all housing for the community, and not necessarily for older adults," Mr Gryckiewicz added. "A number of options will drop out of that review in four to five weeks. It would be an additional strategy to our existing sheltered housing schemes rather than turning the association on its head."