The Bronx apartment building recognized as a birthplace of hip-hop may be saved from gentrification, for the time being.

In an unusual move, the city’s Department of Housing Preservation and Development has rejected the sale of the 100-unit building at 1520 Sedgwick Avenue to a high-profile real estate developer because the financing of the sale was not viable under current rent restrictions, according to a letter released by the department on Monday.

The letter represents the first time that the department has rejected the sale of a building under the Mitchell-Lama affordable housing program for financial reasons, government officials said. The sale price, which housing advocates said significantly exceeded the assessed value of $7.5 million, alarmed the community because it seemed likely that the prospective buyer would have taken the building out of the program, opening the way to higher rents.

Housing advocates hope the city’s decision will reduce speculative sales and gentrification of other buildings constructed under the state’s Mitchell-Lama housing program, which offered developers low-interest mortgages and tax abatements in return for caps on rents.

“This is a precedent-setting move,” Senator Charles E. Schumer said at a news conference Monday afternoon in the community room of 1520 Sedgwick, where D.J. Kool Herc in the summer of 1973 presided over a musical sound that eventually gave birth to the hip-hop genre.

“That means this building can’t be bought for this huge amount and be flipped,” Senator Schumer said.

Established in 1955 by the New York State Legislature, the Mitchell-Lama program spurred the development of about 105,000 units of housing in 269 developments. In recent years, after the 20-year time limits on the contracts expired, housing advocates said they have seen Mitchell-Lama buildings being sold to investors who hold on to the buildings for a few years then sell them at a markup to other real estate investors.

“We don’t know where the deals will end, but there is no way it could end in a way that is in the best interest of the tenants,” said Maggie Russell-Ciardi, the executive director of Tenants and Neighbors, a housing advocacy group that has been involved in the effort to create a tenant buyout of 1520 Sedgwick.

In a letter dated Feb. 28, the Department of Housing Preservation and Development informed the parties that “because the proposed purchase price is inconsistent with the use of property as a Mitchell-Lama affordable housing development,” the department could not approve the transfer of the building from the current owners to 1520 Sedgwick GP LLC, an investment group.

Residents hailed the decision as a victory for moderate-income tenants. “It’s not just about 1520, it’s about all affordable housing,” said D.J. Kool Herc, whose family lived in the building after immigrating from Jamaica. He said that Mitchell-Lama and other housing programs have historically played an important role for the city’s immigrants. “Every family needs a piece of the American dream.”

The department’s decision could reopen the possibility for a tenant-led purchase of the building, which had been in negotiations in January.

A lawyer for Frank Phelan, one of the building’s owners, did not return a call for comment.