NAHB says outlook good for multifamily housing growth

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Recent economic, demographic and political developments have improved the outlook for building and renting new apartments, according to a release from the National Association of Home Builders.|ret||ret||tab|

"The economy and housing market have stabilized at a healthy and sustainable level after more than a year of interest rate tightening moves by the Federal Reserve," said Robert Mitchell, president of the 200,000-member NAHB, in the release.|ret||ret||tab|

"Equally important, demand for rental housing is benefiting from an influx of young households, immigrants, empty nesters and people looking for apartments in urban settings," Mitchell added. "And, as a result of NAHB's efforts, for the first time in more than a decade the presidential candidates and both political parties are looking at a range of federal initiatives to increase the supply of affordable rental and for-sale housing." |ret||ret||tab|

NAHB projects 335,000 multifamily housing starts this year, about the same number of units built in 1999. Demand for rental apartments is holding up, with a typical new apartment building approaching 70 percent occupancy within 90 days of completion. |ret||ret||tab|

The number of young households people age 20-29 who are moving into the rental market for the first time will increase by nearly 5 million between now and 2010 and will account for 13.6 percent of the nation's population. |ret||ret||tab|

Today's strong job market for entry-level workers gives young people an opportunity to break away from their parents' homes and rent apartments earlier in their lives than a decade ago, Mitchell said. More than 40 percent of all renter households are comprised of single individuals.|ret||ret||tab|

Mitchell added that there is a growing demand for upscale luxury apartments, particularly among empty-nesters who want to live in an urban setting and prefer renting over buying.|ret||ret||tab|

Consequently, both the square footage of living space and the amenities included in apartments have been steadily increasing in the last 10 years. |ret||ret||tab|

The average apartment has nearly 1,100 square feet of space today, up from 955 square feet in 1990. High-speed Internet connections, multiple telephone lines, two or more bathrooms, upscale kitchens and common-area amenities such as exercise facilities, business meeting rooms, reserved and covered parking and 24-hour security are commonplace in the upscale rental market. |ret||ret||tab|

On the political scene, Mitchell said there is still a good chance for expanding the Low-Income Housing Tax Credit program before Congress adjourns later this year. The tax credit, which was expanded several months ago in a bill approved by the House with strong bipartisan support, could be considered as part of an omnibus tax bill in the final days of this session. |ret||ret||tab|

According to NAHB, it is the only federal incentive or program on the books today that stimulates construction or rehabilitation of affordable rental housing at below-market rents. About 35,000 new and 35,000 rehabilitated apartments will be made available to moderate-income families under the program this year. |ret||ret||tab|

"For years, Congress and the administration have focused on giving low-income renters vouchers to assist them in finding affordable rental housing and covering their monthly rental payments," Mitchell said. "Now the debate has shifted. More and more members of Congress on both sides of the aisle recognize that we have a serious supply problem and need to look for ways to stimulate construction of affordable rental housing."|ret||ret||tab|

The GOP platform, for example, calls for the adoption of a "balanced national housing policy" that recognizes the needs and interests of all citizens, including renters. Likewise, the Democratic Party's platform recognizes that "in too many communities owning or renting an affordable home seems an impossible dream." |ret||ret||tab|

Both parties support the idea of expanding the Low-Income Housing Tax Credit.|ret||ret||tab|

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