Woe unto the Washington apartment hunter.
Once, the Washington area offered an abundance of new apartments for rent, and landlords often had to lure tenants with the promise of a month's free rent and a bottle of campagne. Not anymore. Today's renter usually ends up on somebody's waiting list.
Tenants new to Washington -- many of whom arrive with unrealistic expectations -- say their search for acceptable, affordable rental housing is frustrating. Some look for weeks and finally are forced to rent apartments they don't really like in areas where they didn't intend to live.
The squeeze is not hurting only the traditional victims of rental shortages, the poor. The middle class is hurting as well.
Take the case of Carmen Avila, 28, who recently left Austin, Tex., and a comfortable, $220-a-month one-bedroom apartment overlooking a lake to work in Washington with the National Hispanic Youth Employment Project.
For weeks, Avila, who earns about $20,000 a year and is ineligible for public housing, searched for a place to rent. She said she found a series of rundown buildings, tine condominiums rented out by investors at what she considered outrageous prices; and waiting lists. "It's been a traumatic trip," Avila said.
After rooming with a friend for more than a month, Avila snapped up a one-bedroom apartment at The Latrobe, a new building near downtown that opened recently. She said she feels lucky to have a place of her own -- but her new rent is $447 a month, plus utilities.
Like the rest of country, the Washington area is suffering from an acute shortage of available rental housing. The vacancy rate here is 4 percent, and housing experts consider that very tight.
A decade ago, the vacancy rate here varied from jurisdiction to jurisdiction but probably averaged about twice that rate, according to John T. O'Neil, executive vice president of the Apartment and Office Building Association of Metropolitan Washington.
A number of trends have combined forces to bring on the rental squeeze. Soaring land and building costs have almost wiped out new construction of apartment buildings. Condominium conversation mania, a lack of maintenance and abandonments are eroding the availability of existing apartments. Rents often no longer cover skyrocketing operating costs and raising rents simply drives away prospective tenants.
For these reasons the area's tight rental supply is likely to worsen in the next few years, experts say.
For moderate and low-income tenants, the choices are becoming more and more limited -- and more expensive.
"A lot of people need rental housing, and it's not just the elderly and the low-income," said Irving Kriegsfeld, president of a property management firm and former chairman of a commission that studied the District's housing problems.
"It's students, people who are here for a short time because of government-related assignments, young faculty members, nurses. The market just doesn't provide housing for them. There are many people who can't buy houses," Kriegsfeld said.
Builders filed permits to construct nearly 36,000 nonsubsidized apartments between 1970 and 1974 -- apartments built without government assistance and designed for low-income people, according to figures compiled by the Metropolitan Washington Council of Governments.
But, from 1975 to 1979, permits to build fewer than 4,000 nonsubsidized apartments were filed, and an additional 5,000 units were constructed through a special government porgram offering below market-rate Financing.
Morton J. Schussheim, a housing specialist who has studied the area's problems, says the developer of a garden-style apartment building must charge more than $600 a month rent to cover the $40,000 development cost of a two-bedroom apartment. Rents would be higher in elevator buildings, he said.
The spector of such high rents frightens many would-be builders away. They are afraid only a small number of tenants could afford the apartments -- and that many will decide they're better off buying a condominium or home with a similar monthly payment.
Nationally, the vast majority of rental units built in the last few years have been subsidized, either through government rent subsidy or insurance programs. About 300,000 of the 430,000 apartments built in the nation last year were subsidized, said Hunter Bourne, research director for the National Rental Housing Council.
Up to six out of every seven rental units built nationwide this year will be subsidized, Bourne said. Rent controls -- or the threat of them have kept many builders and lenders from entering the rental market, he said.
The Latrobe, at 15th Street and Rhode Island Avenue NW on the former site of a parking lot, is one of only a few apartment buildings constructed or under construction in the area that aren't built for tenants who have rent subsides. Others include The Heights on 13 acres of land near Catholic University in Northeast Washington and a section of the Old Georgetown village complex in Rockville, according to Metropolitan Washington Council of Governments records.
A few properties have a combination of subsidized and nonsubsidized apartments.
At the Latrobe, the developer, the National Corp. for Housing Partnerships, had another kind of federal assistance. It enabled cost-cutting through permanent financing at only 7 1/2 percent interest -- well below today's double-digit market interest rates. The builder of The Heights is participating in the same program.
The program was designed to encourage builders to construct rental units in distressed cities, and to woo middle-income persons into such areas. The $400 million available for the program this fiscal year ran out in May.
Without such below-market-rate financing, the corporation, the nation's 10th largest builder, couldn't have built The Latrobe, said William D. Comings Jr., executive vice president of multifamily development.
The Latrobe has 176 apartments ranging in size from efficiencies to two-bedrooms and in price from $352 up to $687 a month.
With market-rate financing -- if it could have been obtained -- rents would have been "significantly higher," perhaps $100 or $200 more a month, Comings said.
Joseph Horning, whose company is building The Heights, said his land costs were low because he is building in Northeast. He also is including a small shopping and office center to provide income to make his project work.
"Today's economics on apartments are very scary," Horning said. "Costs have exceeded people's ability to pay."
Landlords say the rental housing picture would be much worse if Washington were not such a transient area. Many people move each month, leaving apartments behind for those on waiting lists.
Byron L. Christenson, property manager of 13 buildings in Northwest and the D.C. Vice president of the area's apartment building association, says most of his building have had waiting lists for years. His rent-controlled efficiency apartments on upper Connecticut Avenue run about $225 a month, he said.
"It's tight (for tenants) all over D.C.," Christenson said. "It doesn't mean you can't find a place to rent. It means you now have to wait a while to get it, maybe two or three months."