Apartment construction is expected to increase slightly here this year, exceeding the estimated 7,350 rental units created in 1977.
The number has increased each year since 1975, when only 2,324 rental apartments were started in this area. That figure is a shallow contrast to the record 40,638 multi-family units started hereabouts in 1965.
That year is usually remembered because of the many thousands of rental dwellings built in Prince George's County. Now Prince George's is encouraging single-family construction - to the exclusion of apartments.
Although rent controls - actual or feared - have been blamed for the downturn in apartment construction in this area, there are other reasons. In the Private market, construction and financing cost have become so expensive that most of the large developers contend that it is almost impossible to "make the numbers work out" unless there is a government interest or rental subsidy involved.
But another significant factor cannot be ignored. In recent years the trend to home ownership, including the construction and conversion of thousands of high-rise and garden apartments to condominium ownership, has tilted the balance between owners and tenants in residential housing.
It is estimated that 60 per cent of the area's 1 million units are owner-occupied. That leaves about 400,000 units in the rental category, which has been decimated by condominium conversions as well as razings and abandonments of deteriorating buildings.
The swing to home ownership in the 1970s has decreased both the rental housing stock and the number of people who rent. In the last few months, apartments have taken longer than normal to be leased. Some buildings that usually have full occupancy have had vacancies.
And as usual, there is a shortage of low-income rental housing. Generally, this area maintains a strong occupancy factor, with vacancies under 4 per cent.
Among the local firms heavily involved in apartment construction is Construction General Inc., of Silver Spring. It is now leasing units at the $9.3 million, Consulate high-rise at 2950 Van Ness St. NW, where monthly rents range from $365 to $575.
Construction General. President Jack Y. Matthews says the apartments are renting quickly. FHA 221 (d)(4) insured loan financing was used on the building, which was designed by local architect Arthur Cotton Moore.
The firm also has plans for a spring start on a luxury "air rights" apartment over a parking garage at 1120 29th St. NW. The project, called Georgetown Mews, will be developed with the JBG Group.
In conjunction with Mt. Carmel Baptist Church, Construction General plans another "air rights" mid-rise rental complex on a platform built over a portion of 1-95 in the midtown block bounded by 2nd, 3d, I and K streets NW. This project, aided with federal rental subsidies, will include both apartments and town houses.
Construction General also is completing the 238-unit, 16-story Centennial House just west of Montgomery Mall for occupancy this summer. Bucher-Meyers is the architect.
Like other area builders, Matthews feels that either federally backed, below-market mortgage interest funds, housing for the elderly, or Section 8 rental subsidy housing programs are generally necessary for a construction project to make economic sense these days.
While 7.5 per cent, Brooke-Cranston mortgage support funds, made available in 1976 and 1977, accounted for many starts last year, that program has gone dry in recent months. Authority exists for more appropriations when HUD earmarks it and some builders are optimistic that such money will be quickly released this year.
Another Silver Spring firm of long standing, the Harkins Group, completed 1,418 apartment units in nine projects last year and plans starts of about 1,500 units in 1978.Thomas P. Harkins, head of the firm, said that 263 rental units will be built in the inner city. The Harkins firm is completing two housing projects for the elderly for the Montgomery County Housing Opportunities Commission and another church-sponsored high-rise for elder people in Reston.
Harkins says the apartment market here is competitive and healthy - but not for conventionally financed construction.
"Most of the apartment starts either have federal or state aid in financing or federal insurance," he noted.
The Artery Organizations, Inc., based in Chevy Chase and headed by Henry Goldberg, plans to complete 1,247 new rental units this year. Several, including Peppertree II in the Bel Pre area of Montgomery County and a 242-unit complex in the Keene Mill and Rolling roads area of west Springfield, are now being leased.
Goldberg said that the Peppertree apartments have fairly high rents, ranging from about $320 to more than $400.
"Without tax shelters and subsidies, rents would be even higher," he said. Many of the new apartments are being occupied by two wage earners, Goldberg noted.
Joseph Horning, whose firm, Horning Brothers, builds almost exclusively in the District, said that his current projects include 167 Section 236 rental units at 15th and H streets NE and the 46-unit Stoneridge II in Anacostia. He also plans to Section 8 rental houses along the H Street NE corridor.
The National Housing Partnership has been co-sponsoring rental housing in Alexandria and has about 470 more units planned in the District. One project will be Campbell Heights, a 171-unit high-rise at 15th and U streets NW, where the Dunbar Hotel once stood.
While the average rent for a one-bedroom apartment now is about $268 in this area, new high-rise rental buildings require rents above average. That's the case with the Consulate at 2950 Van Ness. It also applies to the high-rise building and ajoining town houses that Gerard LaVay and Richard Donohoe are planning for an eight-acre section of the Glover tract, south of American University.
LaVay expressed confidence that his long quest for zoning approval would be successful this year. Rents will probably range from 60 to 70 cents a square foot per month, he said, or more than $500 monthly for a large, one-bedroom apartment.
As 1978 begins, the private apartment market is feeling the influence of recent increases in all mortgage interest rates.
Comments mortgage specialist John Reilly: "There are many new apartment starts and new units in immediate view, but the new upsurge in mortgage rates has to cast a dubious shadow over projects being planned for the future."
Meanwhile, the Baltimore district of the Army Corps of Engineers and Titan Atlantic Construction Corp. of Towson, Md., are currently completing 211 new rental apartment and town house units at the Glen Haven housing site of Walter Reed Army Medical Center. CAPTION: Picture 1, Construction General, Inc. is building these apartments in 1300 block of Columbia Road NW with All Souls Unitarian Church and CHANGE, Inc. The project, including a 10-story apartment building and town houses, is being built under the federal 236 program for low-to moderate-income-tenants.; Picture 2, Monthly rents range from $365 to $575 at the new Consulate apartment building at 2950 Van Ness St. NW., Photos by Charles Del Vecchio - The Washington Post