If you've tried an apartment in this area, or even if you've just talked about it, you know the story: Getting the right apartment for the right rent is a bit like waiting for the return of major league baseball. In other words, with a little luck, then maybe.
The fact of the matter is that the rental market here, like in most healthy cities, is a tight one: The vacancy rate in this area is estimated at less than 4 percent. Nationally, 5 percent of the rental units are vacant, a level the Department of Housing and Urban Development considers "dangerously low."
On the other hand, the turnover rate in this government town is high, most observers agree, with estimates ranging anywhere from 25 to 40 percent.
Construction of multi-family rental housing here and elsewhere is on the decline, as the costs of building and maintenance excalate and rents fail to keep up with expenses.Further, conversion of apartments to condominiums and cooperatives is occuring at a dizzying pace.
Builders here in the 1960s were constructing an average of about 20,000 apartments a year. In the coming decade, 6,000 to 8,000 apartments -- 20 to 25 percent of the housing construction -- probably will be built in this area annually, predicts Michael Sumichrast, chief economist for the National Association of Home Builders.
This will be a continuation of a trend of the 1970s, when apartment construction accounted for about one quarter of the housing being built. Apartments represented as much as 60 percent during the 1940s and averaged 50 percent in the 1950s and 1960s.
As much as half of the units built in the coming decade may have some government financing, Sumichrast said, meaning that private rental construction will be limited largely to luxury apartments.
"Private rental housing in the U.S. has no future," Sumichrast said, "We need them, but they are very hard to build."
Nationally, "rents are going to take off very sharply," the economist said, as the gap between what households pay for rent and for mortgages narrows. The closing of the gap is going to be a "significant fact of the 1980s," Sumichrast said.
Local governments, alarmed over the decrease in available rental units, have become deeply involved in rental issues in recent years. The D.C. City Council, for instance, has extended its moratorium on condominium conversions until March and is considering legislation to make the moratorium permanent. In the past decade, 12 percent of the city's apartments have either been converted or are in the process of being converted to condominium ownership.
The city's rent control law is under fire as well as tenant groups demand that it be toughened and landlords seek to kill it. Rent control in the District will expire next fall if neither action is taken.
What do we really know about the rental situation in this area and is the picture really that grim? To begin with, official housing data is not up to date: The 1977 U.S. Census Bureau figures for the area have yet to be released.
"The conventional wisdom is contrary to fact," says Irving Kriegsfeld, president of Management Partnership Inc.
Kriegsfeld, whose company manages about 5,000 units here, says that credit-worthy people in Washington have a problem finding apartments in part because they tend to be choosy about where they live. The many apartment-seekers with credit problems face even greater difficulty finding units, he said.
"There are certian parts of town that people just don't want to live in," Kriegsfeld said. "Many people can't use the particular apartments available because of size or location.
"Others want to live along Connecticut Avenue or Wisconsin Avenue and only want to pay $200 a month to do so. There might be 200 apartments ready in Southeast, but that doesn't do them a bit of good."
Kriegsfled says that building owners are making diminishing returns and that the city has lost more than 26,000 rental units since 1971 as a result.
"This is the ignored crisis in this country," said John O'Neill, executive vice president of the Apartment and Office Building Association of Metropolitan Washington "In the last 10 years there has been a significant decline in the availability of most rental options in the country.
"In the past 10 years, the great provider of housing in American has been the U.S. government," he said. "I have to assume that Congress will keep appropriating more billions, otherwise people will be living in tents. But, I'm not sure the government can fill this void."
Recent figures from the Department of Housing and Development show that while private apartment construction is slackening off, federally assisted housing is booming. During fiscal 1979, 175,119 rent subsidy apartments and public housing units were started nationwide, nearly 6,000 more than in 1978 and 57,000 more than 1977.
Currently, about 65 to 80 percent of all rental housing being built in this area has some federal backing, either in low-interest loans or rent subsidies, according to Art Goldstein, D.C. area economist for the Department of Housing and Urban Development.
For example, every current apartment construction project in Montgomery County except one -- Old Georgetown Village near White Flint -- has either a 20 percent subsidy or is completely subsidized by the federal government, HUD said.
In 1978 permits for federally insured or subsidized units accounted for 88 percent of all rental permits in the metropolitan area.
In 1978 there were fewer multi-family housing starts across the country than at any time in the past 20 years, except for 1975. Local multi-family permit activity last year was the third lowest since 1960, dropping 20 percent from 1977.
HUD reports that permits to build 1,408 rental units were issued in this area in the first nine months of 1979, a sharp decline from the 3,642 permits recorded during the same period last year.
The District's Rental Accommodations Commission said that in 1974 there were 188,500 rental units in the city. By 1978, that figure had dropped to 175,900. In addition, there were about 29,000 rented single-family homes in the city in 1974. Now, about 12,000 of those are owner-occupied, the commission said.
"There is a lot of rental housing out there," said one housing expert."But the market is getting tighter all the time and I really don't think we know the figures on conversions and abandonments."
However we do know that during the boom years of the early 1960s, permits to built about 150,000 apartments were issued here. For the 1970s, a decade in which moratoria on hookups to overloaded sewer systems began to be imposed, the figure declined dramatically, to about 6,000.
And, between 1974 and 1978, only about 2,000 such permits were recorded and of those, more than 2,200 were for federally-assisted units.
Nationally, however, the picture for rental housing appears equally discouraging. Generally, construction has declined; costs for landlords, especially utility costs, are skyrocketing and rents are gobbling up more of family budgets than ever before. There is little encouraging news on the horizon.
Renters are slowly becoming an endangered species. Of the nation's families, only about 35 percent rent, the General Accounting Office reported recently, and by the year 2000 the figure will drop to 26 percent.
Although estimates indicate that the local vacancy rate is about 3.7 percent, nationwide it was tabulated to be about 4.8 percent last March, the lowest since the government began keeping that statistic. The larger the unit the lower the vacancy rate, the government has found.
Between 1973 and 1979, median rents increased by 9.6 percent annually, while renter income rose by 5.6 percent each year.
Renters also earn less than homeowners, the GAO said, pointing out that aobut 30 percent of all homeowners earned less than $10,000, while about 56 percent of renters had incomes below that figure.
The basic rule of thumb about paying only a week's salary for housing costs is going out the window for many renters. In 1977, about 49 percent of the nation's renters paid 25 percent or more for housing costs. Further, between 1973 and 1977, the number of people paying 35 percent or more for their rent increased from 5.5 million to 7.4 million.
Additionally, the nation's rental housing is also aging. In 1977, about 41 percent of occupied rental units were in structures built in 1934 or earlier.
In the District, landlords maintain that rent control has contributed substantially to the decline in the number of apartment units by making rental properties less attractive to investors.
"Unless investment in rental housing becomes more attractive, you're going to see a further reduction," warned James Banks, executive vice president of the D.C. Board of Realtors.
Banks said that the city government, and specifically the City Council, can do more to bring more new investors into the rental market.
"There are two groups to attract: developers and lending institutions, which both take risks," he said. "Now lenders are not willing to take the risk . . . . The general attitude (on the part of the City Council) toward the real estate industry has a lot to do with the shortage of rental housing."
Three conditions are necessary to solve the problem, Banks said. First, the cost of operating rental units must be brought under control both through increased cooperation between tenants and landlords and more government research. Second, the cost of borrowing money must be reduced, he said, perhaps through the establishment of a local government finance agency.
Third, he said, investors and lenders must have some kind of assurance that "rent control would not ultimately be imposed."
Banks said that since 1975, only two housing developments have been built in the city without support from the local government.
The problem exists in the surburbs as well.
James Harvey, executive director of the non-profit Metropolitan Washington Planning and Housing Association, says that the rental markets in Montgomery and Prince George's counties are tightening as more and more people are looking outside the city for affordable housing.
"The increase in the cost of rental housing has the effect of taking a layer of people out of the market," Harvey said. "When you have a tight market, the chances of discrimination, of creaming off the top, increases. It increases the chances for racial discrimination. Also, you have a chance to discriminate against families with children, which is an increasing problem."
The rental market in Northern Virginia is probably not as tight as in Maryland or the District because condominium conversions are not happening quite as fast, he said.
In addition to implementing some kind of control over condominium conversions, Harvey sees a need for preserving existing apartments through assistance to landlords for rehabilitation and operation.
But the foremost problem, Harvey said, is attracting the kind of investors to the rental market "who are interesting in providing housing and not making a killing."