'Soft' market increases options for those who are seeking units


April 04, 1991|By Carleton Jones

The bad news first: Almost nobody is building new apartments these days -- with a few startling exceptions.

And the good news: A "soft" market, say spokesmen for the industry, is tending to favor people seeking new rental settings.

You can track the bad news with a glance at the Dodge reports, the authoritative summary of construction issued monthly. It shows local homebuilding, apartments included, down a thumping 35 percent compared with last year for the metro area, as of March 1.

The good news stems from the fact that while there are far fewer apartments started during recession periods, there are also fewer singles and families in motion. Less demand for units shows up during employment and economic slumps. And more options and extras show up in rental units to lure tenants.

The recent easing of interest rates for home buyers also tends to accelerate rental vacancies and increase rental options, some market observers say.

Overall, the apartment market is "soft."

"Frankly, there's just not a lot of building going on," says John P. Martonick, immediate past president of the apartment builder-owner division of the Home Builders Association of Maryland.

It's a situation that exists nationwide. "Here and there specific apartments may be renting better than normal" but the general trend is not flourishing, he notes.

That works out to concessions to renter candidates. Renters are getting "deals," says Mr. Martonick. "Flexibility," on rents and amenities marks the tone of the market, "all of it a reflection of a rental market that has been soft for so long."

A wide spectrum of approaches marks the newly competitive look in the rental field, in some cases recalling the market of the 1930s (just before apartments became scarce in the building-poor 1940s).

Senior citizens today are offered special discounts in some communities. One community offers "$200 off the first month's rent and $100 off the security deposit." Concessions on security deposits, which in some cases once called for as much as two months rent, have been one of the main lures to new tenants.

Other developments advertise three-figure discounts for lease signings. One west side community will give a discount to anyone who has an income of less than $32,400. A number of others include free heat and hot water as part of the rental plan. In deluxe club-oriented developments, some concessions have surfaced on items like fees for use of frills. Apartment owners also appear to be easing up on pet exclusions and small pet fees.

Possibly the bluntest lure so far is "one month's free rent," unheard-of during high-occupancy years of the '70s and early '80s.

Condo conversions of older, quality apartments continue apace in the city area. These large-scale, traditional buildings often lack air-conditioning, but are being converted to ownership on a wide scale in city and county settings. They can be considered another symptom of the softness of the rental market. If still BTC viable for the affluent, they would remain as leasing operations.

Though not on the scale of the condo conversions of recent years, units are also actually being created for rent by buildings originally scheduled as condominium units.

Among these new rental settings are Henderson's Wharf, the historic, $11 million dock building at Fells Point (renting for an average of $1,000 a month) and the quite different Owings Mills project, Worthington Place, a contemporary-style, mid-rise apartment in the northwest corridor.

In startling contrast to the slack multifamily building picture is the new apartment center, Waterloo Place, being developed on a two-acre block between St. Paul and N. Calvert streets in the midtown area. This self-contained community with underground parking is a "first" in concept for the metro area, built from scratch with 20 floor plans offered, from the middle ($620) to the lower end of upper ($1,615-top) monthly range of rental housing.

Waterloo Place is regarded as a key test of the soundness of downtown urban rental living. According to the builders, it will be finished in September, with some of the 198 units ready for occupancy within a month.

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