Strong upscale rentals Inner Harbor lures: Federal Hill, Canton benefit from demand for high-end apartments.

February 16, 1996

BALTIMORE CITY's rental apartment market is a paradox. While many neighborhoods are depopulating and have an increasing stock of vacant houses, top-end units around the Inner Harbor are in such short supply Mayor Kurt L. Schmoke wistfully talks about converting aging, hard-to-rent downtown offices into apartments.

We have grave doubts about whether such a conversion will make economic sense. Downtown is not the Inner Harbor. A key reason why many of those buildings are underutilized today is their lack of convenient parking.

The high-end rental market has a peculiar demographic characteristic. By age, renters either tend to be unmarried young people just starting a professional career -- often in the neighboring counties -- or well-heeled empty-nesters ready to trade away suburban blandness for the diversity of city entertainment. They want convenient services, ranging from good food shops and dry cleaners to restaurants and health clubs.

Another important niche of upscale rentals is corporate transfers. This segment, while much in demand, is a one-way street, however. An out-of-town executive moving to a Baltimore office typically selects an apartment in Federal Hill or Canton. After the family arrives, the executive buys a home and moves to the suburbs. A key reason is the sad state of the city's public education.

The way to further develop the upscale rental market is to offer incentives so that desirable supermarkets and other residential services move into trendy neighborhoods. This is too good an opportunity for the city to pass up. Whatever it takes, city officials should take advantage of this surging interest in high-end rental units.

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