Analysts Urge Real Estate Investors to Shift with Times

Article excerpt

By Corrie M. Anders

San Francisco Examiner

LAS VEGAS, Nev. _ It's not too early for landlords and apartment developers to start thinking about how their rental landscape will look at the turn of the century.

Just six years from now, tenant profiles will have changed dramatically, influencing where renters live and the type of rentals they desire _ not to mention its effect on the bottom line for those who fail to understand and act on the emerging trends.

According to pundits, here's what's on the horizon: The working class poor _ African Americans in particular _ increasingly will receive fatter paychecks that will enable them to move out of government-subsidized rentals and into private housing. One third of the growth in U.S. households will come from immigrants from Latin America and Pacific Rim countries, increasing the multiculturalization of America. Senior citizens represent one of the fastest growing segments of the U.S. population. One of their must-haves is housing that offers them a sense of security from violence.

These dramatic changes won't occur overnight. "It's going to be a slow process rather than a big jolt," said Todd Zimmerman of Zimmerman Associates, a Clinton, N.J., housing research and planning firm.

Zimmerman and other housing specialists offered insights into the future of multifamily housing at a discussion during last month's convention of the National Association of Home Builders.

This may be an opportune time for strategic planning. That's because this year signals a crossroad for multifamily housing, an industry term that embraces both rental apartments and condominiums.

Multifamily construction has been on the skids since the 1986 tax reform act wiped out most investment incentives. Last year was the worst on record for multifamily construction, with only 162,000 units going up across the country.

Multifamily housing construction has been down so long there's no place for it to go but up. Michael Carliner, the Home Builders' chief economist, forecasts a 25 percent jump in construction as early as this year and another 25 percent in 1995.

Carliner told convention delegates that the 1994 increase will be pushed by significant tax breaks for developers who build rentals for poor people using low-income housing tax credits, a temporary program made permanent by Congress last year. Condo construction will fuel the 1995 increase, he said.

The changing demographics of minorities will play a major role in tomorrow's renter profile, said Zimmerman, who cut his teeth on housing affairs as an urban policy specialist in the administration of former New York Mayor John Lindsay.

He predicts that low-income families _ single moms in particular _ increasingly will be able to escape the worst of subsidized housing in the inner city for either moderately-priced private housing or subsidized housing in better locations and with better schools. …