The National Multi Housing Council is out with a new research report concerning apartment dwellers and condo buyers, and is urging apartment managers to work harder to overcome the concept that owning is always better than renting.

In its report titled "Competition from Condos," the NMHC suggests many apartment managers do not know the strengths of their industry.

"When choosing between an apartment and a condo, consumers often mistakenly weigh the costs of owning and renting by comparing monthly mortgage payments with monthly rent," the report says.

"Apartment managers should remind current and prospective residents that the total costs of condo ownership are much higher and include monthly condo association fees, special assessments, and the investment return foregone on the money tied up in the down payment.

"Importantly," it continues, "approximately half of all condo buyers move within five years, and real estate commissions can add dramatically to the all-in cost of condo ownership."

The NMHC is the nation's largest organization representing the apartment the industry and includes in its membership the country's 900 largest apartment building-owning corporations. Among its goals is to offset negative opinions about renting.

By proportion, approximately 31 percent of the U.S. population lives in some kind of rented dwelling or roughly 34 percent of American households.

By number, there are about 82 million renter households in the country, about 31 million who live in buildings with five or more units. Of the other 51 million renters, most live in either single-family homes, duplexes, triplexes or quadraplexes.

The NMHC report said the organization was aware of reports that in some local markets condo construction and conversation from apartment buildings to condo buildings is increasing.

But, "if this is occurring, it is not yet showing up in the national data, which continue to show the condo share of multifamily starts near its 20-year low.

"Nonetheless, condo vacancy rates have moved down in recent quarters, signaling some firming. The low home mortgage interest rates of the past two years have undoubtedly boosted condo demand, but the run up in rates since Spring is now testing the strength of that demand."

The report suggests apartments continue to appeal to their traditional core occupants - such as younger people - but notes that some of those demographics may be changing.

Compared to apartment renters, condo owner-occupants on average are older and more often female, with higher incomes and fewer children. The report also points out that about 34 percent of all condo units are actually occupied by persons who rented them from investor-owners.

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Published: October 19, 1999

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