While much is made of housing starts and new construction, upgrading existing structures, especially apartments, is the often the only way to improve the quality of housing in existing neighborhoods.

In 1998, the last year for which information is available, expenditures for capital improvements on multi-family structures totaled $10.3 billion, according to data assembled by the National Multi-Housing Council. That's about 42 percent of the $24.5 billion spent that year to build new apartment and condominiums.

And with the average age of the nation's apartment stock at 34 years and climbing, the pace of upgrades made by owners and landlords is expected to increase over the next decade, says NMHC President Jonathan Kempner.

"This new research suggests that renovating and improving the nation's 17 million existing rental apartments will likely be one of the multi-family industry's major business opportunities in the coming years," says Kempner.

Judging from most recent experiences, about one of every three apartments is upgraded every year, and seven of ten are improved over a 10-year period. Also, properties more than two decades old are much more likely to be improved.

Based on these figures, NMHC believes some 5 million apartments are likely to receive some work over the next decade. But these are projections, the trade group points out, not predictions because they assume that the same amount of activity will take place.

And "that may or may not turn out to be the case," it says in a new report. "If consumer demand for apartment living increases, the projections will prove to be too low."

Nevertheless, the estimates should be close enough for reasonable baseline planning, Kempner says.

Full make overs are relatively rare, the report says; most improvements are less dramatic but more frequent.

On average, owners spend $1,262 per unit on improvements. But not surprisingly, they spend more on older units than on newer ones -- $1,329 per apartment in properties built prior to 1980 vs. $776 for units build in 1980 or after. About a quarter of the improvement jobs cost less than $125, but a similar 25 percent cost more than $2,500.

When they undertake improvements, landlords tend to make more than one at a time. On average, they take on two. But the two most frequent -- kitchen make overs and bathroom renovations -- are also two of the most expensive. The next most common improvements are heating upgrades, adding or updating air conditioning, and plumbing replacements.

Published: July 31, 2000

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.