If you are considering investing in multifamily, here's the scoop on what renters want:

Pretty much what homebuyers want, according to a survey by the National Association of Home Builders, its first formal pulse-taking of the rental market in a decade.

Nearly half of America's apartment dwellers say they choose to rent because it "suits their lifestyle," according to the NAHB survey. And the three things they look for when choosing an apartment home are an attractive price, location and design.

About 22 million Americans, or one in four American households, live in apartments.

"So it is important for multifamily home builders to have a clear understanding of their preferences so they can build the kind of apartment-home that people want," said C. Kent Conine, who builds multifamily housing in the Dallas area.

In fact, apartment size is key for renters choosing an apartment.

Multifamily builders apparently have reacted to this preference over the last 20 years, because the size of a typical apartment increased from 900 square feet in 1980 to 1,100 square feet in 2000.

Still, the survey found that renters want even larger apartments. About 34 percent saying they would prefer at least 1,400 square feet, said Gopal Ahluwahlia, the NAHB's vice president for research.

Kitchen design and the number of bathrooms in the apartment were also key features that attract apartment residents, Ahluwahlia said.

Amenities in the apartment community also were important, with 65 percent of renters citing parking as vital. Garages and storage space were tied for second at 38 percent, while 20 percent cited 24-hour security as a key factor.

For the survey, NAHB used a random sample of 2,000 rental households, balanced across the regions of the United States, and representing the low, middle and high end income segments of the market.

The preliminary data were drawn from the 1,200 responses to the survey.

The great majority of apartment residents are single. Most fall into two age groups: those 25-34 years old, and those 65 years or older. Each group represents almost a quarter of the rental population.

About 28 percent of the renters surveyed earn more than $50,000 per year.

Apartment renters move frequently, on average every two years. NAHB data also show that most new apartment residents were households moving from one rental unit to another, although a substantial number were the result of new household formations. What came as no surprise was that rental apartments are an important rung on the housing ladder for most households, the survey showed.

Although the weak economy has put pressure on the apartment market during the past six months, the outlook for the multifamily industry remains good, the NAHB says. Even amid signs of weakening, such as rising vacancy rates and lower rates of absorption, real rents have remained strong. There is also ready access to capital. Investors are seeking the stability of real estate as Wall Street remains uncertain. Even pension funds are looking for ways to increase their investments in real estate.

There has been some softening. In certain markets, some of the nation's 5,000 multifamily companies have begun using rental concessions - including free rent specials -- to drive up demand.

Southern California, however, remains a hot spot for multifamily development as the state looks for ways to bridge the gap on affordable housing.

Multifamily housing production in buildings with five or more apartments declined by a little more than 2 percent to 295,000 units in 2001, with most of the drop in starts occurring in the last two quarters of the year.

However, multifamily starts rallied in January, with an 8 percent gain to 287,000 units that offset about one-third the ground they lost in the previous month.

The NAHB is forecasting the annual starts rate for buildings with five or more units to hit 300,000 by the end of 2002, a number seen as both healthy and sustainable. The fact that overbuilding has not occurred in most markets also bodes well for the industry.

Multifamily companies are very concerned about rapidly increasing operating costs, particularly for hazard and general liability insurance. Insurance costs, which were already on the rise, have skyrocketed since Sept. 11, increasing as much as 500 percent in some cases. Many multifamily owners reported seeing their premiums double, even when accompanied by substantially higher deductibles.

Insurance coverage is one issue on the 2002 agenda of the Joint Legislative Program of the National MultiHousing Council and the National Apartment Association.

Clarine Nardi, the organization's senior vice president, said federal lawmakers "now realize that apartments are the best tool to address our most pressing issues, including the affordable housing crisis, urban decay and suburban sprawl." "At the same time, they are starting to understand that the apartment industry is limited in its ability to help because it is bogged down with regulations and zoning roadblocks motivated by outdated stereotypes," she said.

Published: March 14, 2002

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Al Heavens writes about real estate and home repair and improvement. He is the author of What No One Ever Tells You About Renovating Your Home: Real-Life Advice For Hassle-free, Cost-Effective Remodeling.