With employment gains still below average and the slowest since the post-World War II job market recovery, occupancy and rental rates are climbing, but are still below normal levels, suggests the annual report by the National Multi Housing Council for 2004.

But with the U.S. population set to increase 33 percent by 2030, the report suggests that communities face a "looming housing crunch," which has been accommodated in the past by "sprawl." The result has been the creation of "bedroom towns with no sense of community, where residents endure long commutes, and cities struggle to cover the costs of servicing their far-flung citizens," suggests the report.

With recent gas price hikes, it's a good time to discuss the issue that America return to traditional neighborhoods built around walking, not driving. The report maintains that there is a need, and a desire, for high density housing which can include apartments, townhomes and condominiums for purchase or rental.

Need

According to the report, community leaders are discovering the high costs of sprawl and the benefits of creating higher-density, mixed-use development:

1. High density "reduces the need to extend water, sewer, electrical, highway, police and fire protection farther and farther away, which can cost the cities thousands more."

2. "Compact development can also jumpstart local economies." Among the issues for employers tempted to locate further from city cores are housing, strict regulations, and high taxes. Cities lose the employee consumer spending and business income when companies locate out of town.

3. High density "supports neighborhood retail districts, which generate additional tax revenue" and support "lively work/live/walk districts and public transit nodes."

4. Poorly designed development is better blamed for crime, traffic, and falling property values than dense development.

5. Towns which avoid adding apartment, rental, or condominium housing are missing an opportunity to create great communities "that are more fiscally and environmentally sustainable."

Desire

Today, less than 25 percent of American households are composed of married couples with children. In addition to the nuclear family (two parents, two children), which is the ideal most single-family housing is designed for, there are also "young professionals, couples without children, empty nesters and single parents" as well as other nontraditional households. These groups may choose housing for a different set of amenities than those designed for children.

The diversity of the nation is creating a desire for more diversity in housing, which is leading to more demand for multi-family housing which includes apartments, townhomes, and condominiums to own or rent.

Higher density housing affords more convenience, financial flexibility and amenities. Residents choose to be close to jobs, retail and entertainment. 40 percent of apartment residents, says the report, choose renting because it suits their lifestyle.

Communities can save over $100 billion in infrastructure costs over the next 25 years by growing compactly, suggests the report.

Demand for high-density housing will continue to grow and hit new highs by 2015 due to the influx of:

• 78 million downsizing Baby Boomers

• 78 million children of Baby Boomers graduating from college and entering the workforce

• 9 million new immigrants

• Millions of service and municipal employees priced out of the neighborhoods where they work

It's time communities, including developers, city planners, and real estate professionals, overcome their fear of high density housing, and embrace it for the benefits it can bring.

Admonishes the report, "Communities that want to attract the best -- young professionals, knowledge workers, the creative class, vital municipal employees -- need to offer them the vibrant, walkable neighborhoods they desire. To do that, they must embrace higher density housing."

Published: April 7, 2005

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