- The Washington Times - Monday, July 31, 2000

Landlords are spending $5 billion annually to upgrade apartment buildings in the United States, the result of aging buildings and a tightening market, according to a new study.

D.C. landlords are spending $46.4 million in annual improvements about $72 million below the national average even though the city has some of the oldest apartment buildings in the nation, the report said.

The study by the National Multi Housing Council (NMHC), a D.C.-based association of apartment building owners and managers, predicted an average 5 million apartments will be upgraded in the United States every year between 2000 and 2010.

NMHC said an aging apartment stock and a tightening market the national apartment vacancy rate sank to 8.9 percent in 1999 from 10.1 percent in 1989 are forcing landlords to fix their buildings up.

"This shows that it's much more common and cost-effective to upgrade buildings than it is to tear them down and start all over," said Mark Obrinsky, chief economist for NMHC.

Most landlords spend money to replace kitchen appliances and to upgrade heating systems and bathroom plumbing, Mr. Obrinsky said. Only 12 percent of the improvements made are to make buildings accessible to the disabled.

"The kind of upgrading is substantial. We're not talking about painting and routine maintenance here," Mr. Obrinsky said.

Landlords in the District spend $46.4 million on upgrades each year, the report said. By comparison, apartment building owners in Virginia spend an estimated $138.8 million in annual improvements, and landlords in Maryland spend about $132 million.

Nationally, landlords spend an average $118.71 million in improvements, according to the report.

Southern Management Corp., a Vienna-based company that owns and manages about 23,000 apartments in the Washington suburbs, said it spends between $7 million and $10 million annually in major improvements, such as replacing boilers and roofs.

The amount Southern spends has remained steady during the past 10 years, according to its chief executive officer, David Hillman.

"This is nothing new for us. We've been doing it all along," he said.

Jim McGrath, chairman of the D.C. Tenants' Advocacy Coalition, a group that oversees about 150 local apartment building tenants associations, said many of the improvements done in city buildings are only "cosmetic."

"They're doing things that grab the eye" of apartment-seekers, such as renovating the lobbies in the buildings and sprucing up their landscaping, Mr. McGrath said.

The study found 8.3 percent of the 108,000 apartments in the District were built after 1979, the lowest in the nation.

Of the 416,000 apartments in Virginia, 42 percent have been built since 1979. Thirty percent of the 358,000 apartments in Maryland have been built since then, the report said.

Most D.C. apartments about 26,000 were built before 1940. The District tied with Wyoming for the fewest apartments built during the 1990s about 1,000.

City officials want 7,500 new units built downtown in the next few years, according to the D.C. Office of Planning.

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