TUESDAY, DECEMBER 21, 2010


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Economy & Business A15 Area rents soar, vacancies plummet after housing sector crash rent from A1


ket is thrivingmostly because the areaaddedjobsmorequicklythan the rest of the nation during the recession, luring newcomers who were unable or unwilling to pur- chase a home here. Thenumberofpeople inhouse-


holds that rent shot up 8 percent nationally but 12 percent locally between 2007 and 2009, Census Bureau figures show. As demand surged, rents climbed 3 percent nationwide and 5 percent in this region.Thearea’smedianrent last year — $1,190 — was the third- highest among the country’s larg- est metropolitan areas, trailing SanJose and SanFrancisco.


Rentalmarket is ‘golden’ “The rental market is going to


be golden for a few years,” said Stephen Fuller, director ofGeorge MasonUniversity’s Center for Re- gional Analysis. “It’s going to be the first winner. Then some of renters will become homeowners intwo to three years.” Nash and Eric Holt, both anes-


thesiologists, hope to be among them.Beforetheygotmarried, she owned a house near Boston, where she completed her residen- cy, and he owned a condominium in Florida, where he was to be stationedwith theAir Force. After he got a job in Washing-


ton, they looked at upscale apart- ment buildings in downtown Bethesda but could not stomach paying $3,700 a month for the cramped spaces theywere seeing. They turned to single-family homes so they could have more room and avoid paying to store their belongings. “One day, we looked at four


rentals and there were other peo- ple looking around in every home we walked into,” Nash Holt said. “Many cars were pulling in as we were pulling out, and sometimes therewere biddingwars.” The couple finally signeda one-


year lease for a spacious Bethesda housewithayardlargeenoughfor their dog.NashHolt said she real- izes that the $4,500 they now pay in rent could easily cover a mort- gage. But the couple,who hope to have children one day, wanted to learn more about area neighbor- hoods, traffic patterns and school districts before committing to a home purchase. “I don’t want to buy ina rush,” she said. Brian Vent doesn’t want to buy


at all, at leastnot inthenear term. Vent, 29,moved to the Virginia


suburbs from Texas in June 2009 tolookforworkaftercompletinga two-year Navy flight program. He’s rented two apartments since then and now shares a house in


Vienna with roommates. Al- though he makes a comfortable salary and could probably qualify for a decent mortgage, Vent said he favors renting because it gives him the flexibility to bolt should the economy sour. He prefers month-to-month leases. “If some- thing were to happen with the economy ormy job, I couldmove again at the snap of a finger,” he said. “I see renting as a financially responsible thing to do.” Many Americans expressed


similar sentiments in a Fannie Mae survey released last week. More than half of the renters polledcited“financialbenefits” as themain reason they rent. About 59 percent of renters said they would rent again the next time theymove, up from54 percent in January. And about 33 percent of respondents, including home- owners, said they are more likely to rent their next home than buy it.


Many renters might not have


the luxury of choosing. Fannie estimates that 64 percent of rent- ers who do not plan to own and half of those who do probably do not have enough income to quali- fy for themortgage on amedian- priced home, said Steve Deggen- dorf, Fannie Mae’s director of strategy. Others might lack the stellar


credit or hefty down payments that many lenders now demand, said Brian Ridgway, president of ExecutiveHousing Consultants, a Bethesda firm that specializes in high-end rentals. And some keep renting because they can’t offload the properties they owned before moving to the Washington area, he said. “We saw a lot of that starting two years ago, especially as people were coming in to fill [Obama] administration jobs,” Ridgway said.


Sticker shock Some who came to the area


simply suffered sticker shock. When Ari Zimmerman was a stu- dent at Indiana University, his share of the rent for a “stunning” four-bedroom apartment was $600. After graduation, he fol- lowed a Capitol Hill job to the District’s U Street neighborhood, where his share of the rent in a three-bedroomis$1,500. “It was a wake-up call for me,”


he said. With so many people commit-


ted to renting, landlords are rais- ing rents and cutting back oncon- cessions, industry experts and real estate agents said. Joan Caton Cromwell, a real


estate agent in Chevy Chase, said she recently witnessed a bidding war over a D.C. condominium. It


FCC is set to enact strict newrules forWeb access


fcc from A1


es, suchasVonage. The FCC’s move comes amid a


broad shift in consumer habits, as people gradually replace tradi- tional phone and cable television serviceswith comparable services offered via the Internet. Public interestgroupshaveurgedregula- tors to stay abreast of this change, arguing thatmajor phone and ca- blecompaniescouldusetheircon- trol of broadband networks to sti- fle those upstart rivals and limit consumers’ options. “While not as strong as they


could be, [the rules]will nonethe- less protect consumers as they explore, learn and innovate on- line,” Commissioner Mignon Cly- burn, a Democrat, said in a state- ment announcing that she will vote infavor of the regulations. However, the FCC’s authority


over broadband networks re- mains uncertain. A federal court ruling in May cast doubt on whether Internet access fell with- in the agency’s jurisdiction. The net-neutrality rules subject to Tuesday’svotearewidelyexpected to face a court test, and they could be challenged on Capitol Hill by the Republicans who will assume control of theHouse inJanuary. Theproposal falls short ofwhat


some consumer advocates had sought.Althoughitwouldprevent wireless carriers from blocking competing voice services on smartphones, itwouldallowthem to charge more for other types of Internet applications, such as vid- eo or socialnetworking services. The proposal would prohibit


Internet providers fromarbitrari- ly blocking or slowing delivery of online services, but they could strike business deals in which a companymight pay extra for fast- er access to consumers. The proposal marks a compro-


mise after more than a year of wrangling by the FCC, phone and cable giants, and brand-name In- ternet firms such as Google and Facebook.Somecarriersandhigh- techfirms say the proposal strikes a good balance between protect-


ing consumers andpreserving the ability to compete. But some Internet companies


and Republican lawmakers say the FCC’s new regulations will re- strict network operators, making it harder for Internet service pro- viders to invest in faster networks that reachmorehomes. Rebecca Arbogast, an invest-


ment analyst for Stifel Nicolaus, said that the rules are written so they can be broadly interpreted and that questions remain about the real impact on Internet video. It’s unclear whether a company such as Comcast could in effect give its video-on-demand service priority over competitors such as Netflix, YouTube and Amazon by charging them more to transmit highvolumes of data, she said. “I think there is a lot of hard


work ahead thatwill be over these kinds of issues,” she said. The FCC is deliberating a proposedmerger of Comcast and NBC Universal that will deal with some of the samematters. Wireless networks aren’t cov-


ered as broadly by the rules, and that worries public interest groups as more people turn to smartphones and tablets towatch TV shows, do research for home- work and findnews. “The inadequateprotections for


wireless technologies are especial- lytroublesome,aswirelessservices provide an onramp to the Internet for many of the nation’s poor and minoritycitizens,” saidAndrewJay Schwartzman, policy director for theMediaAccessProject. But some FCC members said


the regulations, which won’t be fully public for at least a few days after the vote, are an important first step for the government. “If vigilantly and vigorously im-


plemented by the Commission — and if upheld by the courts — it couldrepresent animportantmile- stone in the ongoing struggle to safeguard the awesome opportuni- ty-creatingpowerof theopenInter- net,” Democratic Commissioner Michael J. Copps said in a state- ment.


kangc@washpost.com


took severalmonths to rent it out three years ago, she said. This spring, it flewoff themarket. “I immediately had three appli-


cations, and I could have taken more,” Cromwell said. “We got a couple to sign a two-year lease because they wanted it so badly, and they’re paying $200 more a monththanthelast tenant.That is $2,500 without parking, which was included inthe rent before.” The rental market for apart-


ments is equally hot. In theWash- ington area, there were about 12,500more apartments occupied through the end of this year than there were a the same time last year, said Grant Montgomery, a vice president atDeltaAssociates. About 16percentof theapartment projects surveyed by the group in thethirdquarterhadwaitinglists, and many more had only one or two units available. Developers cut back on apart-


ment projects as the economy soured in 2009, limiting the new units available this year. That drove down vacancies and boost- edrents.Rents shouldkeepclimb- ing for the next two years, since new openings will not appear as quickly as they have in the past, Montgomery said. elboghdadyd@washpost.com


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