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More urban housing at center of region's development future

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Local,DC,Maryland,Virginia,Real Estate,Liz Farmer
Much of the Washington area's future development will center on accommodating the growing demand from young professionals and families for urban living as trends have shown an increasing need for communities where people live, work and play.

D.C. Mayor Vincent Gray, the keynote speaker at the Urban Land Institute's annual Washington real estate conference, said that means making mixed-use developments centered on transit stops a top priority.

While he noted key projects include the redevelopment of St. Elizabeths Hospital and the MacMillan Reservoir in Northwest, D.C.'s downtown is full of unrealized potential.

"Go stand on 14th Street and look west. What do you see?" he said. "Not very many people because it's largely office buildings where ... it's deserted at the end of the day."

The downtown population surged over the last decade, according to the latest U.S. census counts, he noted.

"We now have 86,000 people living in Ward 2 -- which is principally downtown -- which underscores the fact that that's where people want to live," Gray said.

According to experts, the demand for more housing in the city and other urban areas in the region, such as Rosslyn or Bethesda, will come from young professionals.

Nationally, about 4.4 million 22-year-olds likely will be looking for new housing in the next few months, according to Leanne Lachman, president of research firm Lachman Associates. That number will rise to 4.5 million by 2012 and remain high in next 10 years, she said.

And, according to her research, nearly two-thirds of twentysomethings say that proximity to work is one of their top considerations in looking for a place to live.

The District has seen more than its share of rising demand, noted Grant Montgomery, founder of Delta Associates, who said that D.C.'s rental population increased by more than the national average in 2010. In conjunction with the rise has come a dwindling of new residential buildings in the District as the recession has slowed construction and financing.

The Washington area has one of the lowest apartment vacancy rates in the nation at 3.4 percent as renters now account for more than one-third of households.

"So you're also starting to see a boost in rents," Montgomery said, noting rents increased by nearly 7 percent regionally last year. "And in seven of 10 [suburban] submarkets, rents are up by double digits."

lfarmer@washingtonexaminer.com

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