HOUSING: Cashing In on Condominiums

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ABOUT the first of every month, millions of apartment dwellers echo a familiar and bitter complaint: while homeowners get large tax breaks as well as investment equity in their houses, a renter's lifetime collection of monthly receipts adds up to just so much confetti in the wind. In search of a better deal, more and more erstwhile tenants are moving to condominiums, in which occupants hold legal title to their apartments instead of mere leases. This form of housing was devised in medieval Europe, has long been popular abroad, and lately has become the fastest-rising development in the U.S. shelter market.

Especially in the Eastern U.S., where population is denser and land costs higher than in the West, the demand for condominiums seems to be insatiable. Last year 16% of the nation's housing starts were condominiums; this year the figure will be 27%. Buyers are signing up for such varied accommodations as $10,000 row houses on the fringes of Florida's Everglades, and nine-room dockside extravaganzas in Greenwich, Conn., priced as high as $220,000 each. In almost every area and price range, condominiums are either challenging or surpassing leased apartments as the dominant multifamily housing form. Some examples:

MIAMI. Condominiums dominate the entire metropolitan housing spectrum. Working-class families as well as the city's large community of Cuban expatriate businessmen and tradesmen are eager buyers of condominiums, which five years ago appealed most strongly to middle-class retirees seeking Florida's sun. Even the palm-draped skyline of stately Key Biscayne, site of President Nixon's Florida White House, is being reshaped by high-rise condominiums. Most recent addition is a group of six twelve-story high-rises on the beach.

DETROIT. Condominiums have captured the entire middle-price range of apartments. One 400-unit project in the $26,000-to-$38,000 bracket sold out in 21 months.

CHICAGO. Priced between $21,000 and $75,000, condominiums are spreading all over the urban area. Downtown, a complex of buildings with a total of 4,000 condominiums will soon tower above Lake Michigan in the city's Illinois Center. In the suburbs, four-family condominiums priced at $ 18,000 for each unit are popping up near $75,000 private homes, and both types are selling well.

WASHINGTON. Construction of suburban condominiums is spurring the city's strongest building surge since 1954. Condominiums are bidding to pre-empt the market in the $25,000-to-$35,000 price range, and are appealing increasingly to would-be private-home buyers in the $50,000 range.

Condominium sales are now going through the roof in part because owners get tax breaks. When an owner moves and sells his apartment, the profit is taxed as a capital gain—usually one-half his normal tax rate. If he reinvests the entire proceeds in another house or condominium within a year, he can avoid income taxes completely. If he wants to rent out his newly vacated condominium instead of selling it, he gets tax deductions for upkeep and depreciation. Meanwhile, interest charges on his mortgage are taxdeductible.