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We all know that multifamily housing has been depressing the Salt Lake real estate market in the latter half of this decade.

Overbuilding of apartments a few years ago left the valley awash in surplus units while landlords tried every giveaway in the manual to entice renters. When that failed, many gave up and let their lenders foreclose.But nothing is ever quite what it seems. Just ask Stephen B. Terry, president of Salt Lake-based Emerson Realty and Management.

No, Terry is not here to tell us that the great apartment apocalypse of the '80s was just a figment of our imaginations. It's real all right. But Terry, author of the Megatron Media Multi-Housing Report for 1989, points out that the problem is more complex than many industry watchers realize.

For example, when the bottom dropped out of multifamily in 1986, one-bedroom rental rates fell from $375 a month to $325 in a single year. Now, they can be had for well under $300, and Terry isn't sure they have stopped their slide even yet. "They could still go down in '89," he said.

Two-bedroom units also lost ground for their owners during 1987, although not nearly as much. Now they are back up to commanding rents of about $375 per month. (Incidentally, both one- and two-bedroom units have shrunk in size in recent years, a phenomenon Terry calls "the Club Med trend" in which developers put their money into the common areas at the expense of the individual units.)

Then there are the three-bedroom units, the apartments that families rent just before they make the plunge and buy a home. Rather than plummeting in 1986, these units leveled out only for awhile and have commanded annual rent increases ever since.

Three-bedroom units are an anomaly, said Terry. They escaped the overall recession because of the most basic of market factors: supply and demand. It seems that developers don't like to build three-bedroom apartments because they attract couples with children - and children are very destructive to apartments. "So they didn't build many. There was no oversupply of three-bedrooms, and rents stayed firm. It's as though the market didn't go bad for them."

Ironically, the developers who created the apartment glut in the mid-'80s by overbuilding - virtually all of them from out-of-state - intended to lose money on the projects for the first three years. They were built simply as tax shelters.

But then the federal tax rewrite of 1986 came to town and the write-offs had to be written off. "The apartment projects all went back to the savings and loans that had financed them," said Terry. As much as anything, he believes, it was the collapse of multifamily housing that brought down many of the S&Ls.

What does all this mean to the future of multifamily housing in the Salt Lake Valley? Terry echoes the timeless rallying cry of Realtors everywhere: "The bottom line is that there probably was never a better time to buy (investment apartments) than right now."

Yes, it's a cliche, he concedes, but look at the evidence:

"The amount of product is high and (buyers) can get an awfully good price. I have a property going for $10,000 (per unit) right now that would ordinarily go for $35,000. You couldn't build them now for $10,000, I promise you that. With rents going up, it suggests that now is the time to buy."

Terry reflects on that statement for a moment and then allows that there is one factor lurking in the market on a national level that could prove him wrong: mass dumping of apartments held by troubled savings and loan institutions.

"If major companies, such as Southmark (bankrupt), which owns 100,000 apartment units, were dumped on the market all at once by FSLIC or Fannie Mae or some other quasi-government organization, the market would fill up and prices would go back down."

That would be a bitter pill for local apartment unit investors to swallow, particularly those who have held on through the hard times and avoided bankruptcy and foreclosure. Much of the glut has been absorbed and rents have stabilized and are beginning to rise. Now their fate is in the hands of Congress.

For landlords, life has never been easy.