According to those responding to the NMHC's quarterly survey, high land costs are the primary obstacle to expanding the supply of moderate-income housing. High land costs translate into rent levels unaffordable by middle-class tenants, according to the NMHC. Almost two-thirds of survey respondents, who include CEOs and apartment firm executives who serve on NMHC's board of directors and advisory committee, said moderate-income apartments only make economic sense in locations farther away from downtown urban centers and/or employment areas, where land is less expensive.

Another 20% said even where moderate-income apartments are economically feasible, zoning restrictions and neighborhood opposition make them virtually impossible to develop. According to the NMHC, only 5% considered moderate-income apartments feasible in a wide variety of locations.

The survey also showed signs that the economy's sluggishness is impacting the apartment industry. The NMHC's Market Tightness Index dropped from 47 in January to 30--a score below 50 means there are more markets in which rent increases are slowing and vacancy rates are moving up than those in which the conditions are tightening).

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