As America's population becomes more diverse, so too does its housing needs and preferences. Despite the carefully nurtured bias toward homeownership, a growing number of Americans now say they prefer apartment living.

In fact, nearly 40% of renters surveyed in 1999 by Washington, D.C.-based Fannie Mae said that buying a home was neither an important priority nor a priority at all. Many of these renters prefer the conveniences and amenities available in an apartment, while others value the flexibility it offers.

Whatever the reason, apartment living is clearly becoming more popular. Homeownership is an important part of the American ethos, and for many who have never owned a home, a desirable goal. But the goal of homeownership may no longer be as universal as it once was.

A housing policy focused almost exclusively on homeownership overlooks the need and desire for rental housing. It ignores the many advantages apartments offer communities, and it puts renters at a disadvantage without clear evidence that owners make better citizens.

Perhaps most importantly, it downplays the potential social costs associated with homeownership, such as decreasing labor-market mobility and increasing financial risk.

Instead of directing all of our housing resources toward raising homeownership rates even higher, the nation would be better served by a more balanced housing policy - one that seeks to provide all Americans with good, quality housing, regardless of whether that home is one they own or rent.

A smarter housing policy does the following:

- It ensures that everyone has access to decent and affordable housing, regardless if they rent or own.

- It respects the rights of individuals to choose the housing that best meets their financial and lifestyle needs without putting those who choose apartment living at a disadvantage - financial or otherwise.

- It promotes healthy and livable communities by encouraging responsible land use and promoting the production of all housing types.

- It recognizes that all decent housing, including apartments, and all citizens, including renters, make positive economic, political and social contributions to their communities.

- It balances the expected benefits of regulations with their costs to minimize the impact on housing affordability.

Community benefits By ignoring apartments in our housing policy debates, we ignore the many advantages they offer communities. In particular, we forego the important contributions apartments make to our efforts to "grow smarter." Higher-density housing, such as apartments, makes it easier to preserve open space and create pedestrian-friendly neighborhoods. Apartments use municipal infrastructure more efficiently and place fewer burdens on local schools and regional roads than single-family homes.

Also, apartment households generate 30% to 40% fewer vehicle trips than single-family units, and fewer apartment households have school-aged children than single-family homes.

Finally, apartments help revitalize neglected neighborhoods and have an immediate and long-lasting effect on a community's prosperity. Research indicates that the ongoing, annual effect of 100 new apartment households in a local economy is 46 new local jobs; $308,000 in local taxes and fees; and $1.8 million in local wages and business receipts.

Communities that preclude or limit renters risk losing vital customers and employees for local businesses. In today's tight labor market, communities that offer a wide range of housing options and a diversified work force have a competitive advantage in recruiting new employers and helping existing ones grow. A housing policy that fails to appreciate these advantages contributes to land-use decisions that put both renters and owners at a disadvantage.

Federal housing policy generally provides benefits to homeowners that are not available to renters, reflecting and furthering a perception that owners are better citizens. But there is no clear evidence that this is the case. Many of the presumed differences between owners and renters are actually nonexistent. Other differences are small and often not attributable to ownership, per se, but to other characteristics that distinguish owners from renters, such as age, education and income.

Research by the Washington, D.C.-based National Multi Housing Council (NMHC) shows that apartment residents are generally more socially engaged, equally involved in community groups and similarly attached to their communities and religious organizations compared with homeowners. The research, which was based on a University of Chicago survey, also found apartment residents comparably interested in national affairs and active in local politics.

Ownership has its drawbacks Furthermore, the disadvantages of homeownership tend to get swept under the rug. Research indicates that high rates of homeownership may retard national economic growth by locking workers into stagnant or declining labor markets. High rates may also put low-income households, in particular, at risk of defaulting on their mortgages.

Without clear evidence of the social benefits of homeownership, the national price tag for our homeownership bias seems awfully steep. In 1999, owners received $78 billion in tax advantages through mortgage-interest and property-tax deductions. This is more than the combined federal spending on education, roads, mass transit and national parks.

Apartment demand is likely to continue to grow. Between now and 2010, the fastest-growing household types are those most likely to select apartment living: childless couples and single-person households.

The time has come for a smarter, more balanced housing policy. Our resources and energies should be directed toward providing all Americans with access to quality housing, without worrying about whether they own or rent that housing. NMHC and the Alexandria, Va.-based National Apartment Association (NAA) are working together to make sure that current policy makers and would-be office holders understand the importance of expanding our housing policy debates to better reflect our society's changing needs and preferences.