ARCHSTONE HAS BEEN around long enough to know the basic rule of multifamily arithmetic: jobs minus housing equals a fantastic development opportunity. Archstone officials comb submarkets to find the neighborhoods where this equation best translates to new apartment construction.

The firm's latest find: Washington, D.C.'s NoMa neighborhood, where Archstone broke ground July 13 on a 469-unit Class A apartment project near Union Station, the U.S. Capitol, and thousands of government and private sector jobs.

“Archstone looks for net job importing locations—places where there are more jobs than people living,” says Rob Seldin, senior vice president of development for the East Region of the Englewood, Colo.-based firm. “We began canvassing NoMa as early as 2005, looking in earnest for opportunities because the District had established very forward-thinking development incentives.”

With the construction of a new, nearby metro station funded in part by property tax increases, the city moved in recompense to rezone all adjacent property to C3c: high-density commercial carrying a station area residential [SAR] zone and 90-foot height allowance that can be developed as office, retail, hotel, or apartments. An additional zoning change permitted for up to 10 stories at 130 feet (the maximum height allowed in the city).

Still, D.C. development economics made pulling the trigger on multifamily an iffy prospect. With similar construction costs, office buildings command $60 per square foot in rent compared to $30 per square foot for apartments. Although the rent differential was less severe in NoMa, multifamily still didn't make sense until the city—eager for new housing—passed a 10-year tax abatement in February 2009 for the first 3,000 units to be built in NoMa.

Archstone, for one, seized the opportunity by working with Needham, Mass.-based financier CWCapital to secure a $151.8 million FHA loan—one of the largest in FHA history—that closed July 8. The 100 percent nonrecourse loan is 90 percent loan-to-cost and includes a 30-month construction period and 40-year fully-amortizing permanent financing.

Seldin hopes such creativity will make multifamily vital in placemaking. “Five years ago, NoMa was mostly parking lots, and now new development is happening again. [It is] an economic miracle.”