While Congress grapples with proposals for a sweeping overhaul of U.S. immigration policy, the apartment industry is advising firms to prepare to accommodate thousands of new arrivals, primarily Hispanics. Foreign-born and minority households are the fastest-growing segments of the housing market, according to a report by the Joint Center for Housing Studies of Harvard University.

The minority share of U.S. households is expected to expand from 28% in 2005 to more than 32% in 2015 and have a major impact on multifamily housing. Over the next eight years, the number of rental households is projected to increase by at least 1.8 million. "Minorities will be responsible for the entire gain and will eventually account for the majority of renter households," the National Multi Housing Council (NMHC) writes in a lengthy report on preparing for a rental housing boom.

"When it comes to housing demand, the immigration story is essentially a Hispanic story," reports NMHC. Half the immigrants entering the U.S. are Hispanic, and Hispanic households rose by 58% in the 1990s. Hispanics make up 54% of immigrant renters, the report states, and the number is growing annually.

The implication for apartment firms, whether in cities or suburbs, according to NMHC's 2006 annual report, is that "to a large degree, the future of rental housing is focused on Hispanics."

While the immigrants' impact on the rental market in coming years is expected to be substantial, the industry is monitoring the proposed legislation to reform U.S. policy, which could affect the market. One plan gathering bipartisan support in Washington would offer millions of illegal immigrants now in the U.S. a chance for legal status, but would prevent future arrivals from staying.

As the country grows more ethnically diverse, apartment firms will need to adapt to the renters, say authors of the NMHC study. At many properties, Spanish-speaking staff and bilingual leases will become the norm.

Savvy apartment owners already have taken the immigrant market into account. "I think it's critical throughout our mid-Atlantic states and particularly in the Washington, D.C. area," to adjust to the newcomers, says Tom Bozzuto, chairman and CEO of the Maryland-based Bozzuto Group, which has built and acquired more than 28,000 apartments and for-sale homes with a combined value of nearly $3 billion.

"There is a tremendously large immigrant population in Montgomery County," Bozzuto says. Though the county has the image of a wealthy Washington, D.C. suburb, it also has a large share of people who need affordable housing. The company built a mixed-use, mixed-income project that includes 173 apartment units at a subway stop in Wheaton, Md., setting aside 30% of the units for affordable housing. The group also built 122 condos priced from the low $200,000s, a rarity in the pricey capital area.