AvalonBay Communities ( AVB) is the best-in-breed housing REIT on the market right now. This $13 billion firm is one of the largest apartment REITs in the country, with approximately 47,000 units spread throughout the U.S. Last week, management announced an 8.68% dividend hike that brings the firm's yield to 2.59%. One critical difference between AvalonBay and the commercial REITs most investors are familiar with is the type of lease that housing trusts are able to offer up. Because residential leases are dramatically shorter and have tighter consumer protection regulations, they don't have the same attributes that make most REITs more an income generation tool than a play on real estate. Even so, AVB's continual ability to drive dividend payouts has been impressive. In a niche where capital requirements are high and profitability has been challenging, this stock has turned out some solid numbers. Part of AVB's success has come from its geographic footprint. The firm's properties are focused around metropolitan areas where demand for housing is high and home ownership remains unaffordable for many. While true income investors should relegate their REIT ownership to higher-yielding commericals, those in search of diversification would do well to include this stock in their REIT portfolios. To see these dividend plays in action, check out the Dividend Stocks for the Week portfolio on Stockpickr. And if you haven't already done so, join Stockpickr today to create your own dividend portfolio. -- Written by Jonas Elmerraji in Baltimore.