South Florida residents undergo the highest rental prices and low affordability rate in the U.S.
By Veronica Hernandez and Carolina Lopez
The Coronavirus crisis was an anchor for a majority of 2020, altering almost every feature of daily life as we know it. Our housing options are no exception. From the very start of the pandemic, the groundbreaking housing story was how prices were sky-rocketing due to the momentous shortfall of properties for sale.
Today, this shortage is flooding over into the rental market. Things are heating up in southern cities, especially in Miami — and it’s not the temperature. Roughly half of Americans exchanged freezing, over-priced areas in the U.S. for a more affordable, warmer residency in the South.
Rents are rising across the U.S. at a rapid speed, making it extremely problematic for renters to locate an inexpensive residence. According to a recent U.S. Census Bureau report, from the summer of 2020 statistics have shown soaring residential rental prices have caused south Florida metropolitan area residents to belong to the largest laden by rent in the country.
The argument that rents are ascending so rapidly is that most individuals are battling for places to live. The rental vacancy rate decreased to 5.8% — the least it’s been since the mid-1980s, according to a new report issued by the Joint Center for Housing Studies of Harvard University.
This is affecting lower-income renters the most as the housing deficiency alongside the expensive prices is making it challenging to spot places to live that coincide with their finances. The top ten counties that saw the highest population increase were primarily in the South, amongst those were in Florida also known for their popularity with retirees.
February 2022 was the seventh consecutive month when rent price increases were in the double digits for studios to two-bedroom properties — costing renters nationally an average 17.1% more than what they paid last year, according to a recent Realtor.com report. Home rents in the Miami metropolitan area had escalated more than 55% year-over-year as of February — the largest yearly spike for any U.S. city.
The average rent for typical studios to two-bedroom apartments in Miami, FL, is twice as high as the approximated highest economical rent for the average household. As per a recent federal data of the average household income, Miami currently ranks as the least affordable city in the nation, with the usual renter paying an overwhelming 59.5% of monthly household income to pay rent. As per the U.S. Federal Housing Department, they’ve categorized “affordable rent” to cost 30% of household income, and anything more would be otherwise classified as unaffordable.
Michelle Urbistondo works at GRASP Realty in Miami and has never witnessed rental prices rise so drastically as they have in the previous year, with few properties renting beyond the listing price — and flying quickly.
One apartment was listed at $1,800.00 and was rented at $2,300.00. Another tenant who paid $1,900.00 had settled not to renew their lease, and the agency later rented out the apartment for $2,900.00.
“In a separate scenario, we listed a property online late at night. One of our agents showed the unit at 9 a.m., and we had a contract written that same afternoon,” says Urbistondo.
“Alternative factors adding to Miami’s increasing rent prices is its distinction as a well-known ‘international’ city,” Urbistondo explains.
“It is primarily salvaging from rents not rising as they normally would since the coronavirus pandemic,” says Urbistondo. “With expansive inflation trends in all places, proprietors are attempting to compensate for higher costs in property taxes, utilities, and maintenance by passing those on to tenants to cultivate their position.”
As the world reopens and individuals are more comfortable traveling, they are searching to relocate where there are lower taxes, not to mention no longer worrying about snow. That, alongside a large compression of retirees and international renters, who are paying for their housing with wealth versus income, is another factor.
Overall, Florida saw a population gain during the latter annual period, growing by more than 211,000 to 21.78 million people. The Tampa metropolitan area saw the largest net domestic-migration increase among all U.S. metropolitan areas, its population swelling from July 2020 through July 2021 by more than 36,000 people, to more than 3.2 million.
Florida metropolitan areas also accounted for four of the 10 fastest growing metros in the U.S during the stretch included: Punta Gorda, up 3.7% in residents; The Villages, 3.6%; Lakeland-Winter Haven, 3.3%; and Cape Coral-Fort Myers, 3.0%. And Polk and Lee counties accounted for two of the 10 highest growing counties nationwide. Polk’s population climbed by more than 24,000 to 753,520, while Lee grew by more than 23,000 to 787,976.
Cities within south Florida, especially the city of Miami, is a hot market for real estate investors, and it has seen its population increase, along with other Sun Belt destinations, according to a recent investor report.
“When people are able to work remotely and are no longer tied to being in New York or California, they’d rather be down here,” says Urbistondo. “I guess the phrase ‘flying south for the winter’ brings on a whole new meaning in Miami’s current rental market.”
