When Jamaican Shaneeka Robinson jumped on the early Jet Blue flight from New York to South Florida in June, she expected a smooth transition into her one-bedroom rental in Fort Lauderdale. She was running from the hustle and bustle in search of a better work-life balance.
When she reached however, it wasn’t what she had expected. “The place looked good, but there was no running water in the apartment. My landlord said he couldn’t rent the property anymore and that it would take weeks to fix the issue.”
With that disappointment, Shaneeka rented an Airbnb room, hoping to find something soon. Two weeks later, she got a room in someone’s home for $800.00 in Plantation. It’s now September, and the 27-year-old is still in the one-bedroom unit, trying to find an affordable home to rent.
Shaneeka’s story of finding affordable rentals in South Florida is not unique. The cost of rental properties in the region has gone through the roof. Earlier this year, real estate economist Ken Johnson told ABC News that “Miami metro, which is all the way up through Palm Beach County, is pricing out at roughly 30 percent above this long-term pricing trip. Rental markets in Miami are roughly 22 percent above their long-term premium. That makes that the most overpriced market in the country.”
In May, Bloomberg reported the findings of researchers at Florida Atlantic University (FAU) and Florida Gulf Coast University, which stated that “South Florida is the most overvalued rental market in the U.S.” The report said renters are “paying 22% more than they should.”
And according to WPTV, Realtor.com reported last year that “the Miami-Fort Lauderdale-West Palm Beach area is the third fastest-growing rental market in the country among metro areas.”
But what is causing the rental cost to skyrocket? The answer lies in the basic economic principle that prices will increase when demand is more than supply. And when prices rise, consumers are forced to demand alternatives which also increase prices if there is less supply for the alternative.
There is an influx of national and international migration to the area, and these people need housing. This demand has increased the price of homes in the area because the housing inventory is low. The higher prices cause homebuyers to demand more rental units as alternatives, and with less supply of such housing solutions, rental prices hit the roof.
People move to Florida because of the beautiful weather, cultural diversity, lower cost of living, and zero income tax policy. The New York Post reports that “21,546 New Yorkers swapped their driver’s license for the Sunshine State” for the first four months of this year. This is a 12 percent increase over 2021 figures for the same period. 61,728 New Yorkers moved to Florida in 2021.
Florida was also the final destination for 38,590 immigrants, according to data from The Census Bureau, reported Florida Politics.
Another factor that keeps housing solutions high is the impact of real estate investors. These buyers don’t usually live in the home purchased. They just buy, fix and sell/rent, being quite aware that they can set high prices to satisfy the market demand.
The impact of the Airbnb business has also pushed down rental inventory, causing a supply problem.
Apartmentlist.com reports that Miami rental prices have increased 66 percent from last year’s rates, where a one-bedroom runs for $2,700. If you need two bedrooms, expect to pay around $3,600.
In Fort Lauderdale, rentals have increased by 41 percent year over year. A one-bedroom could set you back $1,975, and a two-bedroom goes for $3,024.
Seven of the top ten highest rental prices in the state are in South Florida, based on average rent according to floridapropertymanagement.com . The list includes:
- Weston
- Boca Raton
- Fort Lauderdale
- Miami Beach
- Coral Gables
- Doral
- Miami
- Tampa
- Orlando
- Jacksonville
Realtor Andre Barrett who has been in the business for 20 years, believes the current rental challenge will continue for another 24 to 36 months. “Rentals are based on supply and demand. Currently, the supply is very short, and the demand is very high. It is strictly a supply and demand issue, and I see nothing on the horizon that will affect the supply side in the near future,” he indicated.
He has not done a lot of rentals in recent times because of the current market conditions. “It is a very competitive market, and we have to ensure that we pre-qualify the clients we invest our time in to secure a property. It is getting increasingly difficult with time,” he told CNW.
With the market being in the hands of property owners, they have the power to decide who qualifies to rent their property. Barrett said in some cases, landlords are accepting the highest down payment over the standard minimum renters are used to. “There are property owners who will accept up to six months’ rent up front as a qualifier to rent their homes. And in some cases, it is the prospective renter who is making the offer. Not many people can afford several months’ rent as an advance payment, but there are some out there who can. When a landlord sees up to 50 offers, it is the best one that wins,” he said.
But with this trend expected to continue over the next three years, according to most experts, how what can realtors say to their clients?
Barrett said he explains the market conditions and how an offer has to be presented to be accepted. “We explain the reality of the South Florida rental market and how an offer has to be structured.” He also tries to gather intelligence from the renter’s agent. “How many offers and showings have they had? What is important to the landlord? This is trying to gauge the overall climate of the situation.”
The Barret Group CEO believes for this situation to end, it will need more inventory in the system. “We need more apartment complexes and more funding for housing programs to keep rents low for some time. The bottom line is more inventory.”
For renters facing hardships and eviction, there may be resources at the county and city governments to help.
The county of Palm Beach community service program is still accepting applications but is temporarily closed due to the “high volume of applications,” according to the website www.rentalassistancepbc.org/. The portal will reopen on October 3, 2022.
In Broward County, rental assistance is available from the Broward Emergency Rental Assistance Program. In May, the county received $22 million in federal funding to assist persons behind in rent or unable to pay.
Cities in Broward with specific rental assistance programs include:
Lauderhill and Lauderdale Lakes
If you live in Miami-Dade, the city of Hialeah has two programs to help:
The Housing Assistance Network of Dade (HAND) Program is one of several communities to receive the Emergency Solutions Grant (ESG) from the Department of Housing and Urban Development (HUD). The funds help individuals and families impacted by the COVID-19 public health emergency. The city also has an Emergency Rental Assistance Program (ERAP) to help individuals.
The county of Miami-Dade has two programs that offer assistance to renters:
The Emergency Rental Assistance (ERA) Program was closed on August 8 due to available funds, but they have applied for more funding.
The county is accepting applications for its Emergency Rental Program 2.4 (ERAP 2.4)
Be mindful that there are requirements to get help from these programs, and assistance is given as long as funding is available.
The Financial Protection Bureau (CFPB) offers advice and help on its website if you face eviction.
