Skyrocketing housing costs spark calls for state leaders to respond
Florida’s spiraling housing affordability crisis has sent protestors to the streets across the state.
Many parts of Florida have simply become too expensive for many people to live.
Across the state, protestors are calling for relief from skyrocketing rents and home prices. Earlier this month, domestic workers across South Florida gathered for a march through Downtown Miami on International Workers' Day to protest high rents. Protestors say the housing affordability crisis is pricing them out of their neighborhoods.
A report from Rent.com puts a one-bedroom apartment in Miami at $2,744 per month, up 21.6% from last year.
At the same time, the state Department of Children and Families is no longer taking applications for a federally funded rental- and utility-assistance program for low-income and unemployed residents. The department launched the OUR Florida program, or Opportunities for Utilities and Rental Assistance, last year to help people who were behind on rent or utility payments. Applications were accepted through Thursday of this week.
And this week, there was news that a pair of investment firms tied to Goldman Sachs has bought up an entire rental home community in Brevard County. They spent $45 million for 87 single-family homes in the Cypress Bay neighborhood in the city of Palm Bay. That averages out to more than half a million dollars for each house.
"That's free market enterprise," said Palm Bay Mayor Rob Medina. "That whole community is pretty much an upscale community, so I'm sure they'll still protect that investment."
About 40% of the rental homes were occupied at the time of the sale in February. In January, the median price of a single-family home in Brevard County was $329,000, up 22% from a year earlier according to data from the Space Coast Association of Realtors.
A two-bedroom apartment rents for about $1,200 a month.
"This (sale) will actually affect the rental market," said Medina.
Demand for housing in Florida has shot up during the pandemic as the state's population continues swelling. It has grown to almost 22 million people, up more than 4% in two years.
The state had 9.7 million housing units in 2019. The 2021 data will be released by the Census Bureau on May 24.
With a growing population and rising real estate values, corporate buyers have joined individual investors and residents in bidding up prices.
"Florida came into that situation with an existing shortage of affordable housing and in particular, affordable rental housing," said Anne Ray, Florida Housing Data Clearinghouse Manager at Shimberg Center for Housing Studies. "People who might have moved into homeownership are renting and that places more pressure on a rental market as well."
Residential building permits are on the rise — with more than 19,000 authorized in March. These include single family homes and housing structures of all types. This is the highest number issued in March since the spring of 2006. It represents the possibility of new supply as not every building permit will be utilized.
In addition to the higher cost of homes and rents. Florida's traditionally lower median household income creates additional challenges. The average Floridian's household pay was about $10,000 less than the national average in 2020.
At $57,435, the average Florida household could spend about $1,400 a month on housing before being considered "cost burdened."
Many areas are experiencing "a gap between what wages from many jobs pay and what rents actually cost," said Ray. Some are experiencing rent increases, such as in Miami, that have been as high as 50% compared to a year ago.
Florida is home to eight of the top 10 housing markets with the fastest rising rents, according to real estate research firm CoStar.
"It's not like there's another safe haven in the state to go to where maybe in previous increases in housing costs there have been," Ray said.
Several local governments have passed rent hike rules requiring landlords to tell tenants well in advance of rent hikes of more than 5%. And some have provided temporary rental assistance.
"I'm really concerned about what happens next," said Ray. "We need to look at keeping that emergency rental assistance infrastructure and looking at the recovery funds that we have now in funds coming in to communities to see whether we can keep that going."