BOCA RATON, Fla. – A new study from Florida Atlantic University is putting a spotlight on the rising cost of housing in the state.
Residents are well aware that the cost to rent a house or apartment has skyrocketed in the past year.
Renters are now paying well above long-term leasing trends in four Florida markets, according to the study.
Researchers said the housing crisis in the Miami, Fort Myers, Tampa and Orlando metros likely sprouted from the COVID-19 pandemic.
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At the end of February in the Miami metro area, which includes Broward and Palm Beach counties, rents rose 32.12% from a year ago.
The study found that Miami renters were paying an average 18.98% premium – the difference between where rents should be based on past leasing history and where rents actually are now.
The January premium for rents in Miami was 17.45%.
Rent costs were also much higher than their long-term leasing trends in the Orlando, Tampa and Fort Myers metros:
- Orlando rents are up 24.26% year over year and were leasing at a 10.66% premium at the end of February. In January, the premium was 10.27%
- Tampa rents increased 28.06% in the past year, with a premium of 15.74% at the end of February, up from 15.13% in January
- Fort Myers rents rose 31.84% year over year, with a February premium of 15.21%, down slightly from 15.24% in January
The shift is dramatic from a year ago when homes and apartments in all four markets were leasing for discounts – below historical pricing trends.
“It’s clear that rent increases have become a major problem across Florida, threatening the livelihoods of middle-class consumers,” said economist Ken. H. Johnson, Ph.D. of Florida Atlantic University.
The study’s researchers found that there was some hope that the cost of rentals is slowing in some areas of the state – except the Miami metro area.
“It’s entirely possible that Florida renters will face more moderate rent increases in the months ahead, although Miami still is a concern,” said Shelton Weeks, Ph.D., of Florida Gulf Coast University. “Miami has huge international demand that may help keep rents rising.”
Researchers called the spike in rental costs “unusual,” since they tend to be less volatile than housing prices.
“Demand has risen sharply as more people moved to Florida to escape COVID-19 restrictions while at the same time supply has leveled off because developers struggle to build units due to supply chain shortages and increasing costs for materials,” said Bennie Waller, Ph. D., of Longwood University.
The researchers believe that rent control isn’t a viable option to resolve the problem.
“It is well established by urban economists that rent controls create more problems than they solve,” Johnson said. “Rent ceilings typically lead to a smaller inventory of available units and lower overall property condition. It’s rare that a legislatively managed rent market can distribute a better set of available rental units than competitive market forces.”