Florida’s housing crisis could stifle the state’s pandemic recovery efforts, according to a new analysis from Florida TaxWatch (FTW).
The nonprofit government watchdog released an economic commentary on Thursday, entitled Too Expensive to Rent: Florida’s Rental Market and Eviction Moratorium, analyzing the accelerated demand for rental properties in Florida driving up the prices since the start of the COVID-19 pandemic. FTW notes in its analysis that rental demand across Florida picked up in 2021, with median rent prices rising from $1,340 in February 2020 — prior to the pandemic — to just over $1,760 in February 2022.
The increase represents a 31.4 percent upswing over two years, with metropolitan areas like Miami, Tampa and Orlando experiencing the largest uptick in rental prices — even outpacing larger metropolitan areas like San Diego, Austin, and New York City.
“Our grocery bills are rising at an unprecedented rate, and other everyday costs, like gasoline, have soared recently. These escalating prices have also pervaded the housing market, and as a result, young professionals and growing families who may have considered homebuying before the pandemic can’t afford it now, leaving them with renting as their only viable option, says Florida TaxWatch President and CEO Dominic M. Calabro. “In turn, excessive pressure has been placed on Florida’s rental market, causing those prices to climb from a median of $1,340 in February 2020 to over $1,760 in February 2022. Compounded by mass workforce migration from other states, a few larger cities, such as Miami, Tampa, and Orlando, have outpaced other metropolitan areas across the country, including New York City.
Explored in a previous FTW commentary, housing prices spiked statewide in 2021, pricing out many would-be first-time homebuyers who turned to renting. The perfect storm of demand and rising rental prices in the spring and summer of 2021 resulted in upward price pressure on Florida’s rental markets.
Although a seasonal cooldown leveled out rent growth toward the end of 2021, FTW notes that it will likely resume its upward trajectory over the coming months.
As of the fourth quarter in 2021, the rental vacancy rate sits at 5.9 percent in the nation’s southern region (Florida included) – the lowest ever on record. At a national level, preliminary forecasts suggest a steady growth of 7.1 percent throughout 2022, somewhat higher than home price growth.
FTW also notes that prices in Florida’s urban areas will likely exceed national estimates, and specific neighborhoods may maintain the double-digit growth rates that have been reported since 2020, with some exceeding 60 percent.
Looking ahead, FTW warns that without affordable, feasible housing options, rental property shortages could persist, resulting in industry sectors losing younger, lower-income workers crucial to Florida’s post-pandemic resurgence.
“While Florida is known for its robust job creation and low-tax environment, affordable housing is understandably a major concern for many, and it threatens to undermine the state’s continued economic recovery and ultimate success. Leaders and decisionmakers should heed this warning and adapt as appropriate to ensure all who call – and hope to call – the Sunshine State ‘home’ can thrive here,” Calabro added.