Rising median rental prices in Florida, driven by an influx of new residents and high demand, are deepening the state’s housing crisis and challenging economic stability, despite legislative efforts and a slight decline in rental costs in 2023.

An influx of new residents and a stubbornly high demand for rentals have pushed median rental prices in Florida upwards in recent years, challenging affordability and deepening a housing crisis that continues to test the state’s economic resilience.

Data from a Florida TaxWatch report published on Tuesday noted a rise in median rental prices from $1,187 in December 2020 to $1,545 in December 2023, a reflection of demand that has consistently outpaced supply. The surge in rental costs is not an isolated issue, however, with cost of living struggles resonating through the state’s economy, affecting affordability and living conditions for a significant portion of the workforce. Market struggles are further exacerbated by would-be homeowners opting to rent due to high interest and mortgage rates, alongside a surge of transplants moving to the state.

“Despite the influx of individuals and families to Florida, the cost of renting apartments and homeownership remains daunting for many households,” the report states, noting that many in Florida are burdened by housing costs.

In response, the Florida Legislature passed the “Live Local Act” in 2023, aiming to address the affordability crisis by promoting more affordable housing options. Despite these efforts, high rental costs continue to threaten the state’s economic stability and growth.

There’s a slight sign of relief on the horizon, with national vacancy rates at 6.5 percent and a 1 percent year-over-year decrease in rental prices potentially easing the market. In 2023, the market saw a 0.7 percent decrease in rental prices, the first decline since 2020, with forecasts suggesting a potential drop in demand.

Separately, a report last month showed Miami, Orlando, Tampa, and Jacksonville rank among the top 20 U.S. metros for new apartment construction. The Miami metropolitan area was the fourth largest in the country for new apartment construction in 2023, with significant contributions within Miami itself, Hialeah, and West Palm Beach.

The surge in construction across these Florida cities was propelled by several factors, according to the report, including a sustained shift towards remote work dating back to the pandemic. However, the focus on high-end apartments for upper-middle and high-income renters raises concerns about housing affordability for the broader population.

Despite Miami’s uptick in housing construction, Miami-Dade County remains the hottest rental market in America. The county’s Rental Competitivity Index (RCI) — a measurement of rental market competition using factors such as lease renewal rates and occupancy rates — is 122, the highest in the country. The next highest RCI nationwide was North Jersey, New Jersey at 116, while Broward County was Florida’s second most competitive region, with an RCI score of 101.

Miami-Dade County recorded high occupancy rates in its rental properties in 2023, with 71.2 percent of renters electing to renew their leases. For those seeking new housing, each available rental unit in Miami attracted an average of 22 applicants.

Moreover, in November 2023, the rental market in Miami saw average rents reach $3,280, placing it among the costliest metro regions in the country.