South Florida’s Rental Market Must Be Addressed
Posted by Brian Pearl on Monday, September 27th, 2021 at 1:38pm
South Florida’s rental market has long been less-than-ideal for non-homeowners.
Landlords operated happily within the free market, raising their rates and easily finding plenty of takers ready to bask in the temperate weather and vibrant culture that our region offers. Those whose bank accounts couldn’t keep up were hastily left behind.
The past year seems to have accelerated the trend even more as too few new apartments have been built, and affordable housing has become even more scarce. Renters seemingly have little to no control of the market, making Florida one of the worst locations in the country to rent in. This reality has re-started the conversation over rent control—a proposal that has always failed in the past; but with examples set by other populous states like California, New Jersey, and New York, there may yet be change on the horizon.
On the west coast of the US, landlords residing in California and Oregon cannot raise rent more than 5-10% over cost of living increases. Certain cities also have their own limits. In cap-free Florida however, rents across Palm Beach have jumped by 21% since the first of the year. Fort Lauderdale hasn’t been far behind, at 16.1%. Surprisingly, Miami trails with an 11.6% increase since January 1, 2021.
This has meant that in areas heavily dependent upon tourism, a majority of the workforce earning low wages in the service and hospitality industry are losing more and more housing options. Taking their place have been more well-moneyed tenets offering over asking rate, or providing a year’s worth of rent upfront. There’s simply no incentive for landlords not to take advantage of the money being thrown their way—especially since housing is a basic necessity.
Florida law currently allows landlords free rein to set rents as they see fit, with the only local stipulations arising in the event of a “housing emergency so grave as to constitute a serious menace to the general public.” Proving a crisis falls on local governments, who must then have an election to pass a rent control ordinance; followed by an annual election to maintain it afterward. Thus far, any bills put forth at the state level to grant more control to local governments have languished.
Out of control rent prices can potentially have a broader impact on the economy.
Lower level workers across doctor’s offices, banks, restaurants, lawn care services, etc. who cannot afford housing are forced to move to other areas. A lack of employees can clearly have drastic effects on businesses and even landlords themselves.
Opponents to rent control put their faith in the free market—insisting that the issue is one of quantity. Building more apartments will increase competition in a market starved for new inventory. Currently, the demand outpaces the supply, leading to higher prices. In Palm Beach County for example, it is estimated more than 6,600 new rental apartments are necessary over the next two years. Additionally, rent control makes it harder for developers—also a lynchpin of the local economy—to achieve the returns necessary on their projects.
Regardless of the appropriate solution, the fact of the matter remains: renters are stuck between a rock and a hard place, while landlords will undoubtedly continue to get theirs while the gettin’ is good. Something must be done to ensure both sides can continue to make a living in South Florida. Fortunately, an experienced local real estate agent can go a long way in finding the right rental option for you based on your needs and goals.
Contact The Pearl Antonacci Group today to get started!
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