Florida rents have cooled but tenant misery abounds
The state saw a cooling down of rising rental prices but so far, no decreases. Some experts think some markets will never see decreases.
Florida’s harrowing tempest of rent hikes following the pandemic relaxed significantly in 2022.
However, the state remained an area of concern for housing advocates and analysts, with prices still brutally high for many residents.
Last year, median rents statewide increased 3.9% compared to the 30% spike the previous year, according to the national online leasing group Apartment List.
In Fort Myers, rents still increased by 10.3% over the year.
It's a far drop from a year before, when they increased 36.5%.
However, Fort Myers is the only city that still saw a double-digit increase from 2021 to 2022 (out of the 30 included in Apartment List's statewide report).
In nearby Naples, renters saw more relief – at least as it relates to increases.
While the smaller city isn't listed in the report, the larger metro area of Naples-Marco Island saw rents rise only 2.1% last year, compared to 52.7% in 2021.
The metro continues to have one of the highest median rents in the state at $2,168.
A few cities in Florida saw declines in rent last year, including Lakeland and Clearwater.
In West Palm Beach, median rents were up less than 1% in 2022, compared to the nearly 37% jump the year before. Meanwhile, Boca Raton’s rates remained relatively flat, and Delray Beach and Palm Beach Gardens saw small declines.
“What jumps out quickly is that although much of the state got more expensive in 2022, it was a major slowdown compared to the dramatic rent inflation that took place in 2021,” said Rob Warnock, a senior research associate for Apartment List. “We’re still in an environment where rents are rising but the market is certainly stabilizing.”
Nationally, some pandemic boom towns — like Austin, Texas, Boise, Idaho, and Phoenix, Arizona — that experienced rapid influxes of residents in 2020 and 2021 saw rental rates flatten or fall last year, according to a year-end report by Zumper.
As some boom towns see rents flatten or fall, Florida defies 'all expectations'
The Zumper report notes that “Florida continues to defy all expectations with continued migrations (and subsequent rent hikes) in nearly every corner of the state. People who migrated to Florida during the pandemic are staying at much higher rates, meaning rent increases are sticking around for a bit longer.”
That can mean a prolonged burden for longtime residents who may not have seen their salaries grow to keep up with 2021’s price hikes followed by 2022’s swollen inflation.
West Palm Beach resident Lorena Kelley, a Realtor with Southdale Properties, said she convinced her sister to move closer to the school she teaches at in West Palm Beach last year so she could stop commuting from Boca Raton, about 27 miles away. Her sister’s rental budget was $1,500 a month.
“I could not find her a rental at all. I was asking every Realtor I know, every person I know,” Kelley said.
With some haggling, her sister finally snagged a small two-bedroom home for $1,850 a month.
“What I’m seeing is more in the range of $2,500 to $4,000 for a two- to three-bedroom in a good neighborhood,” Kelley said. “Then you have to pay first, last and security deposit so you are coming out of the gate sometimes at $12,000.”
In South Florida, some of 2022's biggest rental increases were in Broward and Miami-Dade counties. But they also were in cities such as Gainesville, where rents jumped nearly 8% last year, according to Apartment List.
Melbourne was also up nearly 8% and Tallahassee was up 8.6%. But none more than Fort Myers.
A Florida Atlantic University rent study released this month found that tenants in the Miami metro region, which includes Palm Beach, Broward and Miami-Dade counties, ranked as the third highest nationally for overpaying on rent, compared to norms. Average rent across all housing types and sizes was $2,770 in December for the tri-county area, according to the report. That's 14.6% higher than historic averages.
Southwest Florida's Cape Coral and North Port metro areas ranked first and second in FAU's study of the most-overpriced rental markets.
Naples is too small for the study.
More:Study: Cape Coral-Fort Myers most overvalued housing market in the country
"I don't think people will stop moving to Florida," said Crystal Chen, a spokesperson for Zumper. "And because Miami has gotten so expensive, some neighboring cities like West Palm Beach might have to absorb some of that market."
U.S. Census Bureau data released in December showed a weighty population increase last year in Florida of 1.9%, marking the first time since 1957 that Florida led the nation for growth rate. The increase amounted to 416,754 residents statewide, and the state Demographic Estimating Conference is expecting a population growth through 2027 of 294,756 new residents per year. That's about 800 people per day.
At the same time, the Florida Apartment Association says Palm Beach County alone has a deficit of 6,935 apartments to meet demand, a shortage that overwhelmingly hurts lower-income workers. Statewide, the association estimates 570,000 new housing units will be needed by 2030 to meet population increases.
Southwest Florida continues to suffer from an affordable housing crisis, with a critical shortage of workforce housing, including apartments. The problem has only grown more severe with the devastation caused by Hurricane Ian.
In case you missed it:Collier County has a housing crisis 'times two' thanks to Hurricane Ian
While last year's rent increases were smaller than in 2021, they could still push workers out of state and into regions with lower prices, warned Florida TaxWatch in a recent report.
The report noted that rents in Georgia and Texas are about $300 to $400 less than in Florida.
Rent is typically considered affordable when it costs 30% or less of a household’s income.
High rents could push some workers out of Florida's workforce
Of 10 occupations TaxWatch reviewed from restaurant workers to nurses, only one earned enough to afford Florida’s median rent of $1,698 as calculated by TaxWatch. That job was “management.” Restaurant workers came up short by as much as $1,074 a month, with healthcare workers short $146 a month.
“Many households, however, have more than one revenue stream,” the report stated.
For those that don’t, the options include finding roommates, getting monetary support from family or living with relatives.
Tequisha Myles, supervising attorney at the Fair Housing Project of the Legal Aid Society, said in 2021 and early 2022 she got regular complaints of rent hikes of $500 to $600 a month.
“That’s kind of cooled off,” Myles said. “I’m not getting as many calls with that kind of large or sudden increase.”
Palm Beach County Community Services Director James Green echoed that experience. About half of the applicants for housing assistance in the county are typically earning 50% or less of the area median income of $70,250.
In the beginning of 2022, Green said there was an increase in higher earners that needed help. Today, he said the higher earners are still there, but the numbers aren't growing.
A county-approved ordinance requiring landlords to give a 60-day notice if they intended to raise rents more than 5% or to terminate a lease has helped ease some of the rental angst by giving people more time to find alternative housing, Green said.
Several Florida cities have adopted a similar rule, including Naples.
Collier County passed one, but then rescinded it after a change in leadership, with a majority favoring smaller government and less government overreach.
While rent forecasts for this year call for continued stabilization, FAU housing economist Ken H. Johnson doesn't expect prices to return to pre-pandemic levels.
"It is one thing for rents to slow, but another for rents to decline," he said. "So, affordability will be an issue until incomes rise closer to monthly rents."
Naples Daily News reporter Laura Layden contributed to this report.