The following editorial was published in the Daily Sun on June 14, 2022.
OUR POSITION: For years high taxes and housings costs have sparked an exodus from the East and Midwest to Florida but the Sunshine State’s escalating home prices and rents are giving pause to relocation considerations.
Inflation’s storm surge continues to deluge consumers with higher prices — with Florida on the front lines for rocketing housing and other costs.
The new Consumer Price Index shows prices are up 8.6% compared to a year ago — the highest inflation rate in 40 years. Grocery prices have increased 11.9% since last year. Gasoline prices are up 48.7%. Fuel prices are nearing or above $5 per gallon across the country, according to AAA.
The economic pain is far more “transitory.”
Inflationary challenges are most intense in Florida (along with Arizona). The latest CPI numbers show the inflation rate is 9.6% in Miami and 11% in Phoenix.
Higher costs of living — especially related to housing — are major challenges across Florida and our region.
Cheaper cost of living has long been a competitive advantage for Florida compared to California, New York, Chicago and other northern and eastern markets.
But more intense inflation, rising housing prices and lack of affordable and workforce housing threaten to erode Florida’s cost advantages. That could gives states such as South Carolina, Alabama and Tennessee economic advantages versus Florida.
Frontline service and tourism industry workers as well as teachers, cops, paramedics, nurses and firefighters are running out of places to live in too many of the Florida communities they serve.
The latest inflation and housing numbers are another call to look at how to bring more workforce and affordable housing options to our communities. Zoning changes, new development standards and responsible economic development incentives should all be on the table to help bring more private sector to interest related to affordable and innovative housing options for our neighbors in jobs essential to our communities and economy.
It’s also our neighbors working at restaurants, bars, grocery stories, schools and medical offices who are feeling the brunt of inflation along with central bank and fiscal policies the most.
Rents are apartment homes are up 16.4% over the past 12 months.
They are up 32.4% in Fort Myers, 31.7% in Miami and 30.9% in the North Port-Sarasota-Bradenton area, according to a new analysis by Florida Atlantic University, Florida Gulf Coast University and the University of Alabama.
Those are the highest three rental housing increases in the country and Florida markets (including Tampa, Orlando and Port St. Lucie) make up eight of the U.S. regions with the steepest price increases.
Rents average $2,331 per month in North Port and Sarasota. They average more than $2,000 per month in Fort Myers and the Tampa metro area, according to the universities.
The price of rental housing in Miami and Fort Lauderdale averages $2,846 per month. That is in company with New York and California and very difficult to make ends meet for those outside the wealthy bubble.
Home prices increased 20.9% nationally in April 2022, compared to April 2021, according to the latest CoreLogic’s Home Price Index.
The Tampa Bay region posted the highest year-over-year home price increases among the 20 largest U.S. metropolitan areas in April, at 33.1%.
Those price gains are good for property owners’ equity but they are increasingly pricing out middle class and first-time buyers.
Higher interest rates needed to take the steam out of inflation will also make mortgages, auto loans and small business financing more expensive.
That will leave too many of our neighbors facing an economic recession while not being able to afford housing.
The economic pains will require hard looks at bipartisan fiscal and monetary policies up and down levels of government. We also need some paradigm shifts and changed public and private sector mindsets related to housing especially for lower-wage and front line workers.
History has repeatedly taught us that inflation, food shortages and squeezing workers need solutions and new approaches otherwise the economy and social constructs can face adversity and major upheavals.