The following editorial was published in The Daily Sun on May 3, 2022.
OUR POSITION: There’s no relief on the horizon for soaring housing costs.
The lack of affordable housing options for many of our neighbors here in Florida and across the country is at a crisis level.
Home prices jumped 32.6% in Tampa and 29.7% in Miami during the past 12 months, according to the most recent S&P CoreLogic Case-Shiller home price index.
The latest index shows the Florida markets outpaced the 19.8% national home prices gains between March 2021 and March 2022. Only Phoenix (32.9%) had stronger home prices gains, according to the much-watched real estate index.
The median statewide price for a home in March was $396,558 — up 21.3% from a year ago, according to the Florida Realtors industry group. Florida’s median home price was $269,000 before the coronavirus pandemic hit. Home prices have risen more $127,559.
That is a lot of equity and wealth accumulation for property owners, especially in wealthy coastal markets.
But high prices and increasing interest rates (to deal with 40-year high inflation) are making it tough on entry level and first-time home buyers and forcing people to look for rental properties which are in turn impacted by the buyer’s market.
The same dynamic is at play with apartment rents across Florida and the country.
Tenants are seeing astounding asking rents and rental prices. The median price for a one-bedroom apartment in Miami is more than $2,600 per month, according to a new analysis by real estate firm Zumper.
That puts South Beach in the same expensive bracket as New York City and San Francisco.
Rents are up 47% in Sarasota, 50% in Naples and 41% in Tampa since early 2020 and the start of the pandemic, according to the report.
Rents for two-bedroom apartments in Sarasota and Naples range between $1,900 and $2,200.
Again, that is good news for landlords and hedge funds focused on real estate investments. But it makes it tough on many of our neighbors.
They are being priced out of the real estate market. Higher housing costs along with the highest overall inflation in two generations is not tenable for too many households.
The housing crunch is hitting middle class workers including nurses, teachers, police officers and firefighters as well as their lower-paid counterparts working at restaurants, grocery stores as well as the tourism and logistics sectors.
Florida is losing a bit of its affordability advantage compared to other states.
The affordability challenge has caught the eyes of elected officials and housing advocates throughout the state. They talk about “workforce housing” and incentivizing developers to build more affordable units.
That is a challenge when those community needs push up against a private sector marketplace where developers and landlords are ‘making bank’ on higher rents and new expensive housing units.
As long as profits are at the ready, it is going to be difficult to convince private developers and landlords to put a focus on community needs.
They are going to have to be cajoled by local governments via zoning and land-use rules and comprehensive policies that look to bring more affordable units to communities in need.
That will require some gumption from local elected officials who are often well-financed by home builders, apartment developers and their lobbyists.
We are going to have to see some specific areas of our Florida communities be earmarked for new affordable and middle-class housing. That will require creative thinking (including requests for proposals for innovative housing solutions).
It might also require some common sense departures from Republicans’ adherence to the winds of the marketplace and Democrats’ penchant to create bureaucracies and preferred constituencies rather than broader solutions.
Otherwise, the current labor shortage, especially among front line industries, is going to get worse if workers can’t afford to live anywhere close to where they work.
Image Credits: Sun Coast Media Group