By Robyn A. Friedman
City & Shore Magazine
If you’ve shopped for an apartment in South Florida recently, then you’ve no doubt experienced sticker shock when you saw the asking rents. According to the April 2019 National Rent Report released by Zumper, an online rental marketplace, Miami was the 10th most expensive apartment market in the country, with a median rent for one- and two-bedroom units of $1,800 and $2,390, respectively. Many neighborhoods and buildings have even higher rents.
Fort Lauderdale was the 14th most-expensive market, with median rents of $1,600 and $2,000 for one- and two-bedroom units.
These rents are much higher than the national medians of $1,214 for a one-bedroom and $1,445 for a two-bedroom apartment.
“Six out of every 10 renters in South Florida are now paying over 35 percent of their income toward rental expenses,” says Jack McCabe, a housing industry analyst in Deerfield Beach. “It’s become almost impossible for developers to build an affordable rental project here because of the high costs of land, materials and labor.”
With rents so high, it’s no surprise the number of high-income renter households – those earning at least $100,000 per year – grew by 44 percent between 2008 and 2017, according to a recent report by Apartment List, an apartment matchmaking site. Here’s why:
- Low for-sale inventory. There’s a limited supply of single-family homes in many neighborhoods, and available homes are priced aggressively. So, many people are choosing to rent, creating demand for available units and upward pressure on rents.
- Shift toward luxury apartments. New apartment communities coming online are often at the upper end of the market because the cost of land and construction is so high. That translates into more luxury apartments at high rents.
- Renting as a lifestyle choice. Many tenants today are so-called lifestyle tenants – those who can afford to purchase a home but choose to rent instead. Baby boomers in particular are attracted to luxury rentals because of the lack of maintenance and easy ability to lock your door and travel. Others are renting because the new tax laws that kicked in last year limit state and local tax deductions and therefore reduce the incentive to own.
- Desire for walkability. More people are returning to cities, whether for work or after retirement, attracted to the walkability and easy access to live/work/play options. But prices in urban areas are usually higher, including apartment rents, so tenants need higher incomes.
If you’re in the market for new digs, carefully consider your options. Depending on your particular lifestyle – and if you’re willing to assume the obligations of homeownership – purchasing might actually cost less than renting.