South Florida becomes the nation’s worst place to rent
South Florida could become the worst place in the country for renters by the end of the year, in part because wages aren’t keeping up with sky-high rent increases. a new forecast shows.
Renters here are likely to spend 40% of their income on rentals by the end of the year, according to forecasts from Zillow, an online real estate marketplace that studies real estate trends.
That would be a percentage point above June and well above the 30% prescribed by financial advisers.
“It will become the most unaffordable rental market in the country at the end of the year as rent prices and tenant incomes cannot keep up,” said Nicole Bachaud, economic data analyst at Zillow.
Wages in South Florida have increased slightly, but not as much as the national average and not as fast as rents are rising, said Ken H. Johnson, real estate economist at Florida Atlantic University.
Wages and salaries rose 2.9% in South Florida between June 2020 and June 2021, up from 3.5% nationally, according to the United States Bureau of Labor Statistics. At the same time, the consumer price index for housing in the region increased by 3.5%.
“The wages paid have little impact on a worker’s ability to pay that monthly rent,” said Dr. Edward Murray, associate director of the Jorge M. Perez Metropolitan Center at Florida International University.
Service workers, the bulk of South Florida’s workforce, received only a few dollars in pay increases per hour, while rents have risen steadily, Murray said.
For example, apartment rents in Fort Lauderdale have risen 17% in the past year, while rents in West Palm Beach have risen just over 18%, according to data from Apartment List, a online marketplace for apartment listings. Miami has seen a 19% increase in rents in the past year.
To afford rental accommodation, some people turn to co-signers for a lease or add a roommate to the mix, said Carolina Gerdts, executive vice president of RelatedISG Realty.
The gap between wage growth and rents has forced many tenants to be “silently evicted,” Murray said – meaning they were forced to leave because they couldn’t afford a lease as the price went up, Murray said.