A Florida Atlantic University researcher believes an abundance of short-term vacation rentals and oppressive restrictions imposed by homeowners’ and condo associations are contributing to Florida’s rental crisis.
Short-term rentals, such as those listed on Airbnb and similar websites, keep units out of an already depleted housing stock, according to Ken H. JohnsonPh.D., Economist at FAU College of Business. Meanwhile, many HOAs across the state prevent landlords from renting their units in the first year or prohibit renting altogether.
“These two take-out units that could be rented out to the public, and it’s the shortage of available units that’s driving rental rates up,” Johnson said. “While developers and local governments clearly need to build more units, that’s not the only solution to this problem.”
Rent increases are easing across much of the country, but Florida is still home to nine of the 21 most expensive markets in the United States, according to the latest figures from the Waller, Weeks and Johnson Rental Index. The monthly report shows the premiums current tenants are paying based on a rental history dating back to 2014.
For example, Cape Coral-Fort Myers renters lead the nation in paying 18.05% above trend for long-term rentals. Miami; North Harbor; Tampa; Orlando; Delta-Daytona Beach; Palm Bay-Melbourne; Jacksonville; and Lakeland also have some of the highest bonuses in the country.
The average rental premium paid in the United States is 7.40%.
“As a state, we need to realize that the current rental crisis is hurting our potential for economic growth and making it increasingly difficult for service workers to live within reasonable distances of their jobs,” Johnson said.
Given the steep rise in rents over the past two years, owners of short-term rentals could find better returns by converting their properties to long-term rentals, according to Johnson. He added that HOA boards that choose to relax or eliminate rental restrictions will increase property values for their residents.
“In either case, HOA landlords and boards have an incentive to change what they’re doing, and at the same time, they would help alleviate Florida’s rental problem,” Johnson said. “The markets will work in time and we will slowly build enough units to mitigate this crisis. But there can also be relief in the meantime.
-FAU-
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