Short-term home rentals weigh on expensive and tight South Florida housing market, new report says
Renters in South Florida can partly blame high house rents on the popularity of short-term rentals in the area, according to a new report from a Florida Atlantic University housing expert.
According to latest monthly rent index by Ken H. Johnson, FAU professor of finance specializing in real estate. Johnson based his conclusion on anecdotal evidence from conversations with about 200 real estate agents, tenants and developers in 2022, as well as rental data from Zillow, a national online real estate marketplace.
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What is the solution then in one of main markets in the country to arrange short-term rentals through the Airbnb and Vrbo digital platforms and one where the property homeowners earn the most money by regularly using these platforms to rent their condos and apartments for weekends, weekly or monthly stays?
Miami is one of the most expensive Airbnb markets in the world: The average monthly price for a short-term rental in the city is $8,024, according to a study published in March 2022 by Compare the Market, making it the third most profitable Airbnb market globally for hosts, after Las Vegas and Honolulu. In 2021, Miami Airbnbs hosted 710,000 guests and earned $200 million for hosts, Airbnb said at the time.
A North American Airbnb spokesperson told the Miami Herald last March that the company has seen long-stay bookings of 28 days or more through the online platform soar in cities like Miami since the start of the year. emergence of the pandemic. The spokesperson attributed Miami’s appeal to year-round sunshine, a wealth of outdoor activities and lax COVID-19 rules that have pushed remote workers here to live and work.
Johnson said landlords should opt to seek out long-term leases in the interest of the regional housing market and their individual bottom line. In this economy where more renters this year would have to opt for roommates or go home with their parents because they can’t afford rental costs on their own, Johnson said, landlords would be less at risk with a single stable tenant. for a year or more.
“With a recession looming,” Johnson said, “demand may not be what it used to be (for short-term rentals), but there will be demand for long-term rentals. ) potential encourages us to ditch short-term rentals as fewer people will be working remotely and taking vacations.
For their part, Airbnb and Vrbo officials declined multiple requests from the Herald to comment or provide information for this story.
Miami Beach doesn’t allow Airbnbs in most residential areas and used to have some of the heaviest fines in the country for illegal Airbnbs, with perpetrators facing fines between $20,000 and $100,000. The city sharply reduced those fines after Airbnb sued in 2018.
Johnson’s discovery aligns with some national studies, said Tingyu Zhou, dean of associate professor Gatzlaff of Florida State University’s real estate department. Zhou said policymakers can intervene by levying taxes on those who rent their homes for less than a year.
The rate of increase in rents is should slow down in Miami-Dade County. This is good news for tenants living in the “most competitive” rental market in the country in 2022, according to a recent RentCafe survey. Yet house rents are unaffordable for many South Florida households without becoming cost-burdened, meaning they are forced to spend more than a third of their monthly income on housing.
During the ongoing pandemic that began in March 2020, rents are rising in Miami-Dade expelled many essential workers who could no longer afford to live here. Miami-Dade County responded last spring by declaring a emergency state due to housing, and county mayor Daniella Levine Cava led county officials to allocate tens of millions of dollars to rental assistance for the most needy households.
Local policymakers, real estate experts, and developers continue to discuss potential long-term solutions for Miami-Dade’s housing affordability crisis. Totally agree more supply is needed in the community, especially affordable housing and workforce housing.