Too many vacation homes driving up Florida rents
- Too many vacation rentals and strict homeowners associations drive up housing costs, study finds.
- Renters in some areas of the state pay up to 18% premium for their apartment.
- A Florida Atlantic University economist said the problems could stifle Florida’s economic growth.
Florida’s rental market is causing so much pain for ordinary workers that it could stifle the state’s economic growth. This is at least the conclusion of a new study by Ken Johnson, an economist at Florida Atlantic University’s College of Business.
According to Johnson, there are too many vacation rentals in the Sunshine State. These short-term rentals – often listed on sites like Airbnb and Vrbo – remove apartments and houses that might otherwise be occupied by workers who must live close to their jobs.
Additionally, Johnson describes the regulations of some landlords and condo associations as “oppressive” because they limit when landlords can start renting their units, which only worsens tenants’ wallets.
It’s this particular combination of strict HOA rules and the large number of vacation rentals is a mix that negatively affects housing affordability, he said.
“These two take-out units could be rented to the public, and it is the shortage of available units that is driving up rental rates,” Johnson wrote in the study.
Florida has become a hot destination for many during the pandemic, as remote workers detached from their desks and had the freedom to choose to live in warmer places. In total, the state’s population grew by 1.9% between June 2021 and June 2022, the most of any state for this period, census data shows.
The large number of people moving to Florida is just one of the reasons why statewide rent increases outpaced the national average for three years. According to Johnson’s study, Florida is now home to 9 of the 21 most expensive rental markets in the United States.
For example, Johnson estimates that renters in the Cape Coral-Fort Myers area are paying an 18% premium for their homes over long-term trends, according to FAU’s Waller, Weeks and Johnson Rental Index. The index is weighted to capture historical trends in rents in a given area rather than calculating average rents for currently available homes.
Currently, the average rent in Cape Coral is over $2,200 per month, while the Waller, Weeks, and Johnson Rental Index estimates a fair market value to be closer to $1,880 per month.
The number of vacation rentals in the state only makes it harder for people to find affordable places to rent, according to the study. For example, Panama City Beach, a popular coastal vacation community, has over 11,800 vacation rentals listed on Airbnb and Vrbo at an average cost of $265 per night, AirDNA data is displayed. This compares to the city’s total housing stock of nearly 17,000 units, as counted by Point2Homes.
“In Florida, U.S. Census data indicates that the share of homes used as vacation rentals has remained constant since 2010, and yet the cost of housing is rising everywhere, for everyone because the country simply has no not build enough homes,” an Airbnb spokesperson said. told Insider via email. “The need to prioritize the construction of new housing is an issue in communities large and small across the country, and Airbnb is committed to working with local authorities on efforts to support housing solutions and l vacation rental industry in Florida that continues to provide Economic opportunity throughout the Sunshine State.”
However, in many cases, it is more lucrative for landlords to list their properties on short-term rental websites like Airbnb and Vrbo instead of renting their house or apartment to a regular long-term tenant, which is one of the reasons why there are so many. of such units in the state, Johnson said in the report.
Meanwhile, Point2Homes data shows apartment rents in Panama City Beach have increased 5.6% over the past 12 months to more than $1,830 per month. Single-family homes also rent for nearly $2,800 per month.
Editor’s Note, January 12, 2022: This story has been updated to indicate AirDNA’s 11,800+ Panama City Beach vacation rentals include listings from Airbnb and Vrbo.
Editor’s note, January 13, 2022: This story has been updated to include comment from an Airbnb spokesperson.
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