If beautiful beaches, upward mobility, cultural diversity and warm winters matter to you, then life in “Magic City” may be just what you’re looking for. However, the price for this privilege can be quite expensive. On average, Miami renters spend $1729/month.
This, of course, varies by neighborhood. Overtown is reporting one of the lowest average monthly rents at $1000/month. West Flagler saw higher average rents of $2407/month. Although this might look a lot better than the average rent in Boston, New York, or San Francisco, it is still a few hundred over the national average of $1,465/month. So many South Floridians are facing a growing affordability crisis.
See below for a few reasons why rent prices in South Florida are skyrocketing. Also why some Floridians are struggling to keep up.
MIAMI IS A MAJOR TOURISM HUB
Undoubtedly, Miami is a top vacation choice for tourists from the United States and abroad. With its sunny beaches and internationally renowned nightlife and food, Miami has seen continuous growth in tourism over the past decade. However, this booming tourism industry helps to fuel the affordability crisis. Many tourism jobs that employ local Floridians are not full-time and do not provide enough income to allow residents to spend only 30% on their monthly housing.
On top of that, Miami’s expanding tourism industry escalates the prices on everything from food to amenities, and even housing. Miami-Dade county’s median income is a staggeringly low $44,000 compared to the $80,000 median income in a comparably expensive city such as Seattle. That means Miamians wind up spending a higher percentage of their incomes on rent than residents of any other city in America.
TWO CITIES IN ONE
Many consider Miami to be like two cities in one. Divided into the ultra-rich tourists, snowbirds, and celebrities of South Beach, and, on the mainland, Floridians of more modest means. For real estate, however, Miami is of course not two cities and price hikes on exclusive apartments impact real estate across the board for all residents. The higher prices put on the rentals for New Yorkers looking for tax havens or celebrities hoping for beachside views escalates the costs of all buildings.
TOO MANY LUXURY CONDO BUILDINGS
The city has grown over the past decade thanks to a huge influx of international immigrants. But they, along with established middle-class Miamians, have found themselves quickly priced out of the real estate market. That is because developers have become increasingly incentivized to build luxury condos for the global 1 percent to stash away as “investments”. However, these luxurious high-rise condos sit largely uninhabited and take up valuable land. They could be used to produce affordable housing that is accessible to more residents. Even the city itself admitted it has failed to create affordable homes for the working class over the past decade.
INCREASED DEMAND
Miami is one of the fastest growing major cities in the U.S.. It has an easy access to North America, Latin America, Europe, and the rest of the world via the Miami International Airport. Anyone who has been to Miami in the last five years has seen the rapid pace of growth. According to the U.S. Census, Downtown Miami’s population has doubled over the last 8 years, and will continue to grow to approx. 110,000 residents by 2021 (up from 40,000 in 2000). This rapid influx in population has in turn increased demand for affordable housing. Home prices continue to rise with this increased demand, which escalates rental prices even further.
What can be done?
One way is sitting patiently and waiting for building developers to create affordable housing.
Here are few things home-searchers can do about the affordability crisis.
BECOME A “SUPER-COMMUTER”
Although no one likes sitting in traffic for hours, it may be worth considering if it means having more disposable income and affordable housing. Many South Floridians are opting to become “super-commuters”. Which means choosing to travel more than 90 minutes each way to their day jobs. That is in exchange for a higher paycheck and less expensive rents outside the metropolitan area of Miami, Fort Lauderdale, and West Palm Beach.
HIRE AN EXPERT REAL ESTATE AGENT
Real estate agents can offer valuable area expertise to help find their clients an affordable apartment. An agent with strong knowledge of the rental market in various areas can be a huge asset for your Miami apartment search. They’ll save you time searching listings and setting viewing appointments. They may also know of more affordable listings before they hit the market, which could save you money.
