A Florida Atlantic University (FAU) researcher said this week that believes an abundance of short-term vacation rentals and oppressive restrictions from homeowner and condominium 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 Dr. Ken Johnson, an economist in FAU’s College of Business. Meanwhile, many HOAs across the state limit owners from renting their units during the first year or ban renting altogether.
“Both of these take away units that could be rented to the public, and it’s the shortage of available units that drives rental rates higher,” Johnson said. “While developers and local governments clearly need to build more units, that’s not the only solution to this problem.”
Rising rents are easing in much of the country, but Florida is still home to nine of the 21 most overpriced markets in the U.S., according to the latest figures from the Waller, Weeks and Johnson Rental Index. The monthly report shows the premiums current renters are paying based on a history of rents back to 2014.
For instance, Cape Coral-Fort Myers renters lead the nation in paying 18.05 percent above the long-term leasing trend. Miami; North Port; Tampa; Orlando; Deltona-Daytona Beach; Palm Bay-Melbourne; Jacksonville; and Lakeland also have some of the nation’s highest premiums.
The average rental premium paid in the U.S. is 7.40 percent.
“As a state, we need to realize that the current rental crisis is hurting our economic growth potential and making it increasingly difficult for service workers to live within reasonable distances of their jobs,” Johnson said.
Given steep rental increases in the past two years, owners of short-term rentals may find greater returns in converting their properties to long-term rentals, according to Johnson. He added that HOA boards choosing to relax or eliminate rental restrictions will increase property values for their residents.
“In both cases, there are incentives for owners and HOA boards to change what they’re doing, and at the same time, they would be helping to ease the rental problem in Florida,” Johnson said. “Markets will work in time, and we will slowly build enough units to ease this crisis. But there also can be relief in the interim.”
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