Kimberly MillerPalm Beach Post
South Florida is one of 11 areas nationwide where a renter needs to earn more than $100,000 to comfortably lease a home or apartment and avoid being “rent burdened,” according to a new university study that analyzed housing costs in the nation’s 100 largest markets.
The report, released by Florida Atlantic University, found that a salary of $112,183 or higher is needed in Palm Beach, Broward and Miami-Dade counties to keep rental costs to 30% or less of a household’s expenses, which is typically considered affordable.
That conclusion puts the tri-county area as the only Florida region in the top 10 most expensive places nationwide for renters based on the income needed to dodge the rent-burdened label, according to the study, which included researchers from Florida Gulf Coast University and The University of Alabama.
The most expensive area in the country was San Jose, Calif., which required a salary of $131,562, followed by New York ($129,173) and San Francisco ($124,873). South Florida ranked eighth in the top 10.
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Cape Coral, which requires an annual salary of $92,904 to not be rent burdened, Tampa ($84,750) and Orlando ($82,820) ranked in the top 20 most expensive areas based on salary, the study found.
Eye opener for politicians and employers
H. Shelton Weeks, Lucas professor of Real Estate at FGCU, said the study was the first the trio of universities conducted that looked at the amount of salary required in each region to rent and still have enough money for other expenses and savings.
“What we hope is that for people who are policymakers trying to guide things forward and for employers who are trying to recruit workers, this will help them understand the current situation a bit better,” Weeks said.
Wichita, Ks., was the least rent-burdened market with the average renter needing a salary of just below $40,000.
The study, which looks at rents for the month of April, does not include the current area median income for each region.
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In Palm Beach County, the U.S. Census Bureau calculated the area median household income as $68,874 in 2021. Last year, the U.S. Department of Housing and Urban Development and Florida Housing Finance Corporation said it was $90,300.
That’s much higher than the salary made by many of Realtor Michael Pilarte’s clients. And he said it’s not just being able to afford the rent, it’s the upfront costs.
“If you want a three-bedroom at $2,000 to $2,400 and then they want first, last and one month security, plus some landlords are asking for the income to be three times the rent,” Pilarte said. “That’s ridiculous.”
'Golden Girls,' but for real
The FAU study uses leasing data from Zillow’s Observed Rental Index and includes all rental types including homes and apartments.
Rents in South Florida in April averaged $2,804, according to the study. That’s a 5.2% increase over April 2022 and about $300 more per month than what it would be if historical trends were followed.
While rent hikes have slowed from the pandemic-induced double-digit gains experienced in 2021, they are still increasing for the most part and outpricing some renters. FAU housing economist Ken H. Johnson said the only option for many people may be to get roommates, including "Golden Girl"-type scenarios where senior citizens will be forced to move in together.
Debera Carney’s landlord recently decided to sell the condominium she has been living in for four years. The 72-year-old posted a note on Nextdoor about her predicament and was able to find a new place to rent at an increased price but one she can afford.
“I’m on a limited income but maybe I’ll get a little job or something,” Carney said.
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By the measure FAU used, the majority of renters in Palm Beach County are "rent burdened." The average monthly rent in Florida's third-most populous county is $2,388, recent listings on Craigslist show, with the cost at $1,798 for one-bedroom units.
The county's renters would need to earn more than $95,520 a year to be unburdened by rent. The salary would need to be $71,920 for a one-bedroom apartment.
Half of renters' household income countywide was less than $49,000 in 2021, the latestU.S. Census Bureau estimatesshow.
“I’m like a part-time psychiatrist,” said Susan Hoffman, a real estate agent with Reliance Real Estate Group focusing on downtown West Palm Beach. “It’s a standoff sometimes. The owners don’t want to come down and the tenants can’t afford to go up.”
Weeks, and Johnson, said the solution to high-priced rents is to build more homes and apartments, something that can take years to do, especially when Florida is experiencing a significant boost in residents.
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Florida's population grew by 1.9% to 22,244,823 between 2021 and 2022, making it the fastest growing state in the country for the first time since 1957.
“Rents have stopped going up by double digits, but it’s morphed into a long-term affordability crisis,” Johnson said. “People stopped talking about it as if it doesn’t exist anymore. Well, it does.”
Palm Beach Post staff writer Chris Persaud contributed to this story.
Kimberly Miller is a veteran journalist for The Palm Beach Post, part of the USA Today Network of Florida. She coversreal estate and how growth affects South Florida's environment. Subscribe to The Dirt for a weekly real estate roundup. If you have news tips, please send them to kmiller@pbpost.com.Help support our local journalism, subscribe today.
