A recent academic report reveals that South Florida is one of the 11 regions across the United States where an individual requires an income exceeding $100,000 to comfortably afford housing, without succumbing to the pressures of being “rent burdened.”
The study was conducted by Florida Atlantic University, scrutinizing housing costs across the nation’s 100 most populous markets.
The study’s findings indicate that in the tri-county region of Palm Beach, Broward, and Miami-Dade, an income of at least $112,183 is necessary to maintain rental expenses within 30% of total household costs, a benchmark generally accepted as the threshold for affordability. This data positions this tri-county region as the only Floridian area in the nation’s top 10 most costly locations for renters, determined by income required to avoid the “rent burdened” classification. The research involved collaborators from Florida Gulf Coast University and The University of Alabama.
On a national level, the costliest region was identified as San Jose, California, requiring an income of $131,562, followed by New York at $129,173, and San Francisco at $124,873. South Florida secured the eighth position in the top 10. Additional Floridian cities, including Cape Coral, Tampa, and Orlando, also ranked among the top 20 most expensive areas, necessitating annual salaries of $92,904, $84,750, and $82,820 respectively, to avoid the state of being “rent burdened.”
Professor H. Shelton Weeks of Real Estate at FGCU underlined the study’s significance in assisting policymakers and employers better comprehend the current state of the housing market, highlighting that the research was the first collaborative investigation into the income required in each region to secure rental accommodation while ensuring sufficient finances for other necessities and savings.
The study, focusing on rental prices for the month of April, did not account for the prevailing median income for each region. For instance, in Palm Beach County, the 2021 median household income was reported as $68,874 by the U.S. Census Bureau. The U.S. Department of Housing and Urban Development and Florida Housing Finance Corporation placed it slightly higher at $90,300 in the previous year.
The study employed Zillow’s Observed Rental Index data, encompassing all rental types, revealing an average rent of $2,804 in South Florida in April. This marked a 5.2% increase from April 2022 and a $300 monthly increment from the figures that historical trends would predict. While the pandemic-induced double-digit increases in rent have decelerated, rent costs continue to rise and outpace some renters. According to FAU housing economist Ken H. Johnson, many individuals may have to resort to cohabitation or even scenarios reminiscent of the “Golden Girls” show, where senior citizens find themselves needing to cohabitate.
By FAU’s measure, a majority of renters in Palm Beach County are “rent burdened.” The county’s renters would need to earn more than $95,520 annually to overcome rent burden. For a one-bedroom apartment, the necessary salary would have to be $71,920. In contrast, half of renters’ household income countywide was less than $49,000 in 2021, according to the latest U.S. Census Bureau estimates.
According to Weeks and Johnson, the remedy to escalating rent prices lies in the construction of more housing units, a process that can span several years. This suggestion is especially pertinent in light of Florida’s significant population growth. Between 2021 and 2022, Florida’s population swelled by 1.9% to 22,244,823, making it the fastest-growing state in the country for the first time since 1957. Johnson concluded, emphasizing the ongoing reality of the long-term affordability crisis, despite the slowing increase of rent.