You’ve probably read numerous articles by now about the skyrocketing purchase prices for homes throughout The Sunshine State. However, we are also seeing an increased demand for rentals throughout the state as more and more Americans look to move to paradise. Needless to say, this increased demand is also sending already high rent prices even higher.
Low-income earners hit the hardest
Recently, the National Low Income Housing Coalition released its Out of Reach report. In this report, the National Low Income Housing Coalition determined that a full-time hourly worker would need to earn $24.90 an hour, more than three times the $7.25 federal minimum wage, in order to afford a $1,295/month rental home. The $1,295/month figure is the average “fair market rent” in the U.S., according to the U.S. Department of Housing and Urban Development.
With housing costs becoming unhinged from wages, this has proven to be a significant challenge for many. Jobs such as retail, hospitality, customer service, and in some early career teaching, pre-school and childcare are just some examples where rental housing challenges are arising. This is leading to many of these renters finding roommates to decrease the financial burden.
Minimum wage in Florida
Florida is actually one of the worst states when it comes to the ratio between wages and rental prices. Currently, the state’s minimum wage is $8.56/hour, which is equivalent to $17,804/year. With the passing of Amendment 2 last November, Florida’s minimum wage will go up to $10.00/hour in September. Currently, the fair market rent for a 2 bedroom unit in The Sunshine State is $1,290/month. In order to afford this, you would need to earn $24.82/hour, which is equivalent to $51,619/year. Therefore, a minimum wage worker would need to work 115 hours/week in order to afford this.
Affordable housing is often defined as the most a person can afford to pay without spending more than 30% of their income. A recent study found that 1.4 million renter households spend at least 30% of their yearly income on rent, and of those, 938,957 pay even more. With construction and labor costs soaring as well, it is extremely challenging for builders to help fill this void with new construction units. An area that may help fill this void is the conversion of empty commercial space into residential housing. Either way, this market is proving to be quite challenging for many renters and current inflationary pressures are also contributing to these obstacles.
Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. At Live South Florida Realty, Inc., we have been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!