TAMPA, Fla. — We all know rent prices have been soaring in the Tampa Bay area, but a new study says there are a couple of other key reasons why our region, in particular, has seen rent costs go up even faster.
The research from Florida Atlantic University finds that Florida has nine of the 21 most overpriced rental markets in the U.S. And that includes the Tampa Bay region.
“Unfortunately, this is a race that Florida cities are winning that we don’t want to win that," FAU Real Estate Economist Ken Johnson said.
Johnson said they found rent prices are being pushed higher here - not just by inflation like the rest of the country has seen - but by the proliferation of what used to be longer-term lease property being used as short-term vacation rentals. Also, condo association rules restrict newer owners from renting out their property – or prohibiting it completely.
“They’re constraining the inventory, or if you will, the supply of units,” Johnson said. “And therefore, helping drive up the price of the average rental unit in Florida.”
Add to that, more would-be buyers looking for rentals are now on the sideline hoping prices and interest rates come down.
“At the end of the day, they have to have something. So, that’s the next opportunity if they can’t find something to buy,” Tampa-area real estate broker Cristan Fadal said.
FAU hopes the results of its study will shed some light on the reasons behind the upward price push and maybe help direct public policy to address the issue by letting politicians, landlords and condo associations know there are helpful solutions.
“These things will solve themselves in time, but perhaps we can be proactive in using good, as business sense, and we can go ahead and get a head start on this,” Johnson said.
Cape Coral took the top spot across the country with an 18 percent premium over what should be the average rent for that region.
Below are other cities in Florida that the study found to have some of the country's highest premiums.
- North Port
- Deltona-Daytona Beach
- Palm Bay-Melbourne
To view the study from FAU, click here.