The rent is going up on Susan Tolksdorf’s two-bedroom townhouse in Lake Mary.
And the place is getting more cramped with her husband and two little girls sharing space. They hope to find a three-bedroom place soon, but Tolksdorf said they are already stretched financially.
When she moved to Central Florida in 2007, she rented a two bedroom unit for $700. Today, the same unit goes for about $1,400, she said.
“It takes a toll on our health to have to worry about how we are going to survive,” said Tolksdorf, who works as a receptionist and has a second job in retail. “We're better off I’m sure than most, but it's challenging.”
Central Florida rental rates have grown at about twice the national average during the past five years, according to newly released data from Apartment List’s Rentonomics.
As of April, it cost $1,280 to rent a two-bedroom home or apartment in Orlando, compared with $1,003 in January 2014.
At today’s pricing, a two-bedroom home or apartment is considered unaffordable to about 55 percent of the region’s households that would have to spend more than 30 percent of their income on rent, said Chris Salviati, a housing economist with Apartment List. In Central Florida, about 40 percent of all homes are rentals, higher than the national average of 36 percent.
The rents are even higher in the suburbs. A two-bedroom apartment in Lake Mary on average costs $1,600 a month. A two-bedroom place in Oviedo is $1,540, and Ocoee/Winter Garden is $1,460.
That’s tough for people like Tolksdorf, who loves her quiet neighborhood and the elementary school her two daughters attend. But buying a place doesn’t seem possible for her, either.
“To buy a home here that's in a safe neighborhood starts at $300,000,” she said. “We don't want to be house poor, either.”
Apartment builders say they are trying furiously to keep apartment prices lower by building more units, but they are struggling to keep up with the region’s growing population. The region’s population grew by 60,045 people last year, according to the U.S. Census Bureau.
“It’s a matter of supply and demand,” said Chip Tatum, CEO of the Apartment Association of Greater Orlando. “We just can’t build quick enough to keep up with demand.”
Affordable, middle-class housing is on the minds of nearly every apartment builder, Tatum said. But costs to build are high, too. The region’s 2.9 percent unemployment rate means construction workers are hard to find and command higher wages when they can be found. Impact fees on new apartments are growing to keep up with needed roads and school construction, he said.
Tatum said apartment management companies are going to set prices where the market dictates. With occupancy rates for apartments in metro Orlando at 94 percent, that means rents will probably continue to rise.
“They blame apartment builders for the traffic and the schools, but it’s the employers that are adding jobs and bringing people here,” said Steve Ogier, president of an apartment developer Contravest Builders. “People don’t move here for houses, they do it for jobs.”
Developers did start work on a record number of homes and apartments in 2018, according to U.S. Census Bureau data. Nearly 13,000 apartments and 16,000 homes were started in 2018.
But Ogier said apartment builders still can’t keep up, whether because of rising costs or hurdles building in high-demand communities. Cities such as Winter Springs and Clermont have put a hold on the construction of new apartment complexes after pressure from residents. Others have raised the fees to build, he said.
“Whenever you limit the supply of something, prices are going to go up,” Ogier said. “That’s how capitalism works.”
But apartment living is going to be needed with large populations of retiring baby boomers and working millennials, said Ed Kobel, CEO of Tampa-base DeBartolo Development. His company is working on five new apartment projects in the area.
“We think Orlando is one of the better markets in the U.S. because of a lot of job growth,” Kobel said.
But he said metro Orlando’s lower than average household income also means renters are price sensitive. The sweet spot for builders, he said, are apartments aimed at middle-class renters.
“There are a lot of fabulous apartments in downtown Orlando, but not everyone can afford that,” he said.
Source:
https://www.apartmentlist.com/fl/orlando#rent-report
