Jayden D'Onofrio - Teen Aspect - June 15th, 2022
Recent trends in the sunshine state have left legislators scrambling for solutions to the most recent crisis: intense lack of housing affordability for renters and homeowners. Between a tumultuous rise in population, stagnant individual income levels, and a lack of necessary home production, citizens all across the state of Florida are feeling the effects of such a widening burden. If Florida lawmakers are to secure the future of thousands of families, action is needed now to ensure average Floridians still possess the ability to rent or purchase their own homes at stable rates.
In recent years, Florida has consistently been criticized for being one of the most expensive places to live, with even a Harvard study outlining “South Florida’s rental affordability is the worst in the nation.”[i] Prices for rental properties and houses have surged while the average wage growth per Floridian county has overall faltered compared to the national average. For example, according to the Bureau of Labor Statistics, every single one of Florida’s 67 counties reported average weekly salaries lower than the national average of $1,251[ii]. Therefore, middle- and lower-income Floridian’s are fighting intense housing costs with less capital than usually available to the average American. Despite such economic stumbles, Florida’s population is absolutely exploding and is a leading cause to the current housing crisis that is proving catastrophic to so many families. Between July 2020 and July 2021, Florida ranked second among all of the nation’s 50 states for overall population growth with over 211,000 people migrating to the state[iii].
How has immense population growth exacerbated the Floridian housing crisis?
Well, with so many new families arriving in the sunshine state, apartments and houses are being rented or bought at extreme rates. Continuous purchases of properties leave less homes to be available to the market, further driving up the prices of similar transactions for the next family. The supply of homes in Florida is simply not outpacing the demand, a vital measure to maintain economic stability for any state. The National Low Income Housing Coalition reports Florida has a shortage of over 410,000 affordable rental homes for extremely low-income renters[iv]. For context, 21% of all renter households are considered to be extremely low income[v]. Having over a fifth of the state’s renters be considered as extremely low income is simply not sustainable for any state government, especially when considering the acute shortage of housing there is. The base of extremely low-income renters in Florida is nearly 29% seniors and a further 15% being disabled citizens. Inaction of Florida’s elected officials in confronting the affordability crisis is neglecting society’s most vulnerable, a testament to the lack of care many politicians operate with in a widely Republican ruled state[vi]. To confront such a crisis, Florida’s government must find ways to encourage housing construction across the state.
Unfortunately, Florida’s leading progressive politicians are trying to approach the problem with the implementation of rent control laws, an idea that would prove to be disastrous and outright contradictory to the necessity of producing more housing units.
Being a progressive myself, it is rather rare for me to divide from typical progressive ideology in the field of economics. Rent control laws are some of the worst legislative reforms a legislature can put forth due to a multitude of reasons. First, any sort of rent control legislation would discourage developers to construct more housing due to less available profit. Thus, such a law would only further perpetuate the very root of the problem currently plaguing families all across the sunshine state. The basic but important theory of supply and demand illustrates rent control causes housing shortages and eventually even leads to an increase in demand for homes. With prices so low due to the enactment of rent control, people are willing to rent more properties than they would have otherwise. The demand of any product, or in this case, property, often varies on multiple factors, with quality being the chief element in most scenarios. In this context, however, demand for housing would increase in parallel to how low the new prices of properties are thanks to the rent control. People would purchase the price-controlled housing units more generously than usual due to the artificially lowered costs, thus causing other people to confront the reality that less property is available to them than previously. For example, people that would not normally be owning their own apartments may feel encouraged to do so, such as elderly people living with their relatives, young adults still residing with their parents, or even roommates who can now each procure their own residence. In addition, housing conditions tend to decay over time as landlords lack the necessary funds to continue vital maintenance on the property. Consequently, not only are shortages compounded, but the very living conditions of families would depreciate quite rapidly. The world of economics often relies on a series of wide-reaching consequences that need to be taken into account by anyone designing laws, a direct oversight by so many of our elected representatives, whether it be deliberately or otherwise. Targeted towards lower-income communities, rent control policies is quite possibly the worst welfare proposition to ever be put forth and does the complete opposite of what it sets out to do.
With rent control clearly having demonstrative issues, what are the steps the Florida legislature can take to confront the housing crisis?
As mentioned before, the number of houses is severely undercutting the total population of Florida, meaning the government must find any way possible to promote construction of houses. A variety of ideas can be implemented to complete such a measure including tax incentives for private home construction companies, direct government investment, or even pressure on local governments to buy land and stress companies to construct houses at a more affordable rate. Each course of action and its results varies on how aggressive the Florida legislature or local governments would plan to execute them. Unfortunately, little data exists to show how the aforementioned acts would influence the critical Florida housing market. However, it is known that it would place pressure on private companies to construct more homes, for better or for worse, unlike the horrible consequences of rent control policies.
The most recent housing crisis in Florida is dreadful for many but none more than our most vulnerable citizens. Action has been necessary for years, yet nothing has been carried out by the state’s highest leaders. Whether it be lack of care, faulty decision making, or just an outright misunderstanding of what to do, the Florida legislature must forego their previous inactivity to better the lives of their constituents, but not by implementing any sort of rent control.
[i] Owers, P. (2018, June 4). South Florida's rental affordability crisis worst in the nation, Harvard report finds. Sun Sentinel. Retrieved June 15, 2022, from https://www.sun-sentinel.com/real-estate/fl-bz-harvard-housing-report-20170615-story.html [ii] U.S. Bureau of Labor Statistics. (2022, March 23). County employment and wages in Florida - third quarter 2021 : Southeast Information Office. U.S. Bureau of Labor Statistics. Retrieved June 15, 2022, from https://www.bls.gov/regions/southeast/news-release/countyemploymentandwages_florida.htm#:~:text=Average%20weekly%20wages%20in%20all,to%20%24838%20in%20Osceola%20County. [iii] Algar, S. (2022, March 28). New Census data shows population is booming in Florida. New York Post. Retrieved June 15, 2022, from https://nypost.com/2022/03/28/new-census-data-shows-population-is-booming-in-florida/ [iv]Florida. National Low Income Housing Coalition. (n.d.). Retrieved June 15, 2022, from https://nlihc.org/housing-needs-by-state/florida [v]Florida. National Low Income Housing Coalition. (n.d.). Retrieved June 15, 2022, from https://nlihc.org/housing-needs-by-state/florida [vi]Florida. National Low Income Housing Coalition. (n.d.). Retrieved June 15, 2022, from https://nlihc.org/housing-needs-by-state/florida