By Lydia Nusbaum
July 22, 2022 Updated 5:40 P.M. ET
FLORIDA (FLV) – The droves of people moving to Florida are largely contributing to the high rent and housing costs the state faces.
Florida’s rent prices have skyrocketed and Dr. Shelton Weeks, a Lucas Professor of Real Estate at Florida Gulf Coast University, said inflation and migration play a large role.
“The way that we handled COVID in Florida I think sent a signal to the rest of the country that many people saw as very favorable, whereas, some other states in areas maybe handled things very different,” Shelton explained. “And folks vote with their feet.”
While it’s tough to say which factor plays a larger role in the price increases, Weeks believes the way states handled policies during the pandemic sparked an influx of people to move to the sunshine state.
“We have a lot of people that have moved to Florida that have a lot of money to spend,” Weeks said. “So they will then come here and consume a lot of things that contributes to the inflationary environment.”
States like California and New York implemented long-lasting business lockdowns during the coronavirus pandemic. New York City carried out vaccine mandates for those entering businesses. Florida briefly locked down businesses during the pandemic, but Gov. Ron DeSantis reversed course and vowed not to implement statewide mask or vaccine mandates.
“The governor’s successful policies in the State of Florida have attracted new residents from across the country, making property in Florida increasingly valuable. This positive externality of successful state government will naturally come with new challenges, like increasing rent costs,” said Governor DeSantis Press Secretary Christina Pushaw.
In 2020, the migration from high tax states to low tax states surged during pandemic lockdowns. Below is the breakdown of the migration of taxpayers and aggregate adjusted gross income between states in 2020:
|Biggest Winners||Biggest Losers|
|Florida: $23.7 billion||New York: -$19.5 billion|
|Texas: $6.3 billion||California: -$17.8 billion|
|Arizona: $4.8 billion||Illinois: -$8.5 billion|
“It’s crazy to say but California has come to Florida just because we’re just a better place to live and raise a family because we let you keep your money,” said Florida Chief Financial Officer Jimmy Patronis.
Florida’s business-friendly, low-tax environment also created a strong incentive for people to move to Florida. For example, Miami locals are specifically facing extraordinarily high rental prices as New Yorkers flock there to flee high taxes.
“We’re getting pushed out by these people who aren’t native Miamians,” one Miami local said. “It’s happening with everyone I know that’s renting.”
Patronis said New York lawyers, who are paid more than those in Florida, moved to Miami and worked remotely while their state was locked down.
“But they also came to understand how much cheaper the cost of business was in Florida accustomed to what they’re doing in New York,” Patronis said.
The average rent in Florida is $1,790 compared to the national average of $1,468. Democrats including candidate for governor and Agriculture Commissioner Nikki Fried said during a gubernatorial debate that price gouging is the reason for high rates.
“On day one I’m declaring a housing emergency because that’s exactly what it is,” Fried said. “That way it gives me the opportunity to allow our state attorneys, our attorney general, to start going after our predatory landlords.”
But Weeks does not view it the same way and said the market is dictating the high rental rates.
“When you look at the changes in rents, if the market cannot support the rental rates, we would see occupancy dropping dramatically in the face of these sorts of rental increases,” Weeks said. “We’ve not seen that.”
With 900 people moving to Florida every day, there are not enough rental and for-sale houses to meet the demand. Weeks said it takes a long time to add capacity in real estate.
“You get these price swings when there’s a surge in demand. If you can’t move the quantity in the short run, the only thing that can adjust is the price,” he said.
Florida Democrats Friday sent out an email blaming Governor DeSantis for the rising rents. They urged DeSantis to declare a housing state of emergency.
“No real solutions have been prioritized by the GOP-controlled Legislature to date, and Governor DeSantis has continued to side-step the issue,” Florida House Democrats said in an email.
Democrats said the state government has “stolen” more than $2.3 billion from the state affordable housing trust fund since 2001.
“He doesn’t have a solution to the housing crisis and instead chooses to fight over nonexistent problems. This is shameful– Floridians deserve better than this. They deserve to know that if they work hard, they can afford a roof over their heads, no matter who they are or where they live. Governor, do better,” Democrat State Rep. Angie Nixon said.
The DeSantis Administration believes a “state of emergency” to address affordable housing is not the role the government should play.
“Increasing government intervention into markets cannot solve complex problems like this – in fact, it tends to make those problems worse,” Pushaw said.
“This is apparent in all Democrat-run cities that have experimented with rent controls: NYC, Los Angeles, DC, and San Francisco to name a few. All of these cities have housing crises, serious challenges with homelessness, and cost of living higher than those in Florida cities.”
The Administration instead believes the federal government’s printing of money to worsen inflation and the CDC’s 2020-2021 eviction moratorium. The governor believes building more houses is the best way to stabilize the rental market without adverse consequences.
Pushaw said Governor DeSantis has consistently recommended full funding for Florida’s affordable housing programs since taking office. Over the last four years, DeSantis has recommended over $1.5 billion for affordable housing funding, and secured over $1 billion for affordable housing funding.
“This is roughly the same amount of funds appropriated for affordable housing over the preceding eight fiscal years combined, and nearly 40% higher than was appropriated in the four fiscal years preceding that,” Pushaw said.
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