Despite a decline in rents over the past year, Miami still rates as the most unaffordable city in the U.S., according to a report released Thursday by Trulia, an online resident real estate site. And the situation has worsened in the past year.
At a median rent of $1,950, only 6.9 percent of the Miami metro area’s rental properties are considered “affordable” in relationship to income. That’s a drop from 8.8 percent in April of 2015, when Trulia conducted its previous study.
That’s significantly worse than in New York and San Francisco, where wages are higher. In New York, 19.6 percent can afford the median rent of $2,354; in the Bay City, 22.2 percent can afford the median rent of $3,500.
Miami-Dade Commission Chair Jean Monestine and other members of the commission are working on programs to combat the high cost of living.
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“We have to view housing as a commodity that is integrated into our economic development strategy,” said Commissioner Danielle Levine Cava. “We can’t really think that the market will take care of it on its own. It’s important that we’re aggressive in finding ways to ensure affordable housing is available so that we can grow our economy.”
Last year, the commission voted to amend the Affordable Housing Trust Fund to set aside 50 percent specifically for very low- and extremely low-income individuals and families. The fund provides financial resources to facilitate the building of affordable housing for low- to moderate-income households.
But, said Cava, “the Affordable Housing Trust Fund is only as good as how much we choose to fund it. We just need to bite the bullet and put a significant amount of money into the fund.”
For millennials, renting is more expensive than buying, according to Trulia study released in 2015. But housing stock in affordable price points remains extreme tight. A similar study conducted by Zillow for Bloomberg listed Miami as the most unattractive rental market for millennials.
According to Dr. Edward Murray, an expert housing market issues in South Florida at Florida International University, many millennials are looking to suburbs like South Kendall, Homestead and Miramar for affordable housing.
“The job centers are largely in the downtown central business district, which is where all of the high-end luxury housing is being built. There isn’t even a supply there to begin with, which means that young professionals are having to live further out,” Murray said.
But it’s not a sustainable solution, Murray said.
“Once you hit a certain level of cost-burden relative to housing cost, at around 50 percent, that’s when you say ‘enough is enough,’” Murray said. “You move on to another part of the country.”
According to Murray, approximately 35 percent of all Miami renters have already exceeded the 50 percent-threshold.
“Millennials are very conscious of cost, even more so than their parents. When they look at housing, they absolutely look at price points. They know what they are able to afford,” Murray said.
Overall, the Trulia study found that rents in the 25 metro areas with the largest rental markets have declined 1.6 percent compared to last year. Across the board, however, rents are high relative to historical pricing.