State will need to add hundreds of thousands of new units to keep pace with demand, association survey finds
It might be somewhat hard to believe, given the tens of thousands of new multifamily rental units that have been constructed along the Gulf Coast in the past seven-plus years of this economic recovery cycle, but Florida is actually facing an apartment shortage.
So says the Florida Apartment Association (FAA), an Orlando-based trade group that says it represents three-quarters of all multifamily rental units in the state.
FAA contends the state will need to add another 600,000 new apartment dwellings over the next 11 years just to keep up with rising population levels and changing consumer tastes towards home ownership.
On average, Florida is gaining more than 900 new residents daily — a trend that has been fairly constant for much of the past three years.
Broken down, FAA says the Sunshine State would need to add inventory equal to nearly 48,000 rental units annually to keep pace with demand. By comparison, Florida is set to receive delivery on 33,688 new apartments this year.
But amid the expected shortage, apartment development costs are increasing as a result of materials and commodity increases, a shortage of skilled labor and heightened land costs, the association notes, making new projects more expensive to build.
That has, in turn, pushed rents upward for more than two consecutive years. Tampa rental rates are 2.3% ahead of the same time last year, while St. Petersburg rates are 4.6% higher and Clearwater’s are 3.3% above their level in September 2018, according to real estate research firm Yardi.