Inflation hits Tampa Bay renters especially hard

Anyone who has tried to rent an apartment or purchase a home will tell you: housing prices in Florida, and the Tampa Bay area in particular, have escalated dramatically.

The average monthly rent in Tampa climbed 33 percent over the past year, with the median cost of a one-bedroom apartment now over $1,500. According to a recent report from Florida Realtors, the median sale price of a single-family home in Florida was up 21 percent compared to this time last year. Potential homebuyers face numerous obstacles: pending inventory down 17 percent compared to last year, all cash offers from investors, and increasing interest and home insurance rates (30-year home loans are hovering close to 5 percent, compared to 3 percent a year ago). Furthermore, home insurance costs are skyrocketing, with the average insurance cost in Florida $1,300 more than the national average on a $300,000 home.

Of course, increased housing costs are part of a larger inflationary picture. According to the U.S. Bureau of Labor statistics, inflation has reached a 40-year high, with no sign of slowing down.

In a recent survey, we asked Floridians how inflation and the competitive housing market is affecting their daily lives. The responses suggest that the increased costs of goods and services and a lack of affordable housing have caused many Floridians financial distress, but housing-related concerns affect some groups disproportionately.

The survey — conducted between March 31 and April 12 at the University of South Florida — queried a representative sample of 600 Floridians. Nearly half our respondents (48 percent) agree that inflation has impacted their ability to pay essential bills. Furthermore, our responses emphasized the sticker shock experienced by many Floridians at the grocery store, with 77 percent of respondents saying that inflation has impacted their grocery spending. As roughly three-fourths of respondents (74 percent) reported stagnant or decreasing income over the past year, 80 percent of those asked have reduced their discretionary spending and 65 percent have altered travel plans.

Housing cost pressures affect a significant minority. Twenty-four percent say that they have had a hard time keeping up with their rent and mortgage payments last year, with one in three Floridians (35 percent) noting that their current household income does not support the cost of renting or buying in Florida. As households can’t easily cut down on their housing costs during difficult times, seeing one-third of our neighbors struggling to pay for housing is alarming.

Among those currently renting, 36 percent have put off buying a home due to the competitive market. Those remaining as renters are at the mercy of the hot rental market, as there are no laws in Florida that cap rent increases.

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The increased cost of rent and mortgage payments are especially affecting minority groups, with 48 percent of Black respondents saying that their current household income does not support the cost of renting or buying a home in Florida. Younger generations are also being affected, with 57 percent of respondents ages 18-24 and 45 percent of respondents ages 25-44 also experiencing that housing squeeze. This makes sense: those who owned a home coming into the pandemic are far less likely to experience housing stress now, whereas those who are renting or trying to buy their first home are fully confronting today’s strong inflationary pressures. And data show that older households and white households are the most likely to own a home.

Despite record inflation and the competitive housing market, the population in Florida is continuing to grow. The recent census data reported that Florida gained over 200,000 new residents over the past year. Finding ways to stimulate new housing construction for Floridians of all incomes will be the only way to avoid further stress on our residents.

Christina Stevens is Associate Director of Development for the University of South Florida Libraries, and a recent USF MPA graduate. Elizabeth Strom is Associate Professor in the USF School of Public Affairs, and co-leader of the Florida chapter of the Scholars Strategy Network.