More than half of all new apartments built in Miami are specifically for short-term rentals as residents struggle to find long-term affordable housing, a new report shows.
As large numbers of new residents arrive in the Sunshine State, many are struggling to find affordable housing as the state’s apartment market is in the doldrums.
Real estate company ISG World reported that 31 pre-construction condominiums in the Miami area are ready to be converted into Airbnbs. Business insider.
A total of 10,335 apartments are in the pre-construction phase in Miami-Dade County and nearby Broward County – and more than 50 percent of the total number of apartments will be short-term rentals, according to the company’s first quarter report.
Miami has long been heralded as a top party and beach holiday destination in the US – with its warm weather, luxurious restaurants and thriving nightlife.
Real estate firm ISG World reported that a total of 10,335 apartments in the pre-construction phase in Miami-Dade County and nearby Broward County will be short-term rentals
The Florida city has also become known as a playground for the rich and famous – from billionaires mooring their yachts along the coast, to A-listers flocking to Miami for the see-and-be-seen social calendar, including Art Basel each year in December.
“We’ve had a development industry adding more short-term rentals to the inventory in South Florida, and that’s not what we need,” said Craig Studnicky, CEO of ISG World.
Studnicky suggested that developers should focus on building traditional rental properties to meet market demands.
Condo sales fell in most major Florida markets in January despite falling prices, according to data from brokerage firm Redfin.
Statewide, condo sales fell 6.8 percent in January from a year ago, while pending sales fell 3.5 percent from the year before.
In Miami, for example, condo prices fell 3 percent in January from a year ago, sales fell 9 percent and new listings rose 27 percent, according to Redfin.
Experts say the rising cost of insurance in Florida, along with rising monthly condo fees, is reducing buyer demand by making it more expensive to own condos.
According to the Insurance Information Institute, homeowners insurance in Florida has increased 102 percent in the past three years and costs three times more than the national average.
Last year, the average cost of home insurance in the Sunshine State was about $6,000, the highest average premium in the U.S., according to figures from the group reported by WTVT-TV.
Miami is proving to be unaffordable and there is currently a $1.5 billion shortfall to provide adequate, affordable housing for all of Miami-Dade County, according to a study by the nonprofit Miami homes for everyone.
Experts say rising insurance costs in Florida, along with rising monthly condo fees, are reducing buyer demand for condos. Pictured: A $259-per-night Airbnb apartment in Miami
Miami residents have complained about rowdy partygoers staying in short-term rentals. Pictured: A $364-per-night Airbnb apartment in Miami
The county lacks more than 90,000 affordable housing units for renters making less than $75,000 a year, the study found.
In addition to meeting demand for traditional rentals, other residents have complained about rowdy partygoers staying in short-term rentals.
Current condo Airbnbs in Miami have a going rate between $100 per night and almost $400.
Miami Beach police have been cracking down on spring breakers this year, implementing bag checks, limited beach access, DUI checkpoints, license plate readers, liquor stores closing at 8 p.m. and increased enforcement of public drinking, drug possession and violent behavior .
During last year’s spring break, a state of emergency was declared when two people were shot dead. About 105 firearms were seized and 488 arrests made by officials.