It was clear by the summer that Tampa Bay’s rent increases were shattering records. But as 2021 comes to a close, the verdict is that the price changes were stratospheric.
Rent prices in Tampa Bay increased by a record 24 percent in 2021, according to an analysis by CoStar Group, a commercial real estate data firm, which included Pinellas, Hillsborough, Pasco and Hernando counties. Tampa Bay had the highest rent spike in the nation for markets with at least 100,000 apartments, CoStar found.
To understand how troublesome this is for renters: The second-highest annual rent growth in the past two decades was 2015, which saw a 6.2 percent increase.
“This is a once-in-a-generation market that we’re in,” said Casey Babb, executive managing director at the Tampa office of Colliers International, a commercial real estate services company. The momentum began in 2010 as the Great Recession receded, he said, and has ramped up.
The spike is driven by demand, which is soaring in Tampa Bay thanks to a surge of new residents from out of state seeking a cheaper cost of living, warmer climate and fewer pandemic restrictions. At the same time, the supply of rental units has not caught up as the nation experiences a housing shortage affecting both the rental and home-buying markets.
“You have would-be homebuyers being priced out of the market” and remaining renters longer, said Erin Amon-Surlis, a CoStar Group senior market analyst based in Tampa. “It’s kind of a perfect storm of all those supply constraints... combined with strong demand.”
One indicator of that demand is the vacancy rate in apartment buildings, which is sitting at a record low in Tampa Bay at 4.4 percent. The average renter in Tampa Bay got a $315 monthly increase to their bill this year, Amon-Surlis said, though some neighborhoods saw hikes higher than that. Prices in West Tampa increased by 29 percent this year, according to CoStar.
The increases have been glaringly apparent to Aloha Kelm, who lives in a 55-plus mobile home park in Town ‘n’ Country. She said she’s been lucky to have a landlord who’s keeping the rent steady, since many of the residents live on fixed incomes.
After a friend moved away from her nearby apartment complex because it got too expensive, Kelm, 77, said she’s convinced her park is essentially the last place she can afford with her Social Security and monthly check from when she served school lunches. She plans to stay until she can move in with her son.
“A lot of people are moving in and sharing expenses with each other because the rents in all these darn places are just unreal,” Kelm said.
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Because of the increases in rent, apartment complex buyers are outnumbering sellers “20-plus to one” to try to get in on the lucrative opportunity of being a Tampa Bay landlord, said Shawn Rupp, a managing director at Colliers International. Many don’t expect the historic pace of 2021 to continue next year but are banking on large increases being the norm.
“We go on meetings every single week and the word ‘billion’ dollars is more common now,” Rupp said. “You can’t build it fast enough.”
Even with the growth, Tampa Bay’s monthly rents are still $200 under the national average, and $2,000 below the highest markets in the country like New York, Rupp said.
“The problem we have in Tampa Bay is the average wages are not keeping up with this rent growth,” he said. “Now the question really becomes, is it really something where people are unable to afford it or is it just ... they’re becoming less comfortable with the affordability the same way much of the rest of the nation is living with now?”
Rupp said people are spending half their incomes on rent in more cities across the country. The U.S. Department of Housing and Urban Development defines renters as being “cost-burdened” when they dedicate more than 30 percent of what they make to housing expenses.
But Babb, Rupp’s colleague at Colliers, said he believes that threshold “is a little bit out of date.”
“In Miami, it’s pretty common that people only make two and a half times their occupancy costs,” he said.
Tommy Lee Coney, 62, is trying to find a place that doesn’t take every penny of his roughly $1,000 monthly income, which comes from Supplemental Security Income and a pension. He’s been living in a long-term stay motel in Lakeland for $727 a month. He was recently notified it’s going up to more than $900, he said.
Although Polk County was not one of the counties included in CoStar’s analysis for Tampa Bay, Florida’s rent increases have been among the highest nationwide. Some datasets show Jacksonville as having larger rent spikes than Tampa, according to Rupp. Orlando’s are close behind.
Coney has been calling every apartment complex, mobile home park and relief agency he can find, but so far has only been told of two-year-long waiting lists or prices he can’t afford. A back injury from a factory job keeps him from working, he said.
“I’m trying not to give up, man, but you keep getting turned down over and over and over,” Coney said.
The prospect of becoming homeless is “the scariest thing in the world,” he said, and the situation is taking a toll on his mental health. At least for now, he should be able to stay with family if nothing comes through.
“I never wanted handouts, I’ve always worked for what I got,” he said. “And then I can’t work, and the little money that I have, it just ain’t enough.”