Making the Rent

High-end new developments, stagnant salaries, Miami‑Dade issues moving north – if it’s hard to pay the rent in Fort Lauderdale, there are a few reasons.

By: 

April Simpson

Published date: 

May. 1, 2016

When Jeffrey Huber moved from Arkansas to Fort Lauderdale with his family three-and-a-half years ago, they wanted what they had in Fayetteville: a single-family home with a large backyard and in a walkable neighborhood. To their surprise, that wasn’t an option. A swimming pool? Out of the question.

They could have lived in the suburbs, but Huber wanted to avoid the external costs, like gas and time spent on the road. “I see tons of people who do it, but it’s just not in my lifestyle,” Huber says.
Huber and his wife settled in Victoria Park. They didn’t love it. Huber describes the neighborhood as beautiful but monoculture. The cost of electricity and water for their two-bedroom house was also unmanageable.
So last year they relocated to a townhouse in Bamboo Flats, a nine-year-old condo in Flagler Village where for the same price they paid in Victoria Park, they’ve gained twice as much in square footage. Huber says he can walk to the grocery store and bike or walk to his kids’ schools. It’s the kind of lifestyle he and his wife were looking for, but it’s still challenging when you’re raising children. 
“Downtown Fort Lauderdale is pretty unaffordable from certain stances, even for two young professionals with decent salaries,” Huber says.
Huber, an assistant professor in the School of Architecture at Florida Atlantic University, knows some folks are struggling. “Think about it. Your single mother…trying to put your kids through school. I have several students that are doing that. That’s just unaffordable. You have to drive; you have child care. There’s a lot of stress that can come from that.” 
In an economy driven in part by tourism and retail, many South Florida workers aren’t bringing home big checks. Whether they’re professionals like Huber or weathering tough times, they’re devoting a good chunk of their earnings to rent. Soaring property values may be good for development, but some neighborhoods are struggling to maintain some semblance of community and historic character - and many renters are struggling to stay afloat in a competitive rental market. 
“I think the rental market is no good, to be honest,” says Jorge Hirmas, a realtor with Weichert Realtors, which covers Broward and Palm Beach counties. “It’s no good for the people looking for rentals, but investors are loving it right now.” 
 
Rents rise, incomes lag
City plans call for more high-density housing, but it’s not being built quickly enough to meet demand. The shortage of rental property keeps rates high – as do other issues.
“It goes beyond just a shortage,” says Mandy Bartle, executive director of South Florida Community Land Trust, a nonprofit that offers affordable and lease-purchase homes for very low to middle-income households. “There’s a mismatch in the types of units being built. It’s all been luxury or high-end, so the price points are mismatched with what people can actually afford.”
South Florida is among the few areas in the country where rents and salaries don’t match at all, according to a recent study by Capitol One and the New York University Furman Center for Real Estate and Urban Policy. The study considers the rental housing landscape between 2006 and 2014 in America’s largest metropolitan areas, including Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, New York, Philadelphia, San Francisco and Washington, D.C. The Miami metropolitan area – which for the purposes of the study includes Miami-Dade, Broward and Palm Beach counties - “pops out as a troubling exception – a high-cost city without high incomes,” the study says.
The study makes several key points: The median rent is more than $150 higher than the national benchmark, while the median renter’s income is more than $1,000 lower than that figure among metros nationwide. A renter in the middle of the income distribution can only afford 15 percent of recently available units. Renters’ clear disadvantage earns South Florida a national distinction: It’s the least affordable rental market among the largest metro areas, the study says. 
“With the recession, we saw a drop in the prices of some of the houses for sale, but we never saw a dip in rental prices,” Bartle says. “Those prices continued to escalate. So the recession put a greater demand on rental units because if people are losing their homes, they have no choice but to rent.” 
Many new apartment projects can carry “somewhat staggering” rental rates, from between $2 and $3 a square foot, says Jack McCabe of McCabe Research and Consulting in Deerfield Beach, which analyzes the real estate market. The working and middle classes are not seeing any new projects for their income bracket. “As long as a landlord knows they can get increasing revenue and maintain high occupancies, they’re going to continue increasing rates,” McCabe says. 
Fort Lauderdale-area renters are affected by larger, regional challenges. Experts point to a number of forces. South Florida has historically been a destination for Northerners to escape paralyzing winters. But snowbirds are increasingly staying for longer periods, says Jorge San Miguel, an adjunct professor in the H. Wayne Huizenga College of Business and Entrepreneurship at Nova Southeastern University. Some of these older residents are leaving behind significantly higher tax burdens by selling their out-of-state homes and making the South Florida lifestyle their full-time situation. They’re not the only ones finding refuge in the area. “Because of our climate and because of our geographic location, we are the recipients of a significant amount of flight capital from other parts of the world,” San Miguel says.
South Florida is a destination for wealthier people from Latin America, many of whom are fleeing violence, corruption and financial meltdowns in their home countries. To a lesser extent, there have also been investors from places such as Russia seeking safe environments where they’ll also receive a good value. “Anyone who has the ability, anyone who has the liquidity, is bringing their currency up here and investing in residential real estate,” San Miguel says. “If things get bad enough in their country, they have a place where they can settle.”
The situation pits Broward and Miami-Dade against each other. Experts say rental rates are more affordable in Broward than in Miami-Dade, especially among the newer properties, which can go for $3 a square foot and higher. There’s already high traffic between the two counties. Those who have been pushed out of the Miami market are moving north, which pushes up rental rates in Broward. 
McCabe says that in Fort Lauderdale, as in the rest of South Florida, rents have been skyrocketing since 2011 and are quickly reaching the point of being unaffordable for a large percentage of Broward’s population, whose median household income is about $56,000 a year. According to an Affordable Housing and Economic Analysis study prepared for the City of Fort Lauderdale by the Florida International University Metropolitan Center, about 55 percent of Fort Lauderdale’s renter households are paying more than 30 percent of their incomes on housing costs, representing a 39.7-percent increase in cost-burdened renter households since 2000. In addition, the study says that 30 percent of the city’s renters are “severely” cost-burdened, shelling out more than 50 percent of their incomes on housing costs.
“It doesn’t leave much money for recreation, personal expenses or saving up money for a down payment to buy a house,” McCabe says, adding that housing costs force some to forgo vacations and necessities like medications and doctor visits. 
With inflated prices, Hirmas says many of his clients are weighing the cost of moving against rental increases, and choosing to stay put. Others long for the days of move-in specials and looser restrictions; now, management companies want first and last month’s rent, plus a security deposit, “no ifs, ands or buts,” Hirmas says. Others seek housing that just doesn’t exist. Rony Calixte, a realtor with Minyan Realty in Dania Beach, says he recently consulted with a young woman who wanted a one-bedroom for $500. “She wants to live in a nice area,” Calixte says. “She’s better off renting someone’s room in a house.”
People are going anywhere they can to find affordable housing, from blighted areas in the urban core to the suburbs and beyond. But in Broward, between the Everglades and the Atlantic Ocean, moving away from an urban center leaves little room for finding anything affordable. “People aren’t moving north to Boca,” San Miguel says. 
“The push is out, it’s farther away from where they work, which creates a whole other series of societal issues,” such as stress to roadways, and time devoted to commuting, San Miguel says. 
Selima Hussain, a 23-year-old social media producer at the South Florida Sun-Sentinel, commutes 40 minutes from her home in Hollywood to the newspaper’s downtown Fort Lauderdale office. She prefers back roads to highways - they’re too stressful, she says - so she turns the dial to Y100 and enjoys the ride because moving closer to work is not an option. “It’s too expensive,” Hussain says. “I’m pretty young. I just got the job. I still live with my parents. It’s just more affordable that way.”
Growing up in South Florida, Hussain says she was well aware of the high cost of living and economic impact of the tourism industry. “Just because I understand it doesn’t mean I’m going to be a part of it,” she says. But her decision to stay home after graduating from FIU two years ago is also cultural. “I have a close-knit family,” says Hussain, who’s of Guyanese descent. “In my culture, if the girl isn’t married yet, then living by yourself is not common.”
She looks forward to one day venturing out. “I’m trying to save up right now for when that moment comes,” Hussain says.
 “We’re getting
people making money”
Drive around Flagler Village, the swiftly growing neighborhood of condos and apartments on the north side of downtown, and you can see an obvious shift in some corners with shiny condos across the street from old crumbling homes. Julson Petithomme, 35, lives in one such structure, an 81-year-old multifamily directly across the street from the 11-year-old Sole Condominium complex. 
Petithomme says he pays $750 a month - well below market rate - for a one-bedroom, one-bathroom unit without central air conditioning. At Sole, among the neighborhood’s first higher-end apartment complexes, one-bedrooms typically rent for twice as much, and include access to a courtyard, fitness center, parking garage, and other amenities. “Here, it’s very expensive,” he says.
Petithomme, a slender man from Haiti, wears a light blue T-shirt with an image of Argentine soccer superstar Lionel Messi on the front tucked into blue jeans. He’s never been inside Sole, whose residents walk their dogs and strike up conversation along the building’s perimeter, creating a friendly and social atmosphere that extends to the clubhouse and around the swimming pool. 
Since moving in with his mother two years ago, Petithomme doesn’t feel like he’s living in the shadow of newer structures, or being squeezed out of the neighborhood, even as he points to an 89-year-old, 2,344-square foot duplex next door that, according to Zillow, sold for $1.43 million in 2012. Petithomme says the street is always busy with new folks moving in. Still, the contrasts don’t bother him. He has no plans of leaving. “The street, it’s nice, no trouble, no shout, nothing,” Petithomme says in heavily accented English. “No bad people. That’s nice.”
Over the 22 years that Robert Larsen, president of the Flagler Village Civic Association, has lived in the neighborhood, he says he’s seen it change from empty lots, high crime, old single-family homes and some crack houses. “We still have problems, but it used to be a lot wilder until we got more units built,” Larsen says. With greater density, the neighborhood’s aesthetics have changed. “We’ve gone from crime walks to art walks, and now we have foreign cars and small dogs,” Larsen says. 
Larsen says streets like Petithomme’s are more typical of the old Flagler Village: a mix of West Indian and Haitian families, but with a lot more vacant land mixed in. “Some of the streets still are very mixed and ethnic and great,” Larsen says.
What’s the profile of your typical Flagler Village resident? “On the new side, you just go over there and look,” Larsen says. “It’s just all 20- or 30-somethings. Mostly Caucasian, mostly young professionals. That is the new resident. That is who everyone is marketing to. Before, there were very few people who were living in the neighborhood.”
More people are moving to downtown as more product becomes available, says local developer Jim Ellis, who’s mainly involved in multi-family residential buildings. Ellis expects interest to increase as Fort Lauderdale develops its transportation hub, including bus terminal, Sun Trolley, All Aboard Florida passenger rail and Wave streetcar. He doesn’t foresee vacancy based on the rental rate. “I think a lot of people who can’t afford a single bedroom are finding a roommate, getting a two-bedroom and cutting their costs by doing that,” Ellis says. “I don’t think we’re anywhere near being overbuilt to a point where the economy will change and people won’t still demand to be downtown.”
At The Manor, a $149 million, 382-unit development just east of Sole, with retail on the ground floor facing Federal Highway, a 700-square-foot studio is listed for $1,800 a month, and that’s on the lower end. A three-bedroom two-bath is listed for about $3,200. 
Fort Lauderdale is overpriced, Larsen says. “I know a lot of people who moved out of the neighborhood because they can’t afford it,” he says. “We’re not getting students; we’re not getting artists; we’re getting people making money.” 
 
 What changes next
After Flagler Village, Ellis says the Progresso neighborhood to its west, and areas south of the New River, are beginning to take off. But residents of Dorsey-Riverbend, a historically black neighborhood just west of Progresso, say they’re seeing subtle changes as well. According to the FIU study, the Dorsey-Riverbend, Progresso, Flagler Village area - grouped together in the study, along with several smaller communities with separate neighborhood associations - are among the densest neighborhoods in Fort Lauderdale, have the highest percentages of residents ages 55 and younger, and the highest renter occupancy rates. 
“People [are] using this as a way to get downtown now. Cut off all that traffic,” says Keith Skinner, co-owner of Skinner’s Grill, a Sistrunk Boulevard establishment. Diverse people aren’t just passing through the neighborhood. They’re becoming area residents, particularly Hispanic families and young white blue-collar workers and students, says LaRhonda Ware, president of the Dorsey-Riverbend Civic Association. “The green apartments, they’re moving in,” Ware says of longstanding local apartment communities where she was once a renter. “We’ve never seen that before.”
On a recent Saturday afternoon, Ware chatted with Skinner at his restaurant, alongside a row of men sitting on barstools, enjoying a Southern fare and listening in. Skinner isn’t a fan of high-rise condos. He agrees with Ware. There has been a shift in neighborhood demographics. “It’s diverse,” Skinner says. “It’s a good thing, but they have to understand our roots here.” 
Skinner is fine with development, so long as longtime residents aren’t left out. “Change is always good. I don’t knock change, but I want it done right,” Skinner says. “We want to make sure the people who have been here are taken care of.” 
Ware says she’s seen predatory developers offer Dorsey-Riverbend homeowners a mere $30,000 to $40,000 for their home, only for those residents to burn through the money and dig themselves in a hole by having to pick up mortgages or rent elsewhere. Ware says other homeowners have lost their homes because they can’t afford or otherwise fail to upgrade them according to code. Investors buy up those homes and rent them out, Ware says.
“Just about every politician, every leader, came out of this community,” Ware tells Skinner. 
“This is history right here, but we always let this history get away,” Skinner says. 
Down the block, Richard A. Kurtz, funeral director of Roy Mizell and Kurtz Funeral Home, and a former president of the Broward County chapter of the NAACP, says that, so far, he’s OK with development in Dorsey-Riverbend. “I see a lot of people that look like us so I’m all right with that,” Kurtz says. “We still have majority black folks moving in.”