Rental crisis solutions in South Florida

The last two years have transformed the Palm Beach County real estate market, And it’s done much more than drive up home values. More demand for places to live has sent rents skyrocketing too.That’s pushing a lot of families into a rental crisis, with no easy way out. So, we went looking for some solutions, but found no quick fixes. The migration to South Florida has turned life upside down for Nick Christensen and his neighbors in Boynton Beach, who got notices that their rents are just exploding. Nick told WPBF 25 News, “If they were increasing the rent based on inflation, which is like 8.3% right now, I could see that. That would be a line we’d be willing to tow for what’s happening nationwide. But they’re increasing our rent by 40% to 53%.” His young family can’t afford $18,000 more a year in rent. And housing market economist Brad Hunter admits there aren’t many places they can go in Palm Beach County. “There’s especially a shortage of housing that is suitable for and affordable to young families that are just starting out, people with a baby or toddler,” says Hunter. “They want to get into a place that has a yard and it’s very very difficult.” But Hunter says the housing market collapse in Phoenix 10 years ago that left whole developments of foreclosed houses that were eventually rented, sparked an idea.Stay informed: Local coverage from WPBF 25 News “(It) created a whole new sector of residential real estate called ‘build for rent single family.’ So what that means is they build a whole subdivision of single family homes or townhomes with the intention of renting them out right from the beginning.” They call them casitas or cottages. But the concept is still gaining acceptance in Florida. So is solution number two. It’s not new, but newer to South Florida. Developer Jason Larson, of Miami-based Housing Group Trust, is about to finish a unique project in downtown West Palm Beach. “We have a few units that will rent to folks as low as 30% of the area median income. And those rents will be in the $500 range.” Of those 94 new apartments that will hit the market this summer, 70 are ‘micro units.’ The micro units are 549 square feet and will be in a building called ‘Flagler Station.’Small, affordable, with first class amenities, like a clubhouse area and pool. “We take a lot of pride in the fact that the finished product is as nice as what you’ll find anywhere,” says Larson. But Palm Beach County needs thousands of these solutions right now. And these projects take years. Making more public-private partnerships will be crucial.Larson adds, “This really is a niche business. And while we do make money doing it, it is a for profit business, there is a public purpose behind it.” Developers do have to make money to create that public-private cooperation. One way is workforce housing programs. The real estate developer gets incentives and project approval from a county or municipal government by setting aside a percentage of the new homes at more attainable rents. Those rents are tied to income levels. To make it all work, more land has to be made available, much more quickly.Never miss anything: Sign up for personalized newsletters and alerts from WPBF 25 News

The last two years have transformed the Palm Beach County real estate market, And it’s done much more than drive up home values. More demand for places to live has sent rents skyrocketing too.

That’s pushing a lot of families into a rental crisis, with no easy way out. So, we went looking for some solutions, but found no quick fixes.

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The migration to South Florida has turned life upside down for Nick Christensen and his neighbors in Boynton Beach, who got notices that their rents are just exploding.

Nick told WPBF 25 News, “If they were increasing the rent based on inflation, which is like 8.3% right now, I could see that. That would be a line we’d be willing to tow for what’s happening nationwide. But they’re increasing our rent by 40% to 53%.”

His young family can’t afford $18,000 more a year in rent. And housing market economist Brad Hunter admits there aren’t many places they can go in Palm Beach County.

“There’s especially a shortage of housing that is suitable for and affordable to young families that are just starting out, people with a baby or toddler,” says Hunter. “They want to get into a place that has a yard and it’s very very difficult.”

But Hunter says the housing market collapse in Phoenix 10 years ago that left whole developments of foreclosed houses that were eventually rented, sparked an idea.

Stay informed: Local coverage from WPBF 25 News

“(It) created a whole new sector of residential real estate called ‘build for rent single family.’ So what that means is they build a whole subdivision of single family homes or townhomes with the intention of renting them out right from the beginning.”

They call them casitas or cottages. But the concept is still gaining acceptance in Florida. So is solution number two. It’s not new, but newer to South Florida.

Developer Jason Larson, of Miami-based Housing Group Trust, is about to finish a unique project in downtown West Palm Beach.

“We have a few units that will rent to folks as low as 30% of the area median income. And those rents will be in the $500 range.”

Of those 94 new apartments that will hit the market this summer, 70 are ‘micro units.’ The micro units are 549 square feet and will be in a building called ‘Flagler Station.’

Small, affordable, with first class amenities, like a clubhouse area and pool.

“We take a lot of pride in the fact that the finished product is as nice as what you’ll find anywhere,” says Larson.

But Palm Beach County needs thousands of these solutions right now. And these projects take years. Making more public-private partnerships will be crucial.

Larson adds, “This really is a niche business. And while we do make money doing it, it is a for profit business, there is a public purpose behind it.”

Developers do have to make money to create that public-private cooperation. One way is workforce housing programs.

The real estate developer gets incentives and project approval from a county or municipal government by setting aside a percentage of the new homes at more attainable rents. Those rents are tied to income levels.

To make it all work, more land has to be made available, much more quickly.

Never miss anything: Sign up for personalized newsletters and alerts from WPBF 25 News