Airbnb rentals strain the South Florida real estate market
Renters in South Florida can thank the surge in popularity of short-term rentals such as Airbnb and Vrbo in the area for sky-high rental prices in the area. This is according to a new report from Florida Atlantic University (FAU) housing expert Ken H. Johnson.
The report suggests that rental properties such as apartments, townhouses, condominiums, and single-family houses rented out for less than six months decrease the housing inventory available to those searching for long-term rentals in Miami-Dade, Broward, and Palm Beach counties. In doing so, they push the rental cost up on the available inventory.
Johnson arrived at this conclusion after conducting conversations with around 200 real estate agents, tenants, and developers in 2022 and examining data on real estate in the Miami area.
Miami is one of the most in-demand cities worldwide for Airbnb rentals. The average monthly price for a short-term rental in Miami is $8,024, according to a study by Compare the Market, which makes it the third-most profitable Airbnb market globally. In 2021, Miami hosted 710,000 guests through Airbnb and earned a collective $200 million for the hosts, Airbnb said at the time.
An Airbnb spokesman for North America notes that in an economy where more renters this year are expected to opt for roommates or move back home with parents because they can't afford rental costs by themselves, landlords would have less risk with a single steady renter for a year or more.
“With a looming recession, demand might not be what it used to be for short-term rentals, but there will be demand for long-term rentals. The potential economic instability is encouraging us to go away from short-term rentals because less people will be working remotely and taking a vacation.”
Miami Beach has been proactive in addressing the issue, as it does not allow Airbnb’s in some residential areas and has some of the steepest fines in the country for illegal Airbnb’s, with perpetrators facing between $20,000 and $100,000 fines. However, the city reduced those fines after Airbnb sued them in 2018.
In conclusion, while short-term rentals such as those arranged via Airbnb and Vrbo may be profitable for property owners, they contribute to the affordability crisis facing renters in South Florida. The city of Miami Beach has taken steps to address this issue. However, more needs to be done on a larger scale to ensure that housing remains affordable for renters in the region.
