After the real estate market bubble burst and stock market crash set off the worst economic crisis since the Great Depression in 2008, developers stayed away from new projects for several years. However, that reluctance is in the past. Today, real estate is booming in South Florida. New apartment buildings are under construction everywhere you look in Miami.
However, even with all the new construction, analysts say the housing supply won’t come close to meeting the demand. What’s more, researchers say developers are more interested in building higher-priced, high-rent properties when lower-rent units are needed.
A recent article in the Miami Herald cited a report that said 1.1 million people currently rent apartments in Broward, Miami and Palm Beach counties, and that number is growing. The National Multifamily Housing Council and the National Apartment Association project that the area will need 185,414 new units by the year 2030 to meet demand. However, at current rates of construction, there will be only 69,400 new units by that time.
At the same time, researchers say developers have focused their attention on high-end apartments while the number of more affordable housing units has declined. In theory, new housing units should help ease the demand, allowing for lower rents at older properties, but researchers say that isn’t happening. More than half of Miami-Dade residents are already paying more than they can afford for housing, so when lower-rent properties come on the market, the demand is so high, it drives up the rent.
The commercial real estate market operates in a complex tangle of competing economic interests. Doing business in this environment requires skilled planning and sound legal advice. Lawyers with experience in South Florida commercial real estate can help developers and other businesses plan for success and resolve legal issues as they arise.
Source: Miami Herald, “Miami is getting lots of new apartments, but you may not be able to afford them,” Rene Rodriguez, July 9, 2017