Region's high rent eating up income
Joe Newman | Sentinel Staff Writer
Posted September 27, 2005
When Lesley Brown got her first job out of college, she figured it was time to move out of the cramped house she shared with three other people.
But finding something Brown, 22, could afford near the Lockheed Martin facility on Sand Lake Road was another matter.
At $950 a month, even a small one-bedroom apartment was out of reach for the University of Central Florida graduate. At that price, she would have been spending much more than a third of her salary on rent.
"I was definitely surprised by the prices," Brown said. "The market soared out of my reach."
Finding an affordable rental in Central Florida is becoming a Herculean challenge.
Two of every five renters in Orange, Seminole, Polk and Volusia counties spent 35 percent or more of their monthly income on housing in 2004, according to a recent U.S. census report. The bureau did not track Osceola County.
More than half of all renters in Orange, Seminole, Polk and Volusia counties spent 30 percent or more of their income on housing.
Those statistics are up sharply from 2002. And some economists and industry analysts say they don't see the trend ending anytime soon.
The region's hot housing market is to blame.
"If housing prices go up, apartment and other rental prices will go up as well," said Mark Soskin, an economics professor at the University of Central Florida. "When people can't afford to buy a house, they go to the rental market."
With more people looking for rentals and thousands of apartments being converted into condominiums, an already tight rental market -- occupancy rates are virtually full -- will only get tighter. Rents are expected to increase an average of more than 3 percent this year, according to one real-estate-research firm.
Linda Beach, publisher of Apartment Finder, estimates that Central Florida has lost about 10 percent of its apartment communities to the condo craze this year.
"I've been in this industry for 20 years, and I've never seen it like this," Beach said.
The remaining apartment complexes are raising rents and doing away with incentives, she said. Just a year ago, many apartment complexes were offering a free month to new tenants. Those deals are becoming rarer.
Opinions on how much of one's income should be spent on rent vary, but one common rule-of-thumb is that it should be no more than 30 percent.
The 2004 numbers put Central Florida above the state average and well above the rent-to-income ratios found in communities such as Tampa, St. Petersburg and Jacksonville.
Because Orlando has a greater percentage of tourism-dependent service-industry jobs, many of the people getting squeezed by higher rents are those working for low hourly wages, said Steve Ekvich, a regional manager for Marcus & Millichap, a national real-estate brokerage.
The result is a rental market that resembles a game of musical chairs.
Affordable rentals in desirable neighborhoods are being snapped up by people who typically would rent higher-end properties.
"What you have there are renters who may or may not need low-income housing because it's the only thing available," Ekvich said.
But high rents have much more of an impact on the region's low-income residents.
Linda Couch, deputy director of the National Low Income Housing Coalition, says that about 70 percent of Florida's poor are paying more than 50 percent of their income on rent.
"You shouldn't be working half your time to pay your housing costs," Couch said. "When you're looking at who's paying more than 50 percent of their income in rent, it's predominantly the lower income [residents]."
Another consequence of high rents is that people are forced to live in outlying areas where housing is cheaper, Couch said.
"They're living so far away from their jobs -- where they want their kids to be in school -- their quality of life and the quality of life for their families isn't what it should be," she said.
Alex Kase, 62, a mechanic who rents an apartment in Winter Springs with his wife, says his landlord is about to raise his rent to almost $600 a month, which will take an even bigger chunk out of his $2,000 a month salary.
Depending on how much overtime he can get, he and his wife usually have less than $200 a month left for food after they pay rent and other expenses.
He says that packing up and moving to a cheaper place isn't as easy as it might sound. There just aren't that many places within his budget in Seminole in neighborhoods he likes.
"How are you supposed to live?" he said. "We're going down the creek without a paddle."
Brown, the recent UCF grad, ended up finding a place to live in the Red Bug Lake Road area near Casselberry. But she figures in May when her lease is up, she will be looking again for something closer to work.
The money she saved on rent is now going into her commute.
"You end up paying just as much in tolls and gas," Brown said. "Really, it's a Catch-22."
Joe Newman can be reached at jnewman@orlandosentinel.com or 407-420-6140.
Joe Newman | Sentinel Staff Writer
Posted September 27, 2005
When Lesley Brown got her first job out of college, she figured it was time to move out of the cramped house she shared with three other people.
But finding something Brown, 22, could afford near the Lockheed Martin facility on Sand Lake Road was another matter.
At $950 a month, even a small one-bedroom apartment was out of reach for the University of Central Florida graduate. At that price, she would have been spending much more than a third of her salary on rent.
"I was definitely surprised by the prices," Brown said. "The market soared out of my reach."
Finding an affordable rental in Central Florida is becoming a Herculean challenge.
Two of every five renters in Orange, Seminole, Polk and Volusia counties spent 35 percent or more of their monthly income on housing in 2004, according to a recent U.S. census report. The bureau did not track Osceola County.
More than half of all renters in Orange, Seminole, Polk and Volusia counties spent 30 percent or more of their income on housing.
Those statistics are up sharply from 2002. And some economists and industry analysts say they don't see the trend ending anytime soon.
The region's hot housing market is to blame.
"If housing prices go up, apartment and other rental prices will go up as well," said Mark Soskin, an economics professor at the University of Central Florida. "When people can't afford to buy a house, they go to the rental market."
With more people looking for rentals and thousands of apartments being converted into condominiums, an already tight rental market -- occupancy rates are virtually full -- will only get tighter. Rents are expected to increase an average of more than 3 percent this year, according to one real-estate-research firm.
Linda Beach, publisher of Apartment Finder, estimates that Central Florida has lost about 10 percent of its apartment communities to the condo craze this year.
"I've been in this industry for 20 years, and I've never seen it like this," Beach said.
The remaining apartment complexes are raising rents and doing away with incentives, she said. Just a year ago, many apartment complexes were offering a free month to new tenants. Those deals are becoming rarer.
Opinions on how much of one's income should be spent on rent vary, but one common rule-of-thumb is that it should be no more than 30 percent.
The 2004 numbers put Central Florida above the state average and well above the rent-to-income ratios found in communities such as Tampa, St. Petersburg and Jacksonville.
Because Orlando has a greater percentage of tourism-dependent service-industry jobs, many of the people getting squeezed by higher rents are those working for low hourly wages, said Steve Ekvich, a regional manager for Marcus & Millichap, a national real-estate brokerage.
The result is a rental market that resembles a game of musical chairs.
Affordable rentals in desirable neighborhoods are being snapped up by people who typically would rent higher-end properties.
"What you have there are renters who may or may not need low-income housing because it's the only thing available," Ekvich said.
But high rents have much more of an impact on the region's low-income residents.
Linda Couch, deputy director of the National Low Income Housing Coalition, says that about 70 percent of Florida's poor are paying more than 50 percent of their income on rent.
"You shouldn't be working half your time to pay your housing costs," Couch said. "When you're looking at who's paying more than 50 percent of their income in rent, it's predominantly the lower income [residents]."
Another consequence of high rents is that people are forced to live in outlying areas where housing is cheaper, Couch said.
"They're living so far away from their jobs -- where they want their kids to be in school -- their quality of life and the quality of life for their families isn't what it should be," she said.
Alex Kase, 62, a mechanic who rents an apartment in Winter Springs with his wife, says his landlord is about to raise his rent to almost $600 a month, which will take an even bigger chunk out of his $2,000 a month salary.
Depending on how much overtime he can get, he and his wife usually have less than $200 a month left for food after they pay rent and other expenses.
He says that packing up and moving to a cheaper place isn't as easy as it might sound. There just aren't that many places within his budget in Seminole in neighborhoods he likes.
"How are you supposed to live?" he said. "We're going down the creek without a paddle."
Brown, the recent UCF grad, ended up finding a place to live in the Red Bug Lake Road area near Casselberry. But she figures in May when her lease is up, she will be looking again for something closer to work.
The money she saved on rent is now going into her commute.
"You end up paying just as much in tolls and gas," Brown said. "Really, it's a Catch-22."
Joe Newman can be reached at jnewman@orlandosentinel.com or 407-420-6140.