Writer: Joshua Andino
2 min read May 2022 — High prices and low inventory have driven potential homebuyers into the rental market, further squeezing Palm Beach renters who are hoping to hold on to what they can.
In what has become a years-long trend of population growth and rising costs for Palm Beach County, a new report by property management software company RealPage Inc. details that over 57% of tenants in market-rate units with expiring leases chose to renew over the last 12 months. Analyzing actual rent rolls running on the RealPage platform, Jay Parsons, vice president and head of economics and industry principals notes a year-over-year increase of 3.5%, with the retention rate for the decade between 2010 and 2019 holding at 51.5% by comparison.
“Among individual metro areas, renewal increases tend to be largest in the same places seeing the biggest new lease rent hikes. Renewal increases reached as high as 15% to 18% in West Palm Beach, Fort Lauderdale, Phoenix, New York and Orlando,” noted Parson.
In Palm Beach County, the lack of housing inventory has driven potential homebuyers into the rental market. Regional Senior Vice President for the Corcoran Group John Hackett told Invest: Palm Beach 2021 that rental demand was up significantly. “We did a tremendous number of rentals, primarily because many of those people who would have been buyers simply could not find anything to purchase,” said Hackett.
That trend seems likely to continue. Palm Beach developers have been delivering homes by the thousands, only for them to be sold the next month. Realtor.com’s current residential listings database shows 3,256 available listings in Palm Beach County, and their median days on the market hovers at around 32 days. Similarly, real estate brokerage Redfin’s Palm Beach County market profile shows the median time on the market is only 37 days.
With South Florida becoming increasingly unaffordable, local governments across the region are looking for ways to help ease the burden on current residents. In Palm Beach County, the West Palm Beach City Commission approved on May 16 a $640,000 grant to begin Phase I of the redevelopment of the Southridge public housing complex, managed by the West Palm Beach Housing Authority (WPBHA). The WPBHA is working alongside Boca Raton-based Smith & Henzy Affordable Group to redevelop Southridge in two phases, with Phase I providing 150 units for seniors making between 28% and 60% of the area median income. Phase II will provide an additional 200 apartments, with 60% of them dedicated as affordable housing for families making up to 60% of area median income, and the remaining apartments would be listed at market-rate rents.
The median household income in West Palm Beach was approximately $54,334 in 2019.
The new development is another step for West Palm Beach as communities across South Florida look to relieve residents from increasing costs. Last month, the city voted to take control of three plots of land with the goal of developing them as affordable housing. The project is aligned with Mayor Keith James’ 303 initiative to provide affordable housing, which began in January of 2020. As the need for affordable housing has grown, so has the number of units the city has looked to provide. Southridge’s redevelopment, with its 350 new apartments, will be part of the solution to Palm Beach County’s rising housing prices.
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