Our City of Gulfport and its character is not about housing stock and commercial facilities, but our people, its diversity, and its charm. What our city is about is art, food, drink, caring, and pride in our weirdness. What I’m seeing in the past couple of years has been an affordability gap for these people who created our charm and our weirdness. A lot of people have approached me and asked me, why?
Here are a few answers: home insurance increases; high demand for property and low inventory of property; proximity to water; limited land; low mortgage interest rates for the past five years; remote work-from-home issues; the cost of building materials; and supply chain issues.
I believe our three biggest are:
Issue 1: Corporate and investment buying for gain by means of vacation or seasonal rentals. Some examples why rents are up in Gulfport are Airbnbs, short-term leases, second and third home options, and pure investment properties.
Issue 2: Northern and western migration to Florida. Three causes of that migration are the climate, the cost of living comparable to where they come from, and low taxation in Florida. Two major effects of that are their ability to pay above market rate and their willingness to pay above market rate.
Issue 3: Population growth in all social categories. So, here are some interesting numbers. On the Wall Street Journal’s real estate page, Nicole Friedman reported that, as of February 1, the national median cost of a home was $397,000 and the national median cost of a home is more than the national median income. On average, Tampa Bay buyers paid $27,000 over asking prices, said an article in the Tampa Bay Times. For the year 2020-2021, 53.3% of home buyers paying cash. Municipally, the Times also reports that rental prices have increased 16.3%, as well as 43% above asking price. Finally, the Times reports that regionally, homes sell for 18.8% above asking price in 2021, the highest since 1987.
So, let’s explore all of the potential options for possible correction on affordability. I want to emphasize that I do not agree with all the options, but here they are:
• Land banking
• Remove month to month leases
• Rent control or rent stabilization
• Zoning changes such as up-zoning for multi-family units
• Limiting corporate or investment structure
The current numbers are 79% for the year 2020-2021 for pure investment purchases a 533% increase since 2011, the New York Times reported last month. With the rising rates of rent, we are now seeing the individuals who bring us the charm leave, so could this be the beginning of the charm exodus? What our city is, is the people who live here, not the buildings we live in, and if we cannot afford to live here, it will no longer be what it is.
So, let my favorite Realtor (Stacey Purcell) say, “Location, location, location!”