‘Why Did It Become So Expensive?’: Florida’s High Costs Are Pushing Residents to the Brink

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By Giselle Balido

July 17, 2023

As the Sunshine State continues to struggle with a catastrophic inflation rate that is three times the national average, its affordability crisis is attributed primarily to skyrocketing housing costs and soaring home insurance rates. Here are the reasons why.

For most of the country, the news is encouraging. The US continues to make slow but steady progress in recovering from inflation that in 2022 reached 1981-highs of 9.1%. Now, the nation’s annual inflation rate stands at 3.1% as of June, according to the latest report from the US Bureau of Labor Statistics.

But the news remains grim for the Sunshine State, which continues to struggle with a catastrophic inflation rate that is three times the national average.

The southern part of the state is the hardest hit, with the Miami-Fort Lauderdale-West Palm Beach area having a 9% inflation rate for the 12 months that ended in April. This is the highest inflation rate of large city areas.

And Floridians are feeling the pinch.

‘Why Did It Become So Expensive?’

The state’s affordability crisis is attributed primarily to skyrocketing housing costs and soaring home insurance rates. Housing costs in the state are up a whopping 16% since last year, versus a 7.8% increase in the rest of the country.

“I’m finding that living in the place I love and call home has become next to impossible,” says Susie Larroque, a 54-year-old accountant living in Doral, Florida, who is struggling with a budget-busting increase in rent. “I was paying $1,700 for my two-bedroom apartment. Now the rent shot up to $2,600. How can you adjust your budget, without cutting out other things, without affecting your quality of life?”

Larroque only asks one question: “Why did it become so expensive?”

RELATED: Florida Taxpayers Are Footing the Bill for DeSantis’ Legal Woes

One reason cited is the population boom that took place during the tail-end of the COVID-19 pandemic, when remote workers moved to the state attracted by its climate, lack of an income tax, and low-interest rates for mortgages. However, when compounded with Florida’s limited housing inventory, this influx created a perfect storm that resulted in soaring housing costs.

Another Side to the Story

But there is another reason why shelter costs are so high in the Sunshine State, says Florida Democratic House Minority Leader Fentrice Driskell.

“Over 20 years ago, the Florida legislature established the Sadowski Fund for affordable housing. What the [DeSantis and] Republicans started doing was using that affordable housing money as their own trust fund,” Driskell told Floricua. “They would take money from affordable housing and give it away to corporations or spend it on pet projects. Anything but affordable housing.”

In an effort to remedy that, in March of this year, DeSantis signed a $711 million affordable housing legislation to create tax exemptions for developments that set aside at least 70 units for affordable housing. The law will also speed permits and development orders for affordable housing projects, among other measures. However, it will bar local rent controls, which could further exacerbate the affordability crisis in the state.

“My rent went up almost 50%. Rent is eating up my income,” Tony R., a landscaper from Homestead, told Floricua. “There comes a point when you think, ‘I’m working … for what? Just to pay rent? All this sacrifice to keep a roof over your head? And you always worry it’s going to go up more. The landlord doesn’t care, because there’s someone ready to take your place. Ultimately, I may have to leave [the state].”

He is not alone. Many Floridians are leaving the state because of higher rent costs and many homeowners’ inability to rebuild their homes in the aftermath of Hurricane Ian.

“Only very, very, extremely wealthy people will be able to rebuild,” a Fort Myers real estate agent told POLITICO.

Staggering Insurance Costs

Florida has the highest home insurance rates in the US, rising 42% just in the last year and a staggering 206% since Gov. Ron DeSantis took office in 2019, according to a Yahoo! Finance analysis of data from the Insurance Information Institute.

“My homeowner’s insurance has more than doubled,” Mirta Rodríguez, a paralegal from South Miami told Floricua. “Yes, I own my home, but that doesn’t bring peace of mind when your homeowners’ insurance, which you need to have in Florida with all of the hurricanes, can suddenly cost double. Will it keep going up? Will I be able to afford it when I retire in a few years? These things keep me up at night.”

RELATED: Farmers Insurance Pulls Out of Florida, Leaving 100,000 Homeowners to Scramble for Alternatives

Homeowners are now paying about $6,000 per year on average for their home insurance premiums. By comparison, the average annual premium nationwide costs only $1,700. The problem is on track to get worse, amid a growing exodus of insurers from Florida. Farmers Insurance last week became the fourth firm in the past year to pull out of the state. The company cited business costs impacted by hurricane rebuilding and recovery.

“This Is a Human Problem”

A report published in May by Hedge Clippers, a campaign organized by the Center for Popular Democracy, highlights how DeSantis not only failed to address the insurance crisis, but made it worse. The report criticizes DeSantis’ 2022 law that used taxpayer dollars to create a reinsurance fund for insurers–including Farmers–to tap in order to avoid bankruptcy. DeSantis’ Office of Insurance Regulation has also approved price increases at greater rates and for higher overall increases than the prior administration and the governor has signed legislation to shield insurers from lawsuits.

These “giveaways” come as insurance industry donors giving $5,000 or more have contributed $9.9 million total to “Friends of Ron DeSantis” and the Republican Party of Florida since January 1st, 2019, according to an analysis by Florida Watch.

“What is happening in my state is very sad,” says Anamari Costoya, a Coral Gables hairdresser. “You work hard and then you find out that it doesn’t matter how hard you work, you can never make ends meet. I don’t care for partisan issues. This is a human problem. We Floridians who work and live here are the ones who are suffering.”

Author

  • Giselle Balido

    Giselle is Floricua's political correspondent. She writes about the economy, environmental and social justice, and all things Latino. A published author, Giselle was born in Havana and grew up in New Jersey and Miami. She is passionate about equality, books, and cats.

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