For Aspiring Homeowners, It Doesn't Get Much Worse Than Miami

Miami's affordability problems have been a long time coming.
Miami's affordability problems have been a long time coming. Photo by Mike McBey / Flickr
Miami's affordability problems have been a long time coming. - PHOTO BY MIKE MCBEY / FLICKR
Miami's affordability problems have been a long time coming.
Stop if you've heard this one before: A once-affordable city likened to paradise undergoes a blistering development boom that forces longtime residents out of the neighborhoods they've called home for generations. The rent is well beyond too damn high, and economical-housing plans gather dust because — let's face it — they're just not as profitable as building high-rises for millionaires and billionaires. Sound familiar?

It's no secret that Miami's housing market sucks for anyone without the means to purchase a shiny new condo, but the extent of how bad it's gotten for middle- and low-income families bears repeating. A recent report by the home services website shows only two cities in the United States — Newark and Jersey City in New Jersey — have lower levels of homeownership than Miami, where only about 30 percent of homes are owner-occupied. Even New York City had slightly higher homeowner percentages than the Magic City.

Prohibitively high property prices paired with low wages (the Miami area's median income is $52,300) makes it so that housing costs in Miami and Hialeah are some of the most expensive in the nation relative to income — homeowners in those two cities spend more than a quarter of their wages on mortgages. Other Florida cities made Porch's rankings, but for very different reasons. Orlando isn't far off from Miami, with a 35 percent homeownership rate. Meanwhile, Port St. Lucie, Pembroke Pines, and Cape Coral all had more than 70 percent — among the ten best cities in the nation.

Since 2009, homeownership levels have decreased in every state, but nowhere as much as Florida, which has seen an almost 5 percent drop in its rate.

The picture isn't much rosier for renters in South Florida. Remarkably, Hialeah is the most expensive city to rent in the nation relative to income. Hialeah residents spend more than half of their take-home pay on rent, while Miamians spend nearly 45 percent. According to a dataset released in April by federal mortgage lender Freddie Mac, Miami-area residents are the most rent-squeezed people in the nation.

The Porch analysis made use of U.S. Census data to compare homeownership-versus-renting rates, along with housing costs and income. Unsurprisingly, the authors found millennials were the generation least likely to own a home, although total income was a better predictor of housing status than age.

Miami's affordability problems have been a long time coming, though you wouldn't know it from the actions of Republican state legislators, who have resisted raising the statewide minimum wage of $8.46 while blocking localities from raising their own minimum wages. The housing crisis has prompted Miami-Dade residents to confront county commissioners about the issue of affordable developments, but there are few indications that matters will improve anytime soon.
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Manuel Madrid is a former staff writer for Miami New Times. The child of Venezuelan immigrants, he grew up in Pompano Beach. He studied finance at Virginia Commonwealth University and worked as a writing fellow for the magazine The American Prospect in Washington, D.C.