Orlando rents are growing at the fastest pace in the country, and one expert says it could be nearly two years before the region returns to pre-pandemic increases.
“We have an affordability crisis right now,” said Lisa McNatt, director of market analytics for Orlando for CoStar Group, which tracks rental rates. “Orlando used to be a very affordable home market.”
Rent in the second quarter grew by 18.7% year-over-year, the highest percentage growth in the nation, according to CoStar. The average asking rent in Orlando is $1,819, more than $150 above where it was in January.
Since the start of the pandemic two years ago, the average metro Orlando renter has seen an increase of $380 per month, the seventh highest increase in real dollars in the U.S., CoStar numbers show, which include Orange, Osceola and Seminole counties.
The price spike has more Orlando renters seeking financial help, said Jay Mobley, senior housing and consumer debt attorney for Orange County’s Legal Aid Society.
Many are seniors, Mobley said, especially singles with no living relatives.
“They’re living at their maximum,” he said. “They get hit with a $300 or $600 rent increase, it’s just not doable.”
But the effects also are widespread among tourism industry workers in Orlando, where the median average hourly wage of $17.59 is the lowest of the nation’s top 50 metros.
“They’re living paycheck to paycheck,” Mobley said. “Really, the only fix is to increase their income or lower their bills. And the landlord’s not willing to lower that rent because they know they can get it.”
Higher rents are largely spurred by Orlando’s booming population, which will see 1,500 new residents per week, according to the Orlando Economic Partnership.
Many are people from the Northeast who started working remotely during the pandemic, and others are following major employers such as Disney World and tech companies moving to Lake Nona.
“We’re seeing a lot of poor people having to move out, or cohabitate if they want to stay in the area, and … we’ve got people coming in that are willing and able to pay those higher rents,” Mobley said.
One bright spot is the increasing population and rent are fueling a record-setting construction boom in the region.
“If you can achieve these rents, there’s a real opportunity for a developer,” McNatt said.
Metro Orlando has more than 25,000 apartments under construction, but even that pace falls short of demand with all the incoming residents.
And as the Federal Reserve raises interest rates to fight inflation, that can have a chilling effect on developers.
Rising interest rates are also making it more difficult for Orlando residents to afford new mortgages, keeping people out of buying homes and forcing them to rent.
“That’s happening quite a lot now,” McNatt said. “Rising interest rates affect everything.”
Still, McNatt says rent increases have started to slow.
Year-over-year growth has already dropped from 23.4% in the first quarter to 18.7% in the second. McNatt predicts that will be down to 11.1% by the end of the year.
“In the course of one year, we’ll have cut rent growth in half,” she said.
Orlando won’t hit a more typical rent growth of about 6%, until the end of 2023, McNatt said.
In response to the increases, Orange County leaders are debating whether to put a rent stabilization measure on the ballot this year that could cap increases. The issue has also become a major focus for Florida Democrats in the upcoming election.
In the meantime, the situation is becoming dire for Orlando’s longtime renters, according to Mobley.
“I don’t know what’s going to happen,” he said. “I know our homeless resources are already stretched, but it’s going to get worse.”
