A similar picture emerges across Florida’s Panhandle. From Pensacola to Tallahassee, rents on average swelled by 28.6% in the past three years. The average price of an apartment climbed from $1,355 in 2020 to $1,743 in 2023, with annual increases at 9.53% — an indicator that despite a pandemic and threat of gale force winds, renters can’t resist the turquoise waters and white sand beaches along the Sunshine State’s Gulf Coast.
“[T]here’s a lot of opportunity here. The economy is growing, and as a result, folks weigh that trade-off. Hurricanes are a serious risk, but we have perils associated with severe weather all over the country,” said Dr. Shelton Weeks, Lucas professor of real estate at Florida Gulf Coast University.
Dr. Weeks noted that renters recognize the risks associated with living in hurricane zones, but often weigh them against the Gulf Coast’s high quality of life, its year-round temperate climate which allows for an abundance of outdoor activities, and an advantage among most renters of not having to shoulder direct storm-related costs to damaged properties.
Institutional safety nets and higher prices
What’s more, an infusion of government capital, which includes economic stimulus for clean-up and reconstruction, as well as a host of other federal subsidies, acts as a safety net, catalyzing economic growth while blunting the immediate aftershock of extreme weather events for homeowners and renters alike.
Some renters in hard-hit counties along Florida’s Big Bend region, for example, which recently sustained damage from Hurricane Idalia, will qualify for federal disaster relief, including temporary housing and financial assistance to cover property loss and other expenses, according to FEMA.
In the meantime, increased frequency and intensity of natural disasters — from hurricanes and flooding to tornadoes and wildfires — pose serious challenges to rental housing stock in communities from coast to coast.
According to FEMA data, 40 percent of occupied rental properties across the country – around 17.6 million units — are located in regions with expected annual losses due to hurricanes and other severe weather events. Around 6 million of those units are in areas with “relatively” or “very high” expected losses.
The takeaway for renters: As older, more vulnerable housing is replaced by newer stock at higher construction costs, there will be continued upward pressure on rent prices.
Experts on Gulf Coast rental markets like Dr. Weeks point out other challenges for tenants in hurricane-prone areas. In the wake of destructive storms, soaring insurance premiums, expensive property upgrades to meet modern building code requirements, and inflated construction and labor costs after severe weather events are expenses often passed on to tenants.
“[T]he folks that are running apartment complexes, their cost of business goes up. And like any business, if they want to preserve their margins, they have no choice but to pass those costs along, to the extent they can, to the tenants, their customers,” said Weeks.Â
