South Florida cities face some of the toughest housing-cost burdens in the nation. Considering the competition, that means South Florida residents are being hit hard, and more and more residents are finding their budgets stretched. This has left many Floridians looking for resources to help them make living in places like Miami affordable. After all, if their jobs and families are here, moving is undesirable or impossible. Several government programs are in place to create affordable housing. Miami real estate experts say there needs to be more.
Cities like Seattle, Denver, Los Angeles, and New York are well-known to have a shortage of housing that residents can afford without spending an inordinate percentage of income on rent, mortgage, utilities, taxes, and all the other expenses people must pay just to keep a roof over their heads. Many people are surprised to learn that Miami's affordability is as bad or worse. In a recent study by SmartAsset.com, Miami ranked a shocking 4th nationwide in un-affordable housing. The study showed that 19.34 percent of Miami residents spent more than 50 percent of their incomes on rent or mortgage.
Financial experts recommend households spend less than 30 percent of their incomes on housing. This makes sense because by the time most people pay taxes and other living expenses, paying more than 30 percent of their income on housing would leave them in a financial hole. Spending less than 30 percent increases the ability to save for retirement and create an emergency fund to handle life's unexpected expenses.
According to the SmartAsset.com study, other South Florida cities ranking high on the nationwide unaffordable list include Fort Lauderdale (10th), Hialeah (11th), Hollywood (14th), and Pompano Beach (41st). Though Pompano Beach's 41st ranking may make it sound much more affordable, you have to remember this is a nationwide ranking that includes all of California, the Pacific Coast, and East Coast cities. 13.54 percent of Pompano Beach residents pay more than 50 percent of their incomes toward rent or mortgage payments.
Miami-Dade County tries to alleviate the housing affordability crisis through tax subsidy programs, as explained in Miami Real Estate News, These programs provide developers and landlords with tax credits for keeping a certain percentage of their housing units at a below-market rate. However, many landlords say the tax subsidies are insufficient to keep up with costs. In turn, this could force many properties to abandon the affordable housing program.
Many Miami residents are concerned about the affordable housing credits, which are due to expire in two years. If they are not renewed, many residents lose their affordable housing benefits and are forced to pay the market rate, which would exacerbate the affordable housing crisis. In fact, Miami has been steadily losing affordable units since 2001. As Miami Real Estate News explains, without additional funds from the government programs, more and more landlords may choose to opt out of the affordable housing program. As property values increase, they often see better opportunities outside of the program.
Many Miami area residents find themselves without emergency savings. Much of this can be attributed to the failure of wages to keep pace with rent and property costs. As South Florida residents become increasingly low on cash due to the high living costs, they are often forced to live paycheck to paycheck. This presents difficulties when a sudden expense, such as a medical bill, a broken pair or glasses, a car repair, a dental need, or broken appliance must be dealt with right away.
For those with poor or no credit histories, this can lead to an agonizing predicament. Many find the solution in title loans. Title loans provide fast cash based on the equity the borrower has in his or her vehicle.
Often, a vehicle owner had a free and clear title to their car but realizes selling the vehicle to raise cash won't work. Usually, the borrower needs the vehicle for transportation to a job and for other family responsibilities. Using the title loan, he or she borrows against the equity in the vehicle. The borrower gets the funds and gets to keep driving the car.
When money gets tight because of Miami's high cost, title loans often provide the lifeline people need. At the present time, tenant advocates continue to work with the local government and landlords to keep and create affordable housing in the Miami area. Miami is one of America's most culturally diverse and beautiful cities, and many residents hope to see the affordability crisis end soon.