Facing high rent in Florida? Experts say vacation rentals could be part of the problem

The News4JAX I-TEAM talked with economists who say the growing popularity of short-term rentals is impacting traditional rentals

The News4JAX I-TEAM talked with economists who say the growing popularity of short-term rentals is impacting traditional rentals.

JACKSONVILLE, Fla. – If you think short-term vacation rentals are being used solely for vacation and leisure in Northeast Florida — think again.

Brooke Prince-Warinsky lives in Jacksonville’s Riverside neighborhood and said she bypassed the traditional rental process and multiple deposits that come with it, and instead, lived in a short-term rental for one year.

“It was just a lot easier to move,” Prince-Warinsky said.

She said she got a great deal, which worked out to roughly $850 a month for a year.

Tarik and Brooke Prince-Warinsky (WJXT)

“It was just easier. I didn’t have a good rental history. And it was just easier, and it was, like, ‘booked, tomorrow, boom, done,’” Prince-Warinsky explained, before comparing it to the process of finding a traditional rental apartment. “First of all, it’s really hard to even find one. I had to be online and click it immediately, and I was with rental applicants, like, 50 people. So I was lucky that I even got where I am.”

While the amount Prince-Warinsky paid for monthly rent was extraordinarily low, it’s an example of yet another option Floridians are turning to for housing.

Economists say the short-term rental market has become a factor for long-term lease landlords, who raised their monthly rent to compete.

The News4JAX I-TEAM spoke with Florida Atlantic University economist Ken Johnson.

“So when you have more and more short-term vacation rental units, you’re taking out more and more properties from the housing stock. So the supply of housing goes down as the number of short-term vacation rental units goes up,” Johnson said.

Johnson and his team at FAU conducted a study about short-term rentals driving up Florida rents, saying that while researching the contributing factors, real estate brokers kept talking about a new trend sometimes called “Airbnb arbitrage.”

Johnson said that in some instances, tenants — who don’t even own the property — are putting their units up for rent on the short-term rental market. By renting for a few days out of the month, they can make enough to pay their monthly rent.

“And I think that’s going to be a story one day as, ‘Oh, look at how many of these were people rented from one individual turned around and simply flipped it,’ if you will, to rent on a short-term basis,” said Johnson, adding, “I just was really shocked by this arbitrage concept.”

The I-TEAM wanted to know how many properties are available for short-term rental in Northeast Florida, learning that as of December, the short-term rental inventory in the region increased by 26% compared to one year earlier, according to data from AirDNA, a provider of data and analytics on the short-term rental industry.

What was also surprising is where the short-term vacation rental market saw the biggest expansion — not right on the beach, as one might expect in the Sunshine State.

AirDNA economist Bram Gallagher said the growth has been elsewhere.

“We’ve seen, say, rural locations, small cities, and suburban areas with the highest amount of growth,” Gallagher explained.

Data from AirDNA revealed the three ZIP codes with the most active rental listings in December:

  • ZIP code 32256 (Southside/Baymeadows): 1,555 rentals
  • ZIP code 32250 (Jacksonville Beach): 875 rentals
  • ZIP code 32205 (Avondale/Murray Hill/Riverside): 758 rentals

Gallagher also explained why short-term rental arbitrage may be growing in northeast Florida. Based on data from AirDNA and Real Page, the Jacksonville market ranked fifth in the country for how much money can be made from rental arbitrage, using a long-term rental as a short-term rental offering.

RELATED: UNF study finds nearly half of renters in Jacksonville are ‘cost burdened.’ Are you?

Economists say the good news for renters is that the short-term rental market isn’t forecasted to remain as strong and be as competitive as in 2022 because interest rates have risen and the housing market is slowing.

Economists also are warning the public about short-term rental arbitrage and knowing who you are renting from. If you rent a short-term rental from someone who doesn’t own the property, it’s possible the real owner is unaware of this agreement and doesn’t have adequate insurance to cover the property in case of accident or emergency.

About the Authors:

Tarik anchors the 4, 5:30 and 6:30 p.m. weekday newscasts and reports with the I-TEAM.