Single-family rents soar in tight housing market

You could buy a top-of-the-line laptop and a new cell phone to match, or you could pay one month’s rent for a single-family home in Los Angeles.

It’s not much better for prospective single-family renters across California, a study by HouseCanary found. In Ventura or Carlsbad, median single-family rents are $4,250, and in Santa Clara and Berkeley, median single-family rents reached $4,225 and $4,200, respectively. That’s nearly as much as it costs to deliver a newborn, on average, even with employer-provided health insurance, and quite a bit more than the $3,900 the average woman earns each month.

As eviction moratoriums expire, HouseCanary predicts single-family rents will continue to increase.

Enforcement of the now-expired Centers for Disease Control eviction moratorium was inconsistent to begin with, and in some areas there have been few checks on tenant turnover and rent increases even during the pandemic.

Curbing court-ordered evictions also only addresses a portion of evictions — a recent Princeton University study estimated that informal evictions outnumber formal proceedings by more than five to one. Still, robust local restrictions in places like New York City helped keep rents more level, the HouseCanary report found.

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In some areas, the HouseCanary study found, single-family rents skyrocketed. A median single-family rent in Cape Coral-Fort Myers, Florida stood at $1,800 in March 2020, but by October this year, had doubled to $3,600.

Florida, overall, experienced the largest rent hikes during the pandemic. The four largest increases in metropolitan areas from March 2020 to October 2021 were in Florida. Sarasota-area median single-family rent grew from $2,145 to $3,875, and single-family rents in Port St. Lucie rose to $1,895 from $2,725. The Daytona Beach area grew 39%, from $1,550 to $2,195.

“If workers are allowed to relocate, it’s hard to lose in a state where there’s 0 income tax, good weather year-round, and a lower cost of living than in New York or traditional financial centers,” said HouseCanary co-founder Chris Stroud, who leads the firm’s research efforts.

Some areas did not see such sharp increases in single-family rental prices. New York City, where the median single-family rent is $2,900, did not land on the list of top 10 most expensive cities. But of New York City’s 2.2 million rental households, just a sliver are single-family rentals, Stroud said. About a third of the nation’s rentals are single-family homes, according to the New York Times.

The HouseCanary study said a lack of supply is driving the surge in single-family rents. The supply woes have worsened during the pandemic, particularly in Baton Rouge, Louisiana, where the supply of properties for rent since the start of the pandemic decreased by 78%. In New Orleans, available rental properties decreased by 73%, and in the Winter Haven area in Florida, availability decreased by 67%.