The average cost of rental housing in Lakeland has increased by more than 25.3% since the COVID-19 pandemic emerged in March 2020, Apartmentlist.com reports. But for the second consecutive month, median monthly rents in the city appear to be stabilizing with a negligible 0.7% increase last month, according to the digital platform’s December Rent Report, which followed a decline of 1.2% in city rental rates in November.
The apparent cooling in the rental market is consistent with a national trend, Apartmentlist.com Senior Economist Chris Salviati said Friday after crunching numbers on rental trends for hundreds of cities across the U.S.
“What we have been seeing in the last few months is things are starting to settle down a bit. We are starting to see things come down to ‘normal-ish ‘levels,” he said.
Of course, all things “normal-ish” are relative.
“We normally see (rent prices) increase nationally 2-3% annually but last year, it was up by a staggering 18% across the country,” Salviati said. “In Lakeland, it’s even higher — 25.3%. That, I think, is reflective of that part of Florida broadly.”
Lakeland’s location on I-4 between Tampa — which led the nation in 2021 rent increases — and Orlando, which was sixth, places it “within reasonable commuting distance of both cities,” he said. “That makes Lakeland a really hot, really attractive market right now.”
There is normally a “seasonality” to the market with a fall/winter lull in housing costs followed by summer spikes, he said, projecting growth-related pressure across Central Florida and in Lakeland will likely spur rent hikes by summer.
According to Apartmentlst.com, median rents in the Lakeland in December were $1,148 for a 1-bedroom apartment and $1,457 for a two-bedroom unit. A similar rental-data analytic platform, Rentcafe.com, calculated the average rent for a 969-square-foot apartment in Lakeland was $1,360 in October.
“Things have been pretty flat” since fall but Lakeland could see come summer another round of “skyrocketing rent growth,” Salviati said. “It is hard to say (by how much). Lakeland is poised to be a market that will see above-average rental growth, continued fast rent growth, but I assume at a lower rate” than since March 2020.
Lakeland has “a local economy in its own right,” he continued, “but its location makes it attractive for commuters, especially with remote work taking hold” and employers increasingly open to “remote flexibility.”
“Broadly speaking, remote flexibility is loosening the tether between where jobs are located and where people chose to live” and that is among factors driving people to “move further into suburban areas. This has a cascading effect (on housing costs). I think we are seeing this across the region,” Salviati said.
Affordable housing efforts
A stabilizing rental market is good short-term news, but the city of Lakeland knows it faces significant long-term workforce housing challenges in the coming years, cautioned Annie Gibson, the city’s Housing Office programs supervisor.
“There is still, of course, a shortage of affordable housing in Lakeland,” she said, calling November’s 1.2% decline in city rents “hard to believe.”
According to 2020 U.S. Census population estimates, the Lakeland-Winter Haven metro area had the nation’s second-highest rate of population growth between July 2019 to 2020 at 2.7%.
That pace is projected to accelerate in coming years. The Florida Chamber Foundation estimates Polk County’s population will increase 24.2% and employers will need to fill 41,193 new jobs by 2030. The Lakeland Planning Area population is expected to grow 15.47%, from 258,738 in 2019 to 306,092 in 2030.
In 2019, the Lakeland City Commission identified affordable housing as one of three top priorities and “got into the businesses of rental construction to bring low-income rental units into the Lakeland area,” Gibson said.
Commissioners pledged to leverage dollars from federal, state and local funds to spur development of at least 600 affordable housing units by the end of 2021 with several projects that were then underway or set to begin. Those projects, which have now been completed, included the 96-unit Aida Palms complex, 80-apartment Midtown Lofts, 16-unit Vermont Place Apartments and second phase of Twin Lake Estates II, a 132-unit complex being built by the Lakeland Housing Authority (LHA) and Housing Trust Group of Miami.
But the emergence of the COVID-19 pandemic changed the city’s focus for awhile. Since spring 2020, the city has concentrated on rental, mortgage and utility assistance for households affected by loss of employment.
In October — the start of the federal fiscal year or ‘performance year’ — the city “refocused on purchase assistance and rehab” of existing homes and resumed efforts to leverage low-income rental construction, Gibson said.
“We are concentrating on that area,” she said, noting “the rental assistance programs had slowed down, people had got back to work. We don’t get as many applications anymore. There was an upbeat after the state’s unemployment was discontinued. And we had an increase when Delta came along, but we don’t see many applications for assistance” since early last year.
Therefore, Gibson said, “We are going ahead. We are administering all” programs funded through federal Community Development Block Grants (CDBG), U.S. Housing & Urban Development’s (HUD) HOME Investment Partnerships, Florida’s State Housing Initiatives Partnership Program (SHIP), community redevelopment agency and local general funds to assist owner-occupied homeowners, homebuyers, renters and to support efforts of non-profit public agencies to benefit low-income persons and households.
“I think you are seeing a little bit of dirt turning” on these projects around the city, she said, noting in LHA’s Twin Lakes II “the buildings are out” and will be fully occupied soon and “at Swan Landing, the building is going up.”
Swan Lake Village in north Lakeland off Griffin Road and Parker Pointe on 2.83 acres off East Bella Vista Street both broke ground last year and each will offer 88 workforce housing units by the end of 2022.
Left unresolved is how the city will spend $1.4 million it received in pandemic housing assistance via the $1.9 trillion American Rescue Plan Act (ARPA) Congress adopted in March.
“There was a pot of money that came through with ARPA to assist those who are homeless,” Gibson said. “We will be having some public workshops in the coming month” to discuss how best to leverage that money address the chronically homeless.
Lakeland was not awarded SHIP funds by state lawmakers in 2021, but received instead $739,348 in coronavirus relief funding that was dedicated to the rental assistance program for households that lost income due to COVID.
If state lawmakers give Gov. Ron DeSantis the full funding of the state’s Sadowski affordable housing fund, which he calls for in his Fiscal Year 2023 budget request, “We are kind of expecting about the same for our SHIP fund, about $700,000 or a little more” in the coming year, Gibson said.
Mortgage assistance
The resumed emphasis on building more affordable housing units comes as a new nonprofit assumes management of the city’s mortgage assistance program.
City commissioners on Dec. 20 approved a contract with Orlando-based Housing and Neighborhood Development Services (HANDS) of Central Florida to take over for the Keystone Challenge Fund Inc., which had administered the program since 1991. Keystone closed at the end of 2021 when its founder retired.
Over that 30-year span, the nonprofit — spearheaded by principals Jeff Bagwell and Beth Niemeyer — assisted more than 4,400 Polk County families in purchasing homes, including more than 950 in Lakeland. Keystone also provided homebuyer education classes and counseling for more than 25,000 county residents.
The Lakeland City Commission honored Keystone, Bagwell and Niemeyer with a proclamation in October:
“Mr. Bagwell was instrumental in helping us, in helping clients, in saying, ‘This is how we function,’” Gibson said.
Under the 33-month contract, which expires in September 2024, HANDS will be paid $2,000 for each transaction successfully closed and assist in administration of COVID-19 relief funds.
HANDS is operating at 2019 E. Edgewood Drive #104, and three longtime Keystone staff members — Bill Lavender, Leisha Thompson, Karin Lloyd — are now with HANDS.
“I don’t think we missed a beat. (HANDS) hit the ground running with virtual classes and meetings already being held with potential clients,” Gibson said. “HANDS will come in and do the same exact thing (as Keystone). A smooth transition should not be that hard. The city has a home-purchase program that is historical and, unless you see something wrong with it, we want to leave it as it is.”
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Rent increases in the Lakeland/Winter Haven areas is completely unreasonable. Some tenants have seen rent increases of $200-$500 per month for a 1Bed 1Bath while wages are not competitive to allow single, young couples or the elderly to reasonably afford the increased rent prices. Our local and state governments need to take a hard look at this and consider putting laws in place that restrict the % rent can be increased yearly. Protect your citizens.