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Priced Out of Paradise: Housing crisis spares no one -- renters, buyers, owners

WPTV launches series to explore skyrocketing costs of shelter in Palm Beach County, Treasure Coast
Posted at 9:00 AM, Feb 07, 2022
and last updated 2022-02-18 13:18:10-05

WEST PALM BEACH, Fla. — Food, water, air, clothing, sleep and shelter.

These are the essential needs that psychologists say must be met for human survival. Yet, shelter -- something woven into the mythos of the American dream -- has never been more elusive.

There is a housing crisis in America and South Florida, as often is the case, is a microcosm for all that has gone sideways during the COVID-19 era.

It doesn't matter if you are a home buyer or a seller or just somebody trying to keep the home they currently own. And there are new concerns on the condominium front since the collapse of a high-rise in Surfside last summer.

The residents impacted the most are those who can least afford it: the renters. Monthly rent has gone up by hundreds of dollars a month, forcing some to move or take on roommates. Some have been forced to live out of their cars or couch hop.

Priced Out of Paradise Town Hall: Florida's Housing Crisis

The concern has reached Tallahassee where some lawmakers want the Legislature to tackle the issue. There is a growing concern that there will not be housing for essential workers, police officers, teachers or people who cook your food at restaurants and fast-food joints.

Over the next two weeks, WPTV will roll out a story each weeknight during the 6 p.m. newscasts that highlights a particular area of this crisis. It is part of our commitment at NewsChannel 5 to provide in-depth coverage on issues that affect our viewers in the Palm Beaches and the Treasure Coast.


Standing over his bed, Tom Palomba started packing pots and pans, and filling boxes with years of memories.

The senior citizen was forced to move at the end of January after he said his rent went up three times in the past year.

"I thought I was settled for the rest of my life," said Palomba, who is 79-years-old and now forced to start all over.

"This unit, this size unit right here in this complex, they're going from $1,200 to $1,300 now for these little units."

Palomba doesn't know what the next few months will look like. He survives off a small disability check, and he's been living month-to-month in a studio apartment in Port Saint Lucie for the past three years.

"What am I going to do? End up in my know at nearly 80. I don't know, it's sad," said Palomba, as his eyes welled up with tears.

According to a report from the real estate website Redfin, across the country rents increased by 14 percent at the end of 2021, which is the biggest jump in more than two years.

In the past year, rents skyrocketed in South Florida, and were the highest increases in the country. According to Redfin, rents increased 36 percent in West Palm Beach, Fort Lauderdale and Miami.

"Everything that's a three-bedroom apartment that was $2,000 last year is $4,000 or $5,000 now, so there's just nowhere to go," said Jamie Wolf, a single mom who is raising her three kids in a three-bedroom apartment in west Boca Raton.

Wolf's lease is coming up for renewal, and she says her rent is about to be increased by about 50 percent.

"I think it's not just out of control, but egregious. It's just like people don't matter. Families don't matter," Wolf said.

"Right now, in Florida we're in a state of housing affordability crisis," said State Rep. Carlos Guillermo Smith, D-Orlando.

Guillermo Smith said the crisis has been decades in the making with a severe shortage of affordable housing. In December, he sent a joint letter to Gov. Ron DeSantis demanding that he declare a state of Emergency on Housing Affordability.

"A lot of people don't realize that the state statute that protects consumers from price gouging can be enacted during a declared state of emergency," Guillermo Smith said.

DeSantis has blamed the Biden administration, saying everything is more expensive because of his policies.

For Palomba, the stress of finding a new home is taking a toll on his health as he dials every day desperately looking for any help.

"I'm still hoping that something positive will happen," Palomba said.


The price of living in paradise is potentially pushing out middle-class workforce. The average waiter or waitress living and working in the city is spending 75 percent of their salary on rent.

Registered nurses are spending 27 percent of their annual salary on renting a one-bedroom in West Palm Beach while elementary school teachers are spending 36 percent of their salary on a rent.

"Even though we give them a higher salary, it's eaten alive with all the increases," said John Ries, owner of the Hot Pie Pizza in West Palm Beach.

The result is that it is becoming harder for business owners to retain employees.

"If he can't afford or she can't afford to live in the surrounding area, the worker will then break to a new market and try to go further north or wherever it's less expensive," he said.

Even nonprofit organizations are struggling to find workers.

"If you can't afford to get a high-paying job in Palm Beach County, you won’t live here," Jervonte Edmonds, founder for Suits for Seniors.


Right now, cash is king when it comes to buying a home.

According to Florida Realtors, cash sales for homes in Palm Beach County rose 29.4 percent last year, rising to 40.9 percent in 2021 from 31.6 percent in 2020.

Also, the time a home was on the market dropped to an average of 15 days in 2021 from 37 days in 2022.

"There's a lot of people who have cash. There's a lot of money been printed. People are flush with cash and then running into hedge funds and other institutions that are in the market as well," says Jeff Lichtenstein of Echo Fine Properties in Palm Beach Gardens.

Institutions and hedge funds started buying up homes in large numbers in 2011 during the last foreclosure crisis, snapping up homes, fixing them and creating a rental industry.

Online real estate broker Redfin has studied the effect of institutional buying of homes.

In the third quarter of 2021, they said investors buying homes was at 90,215 homes nationwide, up 80.2 percent from a year ago, and nearly three out of four (74.4 percent) were single-family homes.

Redfin looked at Palm Beach County and found in the third quarter of 2021, investors bought 1,313 homes, 15.4 percent of the homes sales, an 8 percent hike from a year ago.

Karan Kaul of the Urban Institute, a think tank in Washington, said institutional buying usually focuses on homes they can find at the right price.

"They want to buy homes at the best possible price they can. They want to fix them up, and they want to put them up on the market for renting as soon as they can," Kaul said.

He said the current inventory shortage of homes has more of an impact on buying that these money firms.

Larry Scott, a homeowner in St Lucie County, said he was constantly being outbid in Palm Beach County for homes by cash bidders, some he speculates might have been institutional offers.

"After the first one, we found it was conventional cash and people say they close quicker and sorry they paid in cash and that was the thing," Scott said.

Finally, he said he tried to level the playing field by going through underwriting pre-approval.

"I would look into trying to get underwriting first, because once we did that the first home we looked at, done," Scott said.


Are you in the market for a newly-constructed dream home? Well, you better fasten your seatbelt.

Brand new homes in South Florida are not immune to the outrageous demand in the housing market. Homebuyers at times are getting into bidding wars with other buyers or sales centers for a lot to build their dream home.

You can have all of this money and then somebody comes in and outbids you, and it's like your dreams are crushed again," said Terrance Diaz.

High demand and delays with supply are causing developers to only make a few lots available at a time for purchase.

In some cases, buyers are camping out at sales centers overnight for a chance at securing a newly released lot to build.

"What are you willing to do to get it? Right? The sacrifices and that's what I'm about," Diaz said.


You don't need to be a buyer or a seller to feel the housing crisis. Right now, Florida homeowners are paying up to 25 percent more for home insurance premiums.

Higher prices of building materials and supply chain disruptions are two causes.

Insurers are also raising premiums after the recent high amount of claims they've processed.

One problem cropping up is the way insurance companies are assessing roofs on homes.

Royal Palm Beach homeowner Lori Lanni said she signed an assignment of benefits letter to a roofing company to have repair work done.

Now, her Citizens Insurance premium more than doubled from $1,700 a year to $3,400.

"They're passing it on to the customer. You know, we've never made a claim. We've never done anything to deserve what's happening, so we're kind of upset about that," Lanni said.

Right now, she's trying to pinpoint what happened, since she recently upgraded her roof, and she's never filed a claim in the 20 years in her home.

Mortgage rates and home prices are expected to surge. The added expense of insurance is adding to putting that dream home out of reach.

S&P Global Market Intelligence reports the annual homeowner's insurance premiums rose 11.4 percent between 2017 and 2020. That is almost twice the rate of inflation.


For those trying to avoid the whims of the housing market, a condominium is often an affordable option.

But it's a bit more complicated since the collapse of Champlain Towers South last summer in Surfside. For those wanting the condo lifestyle, buyer beware is an important rule of thumb when hit with assessment fees.

In short, owning a piece of oceanside paradise means being prepared to pay for it. Perspective condo owners need to read the fine print because it can add significantly to the monthly mortgage bill.

"Our concrete engineer had told us we needed to do a concrete restoration," said Steve Rogers, condo board president for Chalfonte Towers in Boca Raton. "I don't want our building to end up like Surfside."

Built in the 1970s, salt air and ocean winds have eroded the southeast-facing balconies over the years. The cost of repairs comes to around $2 million, which comes to a $5,300 assessment for every condo owner at Chalfonte.

And that is just the beginning of special assessments. State-mandated fire safety improvements will likely mean another $2 million repair bill split between owners.

Resident Tom Madden said assessments are the reality of high-rise living. He said an inactive board trying to placate residents can allow a building to deteriorate and become unsafe.


Answers to the multifaceted housing crisis remain mostly on the drawing board. They range from the creation of more affordable housing, such as the Biden administration last summer calling for more apartment buildings, or to more out-of-the-box solutions like 3-D print homes, which permits have been issued and are said to construct 40 percent.

The Palm Beach County Commission called for more affordable housing in January.

County Administrator Verdenia Baker said over the last year the median home purchase price reached $500,000. And the fair market rent for a two-bedroom apartment is more than $1,400 per month.

The county is looking at additional options to create and expand housing options, like rehabilitating older homes and building on county-owned property. But commissioners also said the amount of available land to build on is limited.

Flagler near downtown West Palm Beach will create nearly 100 affordable housing units when it's complete this year.

The West Palm Beach Housing Authority also spearheaded 36 homes that are designed for those in the workforce in Pleasant City near Good Samaritan Hospital. The homes are for people earning about $45,000 to $105,000.

Delray Beach has also contracted with Pulte Homes to build workforce housing in Carver Square.

There's also a proposal to create an affordable housing complex called Island Cove, a two-story, 60-unit apartment community.

"Having affordable housing would really help a lot of the families here," said Amura Powell a Delray Beach native. "There's families that have four families under one roof because there's literally no place else without paying an arm and a leg."


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