Median rent across America’s 50 largest cities rose 20% over the last year, according to an analysis from Realtor.com.

The largest increase was seen in red states, like Florida, where thousands of new residents arrive every month, escaping blue (Democrat-controlled) states where both costs and quality-of-life issues have accelerated the migration out of progressive cities.

The largest 12 month increase in rent occurred in the Miami metro area, where rents for 2 bedroom apartments increase 50 percent, to a staggering $2850 per month. Tampa, Orlando and Jacksonville also saw dramatic increases in median rents.

Cities in other red states saw similar increases in rents as the population boom in those cities continues. Austin Texas and Memphis Tennessee saw increase of over 25 percent over the last twelve months.

These demographic changes have been going on for the last several years, but has accelerated dramatically over the last two years, according to an analysis in the book The Liberal Invasion of Red State America.

Despite the demographic trends bringing more people to red states, the median rents in progressive cities are soaring as well.

According to a national rent analysis from Zumper, New York City is currently the most expensive city to rent a one bedroom apartment at $3260 per month, while San Francisco has the highest rents for two bedroom apartments, at $3930.

Meanwhile, rental vacancy rates during the fourth quarter of 2021 fell to 5.6 percent, the lowest rate since 1984.

There are several reasons for the soaring rent prices.

Landlords across the country are being forced to raise rents because expenses are rising significantly. As the government continues to print money recklessly, the value of the currency drops, making everything (denominated in dollars) much more expensive.

Stimulus checks, and the massive $1.9 trillion bill pushed through by Biden and Congressional Democrats flooded the economy with dollars. Those dollars often flow into the hands of the wealthiest Americans; the investor class, business owners, and landlords. As the “rich got richer” from all the free-flowing government handouts, many of them purchased second homes or investment properties. Demand for these buildings skyrocketed over the last year, prices soared, and rents follow suit.

It appears to be another case of “well-intentioned” government action which backfired.

Some economists blame Biden’s anti-oil policies resulting in spiking oil prices over the last year as well. Fuel costs are a significant expense for landlords and tenants alike.

Interestingly, according to the Zumper study, rents in America’s fourth largest city, Houston Texas, have been rising much more slowly than the rest of the country. This is likely because of fewer people working in the oil industry over the last year.

Lastly, the poorly managed supply chain issues plaguing the American economy has continued to significantly raise the prices of imports, such as steel and lumber, along with household appliances like refrigerators and stoves,  another significant expense for landlords. All these things get passed down to tenants.

And due to the nationwide low vacancy rate, landlords are getting those higher rents.

The Labor Department announced that rental costs rose 0.5 percent between December and January. That is the largest one-month increase in 20 years.

Inflation in the United States soared by 7.5 percent during 2021 alone, the largest increase in over four decades.

Inflation always hurts the most vulnerable the most – the poor, the young, and the elderly on fixed incomes.

Let’s hope we get significant change in our government’s leadership in 2022 and 2024.

 

Written by Steve Tate, an investor and owner of several apartment buildings in northern New England.