Industrial Vacancies Close, Rents are Rising in South Florida

by Isaac Benmergui, Esq on April 28, 2017

rentsAs the Florida legislature debates lowering the statewide tax on commercial leases, the fact that Florida is the only state in the nation with such a tax doesn’t seem to be having any impact on demand. Industrial vacancies were down in Broward, Miami-Dade, and Palm Beach counties in 2016.

Broward County closed out 2016 with record-breaking absorption rates, with over 2.5 million square feet of industrial space occupied. Vacancies hit a 10-year low of 4.4 percent, while the supply of new industrial space hit a 4-year low of just under 500,000 square feet. Rent space jumped more than $8 per square foot last year alone, a 19-percent increase.

Part of the reason no new space is going up is because Broward is running out of land. One business park project has stalled while developers secure permits to fill in a 37-acre lake that formed in a limestone mine.

While Broward’s development is mostly made of domestic firms wanting to expand locally, Miami-Dade’s boom is largely from international companies, like Telemundo, and the larger ships coming in through the expanded Panama Canal that dock at PortMiami.

Miami-Dade County also hit 4-percent vacancy in 2016, with 2.14 million square feet rented out and another 3.4 million square feet currently under construction. For Miami developers, pricey land combined with modest returns—just 5 percent—means a lot of risk for little reward. Even so, vacancies are expected to remain low for at least the next year.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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affordable housingDespite the fact that Florida has the third-highest homeless population in the nation at 34,000 homeless, and that nearly 1 million households in the state pay more than 50 percent of their income on housing, the legislature wants to spend just $44 million on affordable housing projects this legislative session.

This year, the affordable housing trust fund will collect about $292 million in revenue. But for the tenth year in a row, Florida will not spend that money on creating workforce housing. Since 2009, Florida has diverted a total of $1.3 billion in affordable housing funds to other budget issues.

In 1992, legislators realized affordable housing would be a challenge for Florida in the near future, so they started a fund called the William E. Sadowski Affordable Housing Trust Funds to collect 10 cents from every $100 real estate transaction. In 1995, the tax was increased to 20 cents per $100.

But in 2003, legislatures began borrowing from the fund for other needs, and the borrowing continued during the Great Recession. To date, Florida only has 22 affordable housing units available for every 100 of the state’s poorest renters. If lawmakers were to leave the $272 million in the fund available for affordable housing projects, the Florida Housing Coalition claims that the projects completed with fund money would generate $3.78 billion in economic impact and produce more than 28,000 jobs.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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Florida Legislature Focuses on Real Estate Tax Cuts

by Isaac Benmergui, Esq on April 26, 2017

real estate taxTax cuts are a main focus in the Florida legislature this session. Specifically, lawmakers have their eyes on the commercial lease tax, property taxes, and estoppel letter fee limits. In his State of the State address, Florida Governor Rick Scott announced a total of $618 million in tax cuts that he would like to get passed this year.

Florida is the only state in the Union that taxes businesses on commercial leases, and Governor Scott says that is hurting small businesses in the state. In some Florida counties, businesses with commercial leases pay up to 8 percent tax on that lease, since counties are allowed to levy their own taxes on top of the 6 percent the state charges. Last year, the legislature failed to pass a bill that would have reduced that state tax by one percent.

Another focus of the 2017 session is a cap on property taxes. The cap would work in favor of homeowners who have more than one property, like rental property or vacation homes. Currently, there’s a 10-percent cap on property tax increases for nonhomestead properties, but that cap is set to expire in 2019. Lawmakers want to make that cap permanent to encourage investment and help investors plan for the future. The current cap was introduced during the economic downturn in 2009.

The legislature is also focusing on Condo and Homeowners associations this legislative session, specifically regarding the fees each can charge homebuyers for an estoppel letter, which is legally required by the homeowner before they can sell a home in an association. It tells the buyer if the homeowner is current on association dues and fees and how much they owe if not. Associations are allowed to charge a “reasonable” fee for this information, but some charge as much as $1,000. Senate Bill 398 would put a hard cap on the amount HOAs and COAs could charge.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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Does AirBnB Decrease Housing Values?

by Isaac Benmergui, Esq on April 25, 2017

housing valuesAfter Miami Beach Mayor Philip Levine went on a Facebook rant against AirBnB, the folks at Politfact decided to put his claim to the test by examining evidence on whether or not the presence of AirBnB rentals in a community increases rent prices while lowering property values.

AirBnB is a short-term rental service that’s part of the sharing economy; individuals can rent out their home, apartment, condo, room, or even just a place to sleep, to anyone they choose using the service. The providers don’t have to be licensed, pay any kind of hotel fees or taxes, or provide a specific level of service.

Mayor Levine contended that city officials in New York, San Francisco, and Miami also don’t support services like AirBnB because they “destroy neighborhoods, buildings, decrease real estate values and increase costs for workforce housing!!!!!” Levine is using the term “workforce housing” to describe properties affordable for people who make 60 to 120 percent of median income.

The evidence is inconclusive. On the one hand, several studies showed correlation between rapidly rising rents and areas that were dense in AirBnB listings, but there wasn’t enough evidence to show that the presence of AirBnB listings alone caused it. On the other hand, AirBnBs often show up in cities that are already expensive, and even then only account for less than one percent of total rental units.

Politifact determined that Mayor Levine’s claim was false. Although they did agree that AirBnB listings do decrease rental supply and therefore may drive up prices, in many cities the housing that is being occupied is in expensive areas and is not workforce housing. There is no evidence that the presence of AirBnB listings drives down housing values.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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mortgageNearly 55 percent of renters in Miami say the number one roadblock to buying a home is qualifying for a mortgage. In a new Zillow survey, other renters cited debt and job security as their number-one obstacles.

Qualifying for a mortgage isn’t as simple as just having good credit. You also have to have a favorable debt-to-income ratio. In expensive cities like Miami, the price for a very modest home could be enough to put your debt-to-income ratio into the red and keep you from qualifying for a mortgage.

Nationally, 70 percent of renters say the down payment was what stood between them and home ownership. In Miami, just 65 percent of renters said that was a problem. High rents in cities like New York, Los Angeles, and Miami keep renters out of homeownership by preventing them from saving. Miami regularly appears on lists of the top 10 most expensive cities to rent an apartment in the United States.

In Miami, the typical one-bedroom apartment costs $1,800 a month, a two-bedroom is around $2,500, while the median income hovers around $50,000. Affordable housing inventory following the housing crash has failed to keep up in denser metro areas.

To combat high down-payment requirements, maintain an excellent credit score and check out loan options like FHA, conventional loans, or USDA loans, which require 10 percent down or less. Veterans and active military can often take advantage of zero-down options through the VA. ARM loans, or adjustable rate mortgages, can also be pretty safe bets in hot markets like Miami where it’s likely you’d be able to sell before your rates rise.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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