This year has been an eventful one for short-term rentals around the world: The boom-bust saga and seeming unending fights about new regulations.
06.12.2023 - 04:31 / skift.com / Srividya Kalyanaraman
The City of Myrtle Beach, South Carolina earlier this week gave its initial approval to a multi-family housing development plan. The proposal entails the annexation and rezoning of approximately 18 acres of land. Presently, the site is designated for commercial projects, but the proposed zoning change would permit a mix of commercial and residential development — this would include construction of more than 380 housing units, with a portion of them anticipated to be utilized for short-term rentals.
Remember back in April when we wrote about how the short-term rental industry has an ally in built-for-rent projects? Sources I interviewed for the story said there was increased interest among real estate investors in purpose-built, multi-family projects like the one in Myrtle Beach. There are cases where communities in South Florida and La Quinta, California have been re-zoned to include short-term rentals.
Let’s look at South Florida.
The South Florida Business Journal reported in March that condo development in Miami can be broadly categorized into two segments: short-term rentals, typically priced below $1 million, and luxury condos priced at $1 million and above, which exclusively permit long-term rentals. The middle ground is relatively limited, and developers assert that the increasing demand from buyers will inevitably lead to the expansion of short-term rental condos to other cities in South Florida.
The report also said that the development pipeline includes a 13 short-term rental condominiums – 12 in Miami and one in North Miami – accounting for more than 4,900 units. In contrast, the development pipeline for traditional condo units in the Miami and Fort Lauderdale regions consists of approximately 6,600 units.
I spoke to Edgardo Defortuna, CEO of Fortune International Group, which is currently developing two STR projects in Miami that would deliver 794 units with prices starting at $400,000 and $859,000. These are fully furnished units that would be sold to individual homeowners who have the option to rent them out, and should they choose to do so, there is already a property management company that will handle the rest.
Defortuna added that short-term rentals have generated more construction activity in South Florida because they are attractive as an investment, and because the units are delivered completely furnished, the buyer can list the unit as soon as it’s complete. And because it’s already zoned and armed with permits, the price is higher.
In the 10 years ending in 2018, the construction of new homes in the U.S. was at its lowest level since the 1960s. According to a study conducted by Fannie Mae in 2019, there was an estimated shortage of 3.8 million housing units available for
This year has been an eventful one for short-term rentals around the world: The boom-bust saga and seeming unending fights about new regulations.
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Happy Thanksgiving, folks! I know you’d rather carve a turkey than open your inbox, so we will keep this brief.
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