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DELRAY BEACH — With gorgeous beaches and a bustling downtown district, Delray Beach has become one of the most desirable places to live in Palm Beach County. If you can find an apartment you can afford, that is.
More than 95% of apartments in Delray Beach cost more than $1,500 per month, with the average price sitting at just above $2,000, a 3% increase from the year before, according to Rent Cafe, a nationwide apartment listing service. In downtown Delray Beach, the average price rises to $2,339 per month.
With limits on how high apartment buildings can be and a lack of available land, Delray has a severe shortage of residential space as demand rises, experts say.
The city will need an estimated 5,471 additional spaces as its population grows over the next decade, according to city documents.
Average rents have increased almost 4% in South Florida in the past year, double the increase the year before. In Boca Raton, rent increased by 7.6% to $2,177. In Fort Lauderdale, rent is up by 3.1% to $2,059.
If you’re hoping skyrocketing rental prices will eventually stabilize in Delray Beach once COVID-weary Northerners stop flocking to South Florida, you may be waiting a long time, too.
At roughly 16.5 square miles, Delray Beach is geographically a relatively small city — just half the size of neighboring Boca Raton. According to city documents, 98% of Delray Beach is already built out, creating a premium on available land. As a result, that’s driven land prices up across the city.
Buildings can’t exceed five stories, and residential complexes are allowed only 30 units per acre, eliminating the possibility for complexes with a large number of apartments.
That means developers are more likely to continue gravitating toward high-end, costly buildings since they can sell only so many units in a building, further exacerbating the rent disparity, said Jordan Jarjura, President of Menin Development.
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“In addition to us having a housing shortage, we have a shortage of housing types,” Jarjura said. “The disparity between really expensive residential property and affordable property is huge.”
Jarjura, a former city commissioner, said she thinks the only way to solve the problem is to bring back bonus incentives in the downtown corridor for housing set aside for workers such as police offers, firefighters and medical personnel.
That would mean increasing limits from 30 units per acre to 90 units, allowing for developers to recoup their money by selling more units at lower prices.
“People are opposed to density because they’re like ‘There’s already too much development going on in Delray,’ but we already have the limitations with height, so the box is what it is,” Jarjura said. “Who cares what you put inside the box as long as it’s in that three-story, four-story box.”
Tyler Knight, a real estate agent and consultant for Knight Group in Delray Beach, agreed that developers aren’t currently encouraged to provide more affordable housing. “Between constructions costs going up and land costs going up, we have to sell at a premium to make any profit here,” Knight said.