Land shortage makes South Florida one of toughest places in
nation to build housing
South Florida is one of the worst places in the United States for homebuilding — primarily due to the region’s dwindling supply of land, industry leaders say.
As a region, Broward, Palm Beach and Miami-Dade counties rank No. 12 on a list of metropolitan areas nationwide where it’s most difficult to build houses, condominiums and apartments, according to BuildZoom, a website for contractors.
“The issue is largely geographical,” said Issi Romem, chief economist for BuildZoom. “The [metro] is basically trapped between the ocean and the Everglades.”
While builders struggle to find quality labor and deal with increasingly restrictive and expensive regulatory requirements, a shortage of lots is by far the biggest problem, said Truly Burton, executive director of the Builders Association of South Florida.
In the 1980s and ‘90s, master-planned housing developments sprouted on large tracts of land, bringing thousands of homes to communities such as Heron Bay in Parkland and Broken Sound Club in Boca Raton.
But those parcels are disappearing fast.
Parkland is the only area left in Broward with enough land to build hundreds of new homes. The land supply isn’t as dire in Palm Beach County, but some of the biggest parcels are in the far western reaches, away from major shopping and entertainment destinations.
Burton said builders now are becoming interested in what previously were considered undesirable locations.
“Why? Because they’re there,” she said.
BuildZoom tracked the percent change in the number of housing units in a metro area from 2000 to 2015, as well as the percent change in home prices over the same period.
Building was deemed most difficult in areas where there were large price increases and relatively modest residential construction.
Palm Beach, Broward and Miami-Dade had a 16.68 percent change in the number of housing units, but an 80.23 percent increase in home prices, according to data from the Federal Housing Finance Agency.
The three South Florida counties ranked just ahead of Washington, D.C., and just behind Boston and San Jose, Calif.
Tampa-St. Petersburg was 20th and Orlando 38th. Honolulu and Los Angeles ranked as the two worst areas for new housing.
Meanwhile, the latest home construction figures from the Metrostudy research firm underscore the building challenges facing South Florida.
Over the past four quarters, Palm Beach County builders started 1,963 homes, down 10 percent from the same period in the prior year.
In Broward, the annual starts pace increased 10 percent, but to only 1,485 homes. Miami-Dade was the most active of the three counties with 2,924 homes started, an 8 percent jump from the prior year.
The Metrostudy figures include single-family homes and townhomes, but not condos or apartments.
“This [tri-county] market should easily be doing 15,000 to 20,000 starts a year,” said David Cobb, regional director for Metrostudy. “The main bottleneck is the supply of land.”
Old golf courses across the region are being sold to single-family homebuilders desperate for dirt.
Miami-based 13th Floor Homes is building on former courses in Tamarac, while Pulte Homes also has a project in Tamarac and one in Hollywood.
Others are under construction or in the works in Boca Raton, Oakland Park, Pembroke Pines, Delray Beach and West Palm Beach.
13th Floor’s newest development, Hidden Trails, just off Florida’s Turnpike at Commercial Boulevard, offers some of the most affordable new homes in South Florida with prices in the upper $200,000s.
Another of the builder’s nearby projects, Manor Parc, has prices in the low $300,000s.
But those developments are the exceptions.
The high cost of land is forcing many other builders to concentrate on luxury homes or multifamily developments such as apartments and condos that don’t require much land, said Jack Winston, a housing analyst with Goodkin Consulting in Miami.
“A lot of residential builders are turning to multifamily as a way to continue their own business,” he said. “The middle market for single-family housing is really facing a tremendous challenge.”
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