Writer: Esteban Pages
3 min read July 2023 — As the price of goods and services are beginning to cool down across the country, South Florida’s inflation levels are more than double the national rate. The sustained demand from people moving into the Sunshine State has kept home and rental prices high while businesses continue to adjust amid higher overall operating costs.
“We have frank and open discussions regarding inflation,” Broward County Black Chamber of Commerce President Shaheewa Jarrett Gelin told Invest:.
“Small businesses feel prices go up more because they cannot take advantage of economies of scale like large corporations can. Some of our businesses absorbed the higher costs for a while to keep customers coming back but, at some point, they had to pass it on.” According to TD Bank’s South Florida small business survey, increasing costs were a top challenge related to operating their businesses in 2023. However, small business owners adapted by changing payment schedules and adding additional fees to customer bills.
Last month, consumer inflation was 6.9% in the Miami-Fort Lauderdale-West Palm Beach region — the lowest since November 2021 and around the same rate as the national average. However, since then the gap between South Florida and U.S. inflation rate has widened to nearly 4% in June, as indicated by the U.S. Bureau of Labor Statistics.
The gap between South Florida and the national housing market is another key measure. The Miami-Fort Lauderdale-West Palm Beach housing CPI index reached 375 points last month, a 14.1% increase year-over-year. In comparison, the U.S. S&P Case-Shiller Home Price Index fell 1.7% to 307 points in April year-over-year.
As new home construction has fallen behind relative to population growth in Broward County and South Florida as a whole, the need for more housing supply, particularly workforce housing, are among the top priorities for the area. “The workforce housing dilemma is an issue that cannot be resolved overnight. To address the current shortage of 54,000 housing units, it will take at least a decade of dedicated efforts,” said said Heiko Dobrikow, executive vice president & general manager of the Riverside Hotel in an interview with Invest:.
“However, over the next five years, we have a plan to construct approximately 22,000 units. This progress is made possible by the availability of funds specifically allocated for affordable housing. The Sadowski fund, which was previously at risk of being diverted, is now protected. Governor DeSantis has ensured that the money invested in the affordable housing fund remains within our community, enabling us to build affordable and workforce housing units.”
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