Illegal Efficiency Rentals Are Hurting Miami Tenants
By George Rodriguez @ Real Estate Daily
February 22, 2018

Miami is a desirable market for the young, old, and even recent immigrants, but high housing costs are putting pressure on tenants. This has caused many to seek out efficiencies, or one-room apartments with a kitchenette and bathroom. However, a shortage of affordable rentals has created an underground market for illegal efficiency rentals.

Under these setups a homeowner will rent out a room or small section of their home to a tenant. Since no lease is signed between the parties, it makes it difficult for the tenant to update their address, get accurate insurance quotes, or receive legal protection in case of breach. At the same time, the lessor is in violation of city laws and will fail to report the rental income on their tax returns since this would bring the illegal arrangement to light.

Key Takeaways

  • Illegal efficiency rentals put tenants at risk of fraud and could potentially subject them to illegal restrictions on their use of the space.
  • The illegal uses of part of a property reduces the home’s market value and violates zoning laws.
  • Lessors also lose legal protection since they aren’t able to call law enforcement to remove non-paying renters.

Excerpt

Efficiencies are now a key part of Miami’s underground economy, where landlords do not declare the income and renters have no legal protections. But they have long been a cheap housing option for recent immigrants who live there for a few months before they find better jobs and are able to afford higher rents for better places.

Many of the tenants and landlords interviewed spoke on condition of anonymity for fear of repercussions. With Miami’s housing crisis — the average monthly rent for a one-bedroom apartment is $1,325 — efficiencies are attractive to more than just recent arrivals. Rents can go above $1,000 monthly, and finding a good one in a safe neighborhood is difficult.

Miami-Dade County is the third least affordable housing market in the nation, with 51.3 percent cost-burdened households, according to the U.S. Census Bureau. People are considered “cost burdened” when more than 30 percent of their gross income goes toward housing.

Not all landlords are bad and for many immigrants, efficiencies provide a short-term step toward assimilation. Olania, who arrived from Spain in 2012, lived in two efficiencies before moving to a third one in North Miami for $650 a month.

“It was a Florida room that had been converted into a living room, and it had a bedroom and a patio,” she recalled. “I could have pets and have my little parties. The owner made it easier for me by allowing me to pay toward the rent every 15 days,” said Olania, who lived in the last efficiency until January 2017, when she moved to a house with her family.

View the original article at Miami Herald