Big demand, little space fuels high rents in St. Pete

BY JOSH BOATWRIGHT Tribune staff Published: January 26, 2014 | Updated: January 26, 2014 at 08:01 PM

ST. PETERSBURG The first wave of more than 2,000 new apartments planned in Pinellas County are becoming available to lease, but theyre not likely to fill the huge need for rental housing, especially for people of modest means.

Rising land prices, coupled with exploding demand, is driving upscale rental development near the countys urban centers that caters to ex-homeowners and rising young professionals with solid paychecks.

For instance, tenants in the 326 units at the Beacon 430 in downtown St. Petersburg will pay from $1,000 for a studio to $2,200 for three bedrooms with granite countertops, stainless steel appliances, a resort style pool and a veranda with grills and cabanas. Leasing is set to begin this spring.

Monthly rents run about $1,800 for a two-bedroom, two-bath apartment at Ibis Walk, a growing development adjacent to newly built shops and restaurants in the gateway area near Roosevelt and Gandy boulevards.

City governments have managed to attract some subsidized, affordable developments in recent years, such as the Urban Landings/Harbours Edge building near the University of South Florida St. Petersburg. It has 85 units restricted to seniors starting around $700 a month.

But in Floridas most densely-populated county, it may be a while before growth in new rental property meets the broader demand from low- and middle-income earners whose housing budget has shrunk as gas, food and healthcare costs have increased.

It comes down to basic economics, real estate experts say.

The roughly 135,000 rental properties across the peninsula are about 95 percent full and a majority are old. Land is 98 percent built out and acquiring large enough tracts for big multifamily developments is increasingly expensive.

Pricing for rental housing is absolutely driven by the key factors of supply and demand, said Michael Slater, president of real estate market firm Triad Research & Consulting Inc. in Tampa.

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Big demand, little space fuels high rents in St. Pete