Meet Miami’s newest vice: greed. As rich households take root in the Sunshine State, locals have started to scramble. The influx of wealthy transplants creates a ripple effect that dampens a major appeal of the state in the first place, its affordability. Florida and its coastal city, Miami, experienced a period of growth and prosperity, booming in population over the past couple of years. But a downturn has hit Miami as of late, as the influx of wealthy individuals comes at a price, which falls on the shoulders of long-term residents.
It all has culminated in Florida’s major metro, the subject of Pitbull’s desires and many other crooners’ songs, experiencing its first population decrease in a decade. And Miami-Dade County’s population dipped between 2019 and 2022, marking the first population decrease over multiple years since 1970, according to data from the Federal Reserve Bank of St. Louis, as first cited by the Wall Street Journal. In other words, Miami’s population has been growing from the time of detectives with pastel suits on TV up until now.
This record-breaking blip in population comes after a couple of years of growth for the area. Between 2012 and 2022, the number of Miami millionaires grew by 75%, one of the nation’s fastest rates of growth, according to a wealth report from Henley & Partners and New Work Wealth. A separate report from Smart Asset found that despite a small migration away from the state, Florida welcomed in over 20,200 from 2019 to 2020 high-income households—four times the number of high-net-worth individuals in even the second most popular state analyzed.
That’s all to say, Miami’s booming magnet status for wealthy households is the same story as its declining population—as the upper class moves in, the others move out.
Miami or Monaco?
The pandemic intensified the already-in-progress trend of high-net-worth people displacing locals and longtime Floridians. Even the retirees were bounced out of the state; as the Wall Street Journal’s Cecilie Rohwedder reported, older residents have been pushed out of the tax haven as rich people intensified the housing market. Moving to places like Baldwin County, Ala., these retirees found that housing prices went up in the state by a whopping 73.5% during the last five years.
“It’s the middle class, it’s our talent base, it’s our college graduates moving out for better opportunities elsewhere,” Maria Ilcheva, the lead of census information center at Florida International University, told the Journal of the current population decrease.
The business sector has also moved to warmer and tax-lenient pastures, as companies increasingly relocate to areas that have a lower cost of living. Even if the infamously pricey metro area of New York City still houses the most Fortune 500 companies, states in the South have increasingly appealed, as places like Texas increasingly become home to large corporations. The movement has become enough of a thing in South Florida for the area to get the moniker Wall Street South. But that doesn’t mean that every local feels the impact of a strong economy, as the Journal points out that the tech and finance sector aren’t hiring many people.
Beyond housing, inflation has hit the city hard, as the area has a consumer-price inflation of 6.9% this past June, the Journal points out. While the cost of living might be dipping elsewhere, it’s Miami, baby, and prices are still high. Data from Consumer Price in July shows that the average inflation nationwide was 4%, a number that doubled to 9% in the Miami area.
"A lot of people are still coming to Florida because the economy is really strong, and many like the fact that we don't have an income tax like in New York, for example," Amanda Phalin, a professor of economy at the University of Florida, told CBS News. "And in places like Miami, we're seeing a lot of real estate demand from non-Floridians or non-American investors - generally wealthy folks who want to have a nice home here." It’s at the point where living comfortably in the area means making more than six-figures, as a report from Florida Atlantic University alongside two other schools, claims that the average renter needs to make more than $100,000 in order to not be rent-burdened (or spending more than 30% of their pay on housing).
Prices have since then gone down after a surge, but the high-cost of living as stoked by rich residents means that Florida residents are still feeling the sting enough to need to relocate. Remote workers also flocked to the state both in the finance and tech sector, as part of a campaign from Miami Mayor Francis Suarez, who was looking to make the city into more of a crypto center.
“Miami is going through a renaissance at all levels, but especially in terms of technology,” Felice Gorordo, CEO of eMerge Americas, told Yahoo Finance. It might just be a technology renaissance, though, as the wealth from these tech jobs doesn’t reach everyone’s pockets, especially not the former locals who are now packing up and finding somewhere else to live
