Miami’s appeal to the ultrawealthy is displacing its middle class and other residents.

Miami's appeal to the ultrawealthy is displacing its middle class and other residents.

Miami’s Booming Magnet Status for the Wealthy: The Rise and Fall of Miami’s Population

Miami, the subject of Pitbull’s desires and many other crooners’ songs, has been experiencing a major population decrease – a historic event for the city. Data from the Federal Reserve Bank of St. Louis, as cited by the Wall Street Journal, reveals that Miami-Dade County’s population has dipped between 2019 and 2022, marking the first decrease over multiple years since 1970. This decline comes after several years of substantial growth for the area.

Miami has been a magnet for wealthy households, with its population of millionaires growing by 75% between 2012 and 2022 – one of the fastest rates of growth in the nation. Florida, in general, has witnessed a surge in high-income households, attracting over 20,200 individuals from 2019 to 2020. These numbers far surpass other popular destinations.

However, the boom in Miami’s affluent population has come at the expense of the local population. The pandemic exacerbated this trend, with high-net-worth individuals displacing long-time residents and even retirees. Housing prices soared, impelling retirees to search for more affordable alternatives, such as Baldwin County, Ala., where housing prices rose by a staggering 73.5% in 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,” said Maria Ilcheva, the lead of the census information center at Florida International University, discussing the reasons behind the population decrease.

Moreover, the business sector has been shifting to warmer and tax-friendly areas, with companies increasingly relocating to regions with a lower cost of living. States in the South, like Texas, have become attractive to large corporations, earning South Florida the moniker “Wall Street South.” However, the impact of this strong economy is not felt by everyone, as the tech and finance sectors have not significantly increased employment opportunities.

• Janet Yellen criticizes Fitch’s downgrade of U.S. credit as &...
• Angry Facebook Reels creators considering legal action as Meta redu...
• Robinhood’s first profitable quarter since IPO, despite decli...

In addition to housing challenges, inflation has hit Miami hard, with a consumer-price inflation rate of 6.9% in June – double the national average of 4%. Miami’s high cost of living, combined with the economic dominance of the wealthy, has created difficulties for Florida residents. According to a report from Florida Atlantic University, the average renter in Miami needs to earn over $100,000 to avoid being rent-burdened, meaning spending more than 30% of their income on housing.

“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,” explains Amanda Phalin, a professor of economics at the University of Florida. “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.”

The allure of Miami, with its strong economy and attractive tax system, has also attracted remote workers from the tech and finance sectors. Miami’s Mayor, Francis Suarez, has actively promoted the city as a crypto center. While this has contributed to a technology renaissance, the wealth generated by these tech jobs does not impact the locals who are now forced to find new places to live.

Miami’s rise and fall as a magnet for the wealthy serve as a cautionary tale about the unequal impact of economic growth on different segments of society. While the city still attracts wealthy investors and high-income individuals, the immense challenges faced by the middle class and long-time residents reveal the need for comprehensive and inclusive economic policies. Only through addressing these disparities can Miami, and other cities like it, hope to build a sustainable future for all its residents.