Miami, a global hot spot with ambitions to be a business and financial hub, is driving away more residents than it is attracting.
Surging housing costs and a fickle labor market, which by one measure still hasn’t recovered from the pandemic, are sending many locals packing. Miami-Dade lost 79,535 people through net migration to other parts of Florida or other states between 2020 and 2022, according to an analysis of U.S. Census Bureau data by the Brookings Institution.
Although foreign immigration offset some of the loss and helped the county’s population rise slightly last year, Miami-Dade County’s population still shrank between 2019 and 2022—its first population loss over a multiyear period since at least 1970, according to the Federal Reserve Bank of St. Louis.
The population loss in the state’s largest county stands in contrast to the rest of Florida, which added more people between 2021 and 2022 than any other state.
Home prices in Miami have soared 53% since June 2020, according to online listing site Zillow, the second most out of the top 50 metropolitan housing markets after Tampa. The median asking rent has increased by 27% since 2019, according to data company CoStar, rising despite the shrinking population because of a chronic shortage of affordable rental housing.
It is easy to spot ways in which the city is booming. Major boulevards are littered with construction cranes and Miami office towers have a lower vacancy rate than other major U.S. cities. Miami-Dade County’s unemployment rate is well below the national average and it is creating new businesses at its fastest pace ever.
But Miami risks following the same path as New York City and San Francisco, the country’s financial and tech centers, where the growth of high-paying white collar jobs raised the cost of living, sending many of those cities’ working and middle-class residents searching for a more affordable place to live.
Despite the job and economic boom, Miami-Dade has experienced a bigger loss as a share of total population than the city of Baltimore and Wayne County, Mich., which includes Detroit, over the two-year period.
“It’s the middle class, it’s our talent base, it’s our college graduates moving out for better opportunities elsewhere,” said Maria Ilcheva, census information center lead at Florida International University’s Jorge M. Perez Metropolitan Center.
Jose Perez, a real-estate broker who was born and raised in Miami, is among those who felt priced out.
“More than half his clients left the area when the cost of living began to soar. With incomes of between $70,000 and $150,000, they were living paycheck to paycheck,” Perez said.
Perez soon moved out himself. He sold his Miami home for $800,000 and bought a comparable one in the central Florida city Ocala for $297,000. His savings in insurance alone add up to $5,460 a year, he said. His property taxes went from $7000 to under $2000 a year.
“Here you see you can get so much more bang for your buck,” said Perez, who now works for D.R. Horton, a national home builder.
Miami was already one of the country’s least affordable metropolitan areas before the pandemic, which helped drive prices up even more. The Miami metro area posted an annual consumer-price inflation of 6.9% in June, according to the U.S. Bureau of Labor Statistics. That is more than double the national inflation.
The city also has the highest share of “cost-burdened renters” of any major metropolitan area: 61% of its rental population are spending 30% or more of household income on housing, according to a report released this year by the Joint Center for Housing Studies at Harvard University.
High rents sting because the area’s hourly wage, though rising, was below the national average as of 2022 and a far cry from earnings in New York and San Francisco.
While unemployment is low, the county’s labor market by one measure lags behind the rest of the state. The total number of employed people in Miami-Dade County was slightly below 2019 levels in May while it has increased for Florida as a whole, according to data from the Florida Department of Economic Opportunity.
The area can’t match the diverse economic base of cities like New York, and Miami also has struggled to match the success of sunbelt boomtowns like Phoenix and Austin in attracting factories and big corporate headquarters, which bring with them thousands of jobs.
Miami is attracting plenty of new companies. In 2022, 127,895 business applications were made in Miami-Dade County, according to the U.S. Census Bureau. That was down slightly from the previous year, but well above prepandemic levels. But many tech and finance firms are opening small or satellite offices that employ few people. Others are focused on cryptocurrencies, a market that has taken a nosedive.
Limited public transit and clogged roads also make it hard to entice employers. Hours lost to traffic delays in Miami increased by 59% between 2021 and 2022, according to data company INRIX—one of the highest increases among big U.S. cities.
“We need to be a city that, below the skyline, can provide a good quality of living,” Ilcheva said.
Still, there are reasons for optimism. The influx of wealthy residents and rising property prices are boosting tax revenues and a recent surge in new construction could bring down housing costs over time. Rent growth has slowed and wages have increased.
Foreign immigration increased in 2022 from pandemic lows and helped offset some of the American exodus, though Miami-Dade county’s population still shrank by 21,664 from 2020 to 2022 even with the rise in new residents from overseas.
Some Miami residents who left enjoy a lower cost of living but have been forced to make other trade-offs. Natalie Pena and her husband sold their 1,100 square foot home in Miami for $440,000. In June, they moved with their son to a larger home in Ocala, which they purchased for about half the price. Still, she’s had some trouble finding a job. Her husband, a barber, commutes 4½ hours to Miami early on Wednesdays to service his clients through Friday night.
“I was expecting to take a hit, to reduce my salary, but it’s been a little shocking,” Pena said.
Miami-Dade County’s mayor last year declared a housing crisis, and rolled out several affordable housing initiatives and other programs. Gov. Ron DeSantis recently signed legislation that will motivate developers to build workforce and affordable housing across the state to help address the housing crisis. The law, known as the “Live Local Act,” also prohibits local municipalities from enacting rent controls.
Miami-Dade County’s population doubled between 1970 and 2010, but growth slowed over the past decade. At first, immigration from abroad masked the flow of people away from the region, Ilcheva said. A rise in outflows combined with lower immigration during the pandemic put the region’s demographics into the red.
The top destinations for professionals leaving the Miami area are Orlando, Tampa Bay, Atlanta and Jacksonville, according to a recent LinkedIn study—all cities that also offer warm weather and low taxes, but much cheaper housing.
“The people who built this city cannot afford to live in their own homes that they spent their entire lives in,” said Billy Corben, a local resident and gadfly documentarian who often criticizes local politicians’ push for rapid growth. “Once those people are gone, then what is Miami? What is left of this place?”
Source: MSN
