Miami was once the Emerald City for New York professionals chasing more sun and cheaper costs.
Lower taxes, cheaper real estate and year-round warmth made Florida feel like the dream destination for putting down roots. But now that shine is wearing off.
With insurance costs, private school tuition and restaurant spending all on the rise, Miami’s cost of living has surpassed that of New York, according to an annual price-comparison report published by the U.S. Bureau of Economic Analysis reported by Bloomberg. Figures released this month mark the first time on record that the Miami metropolitan area is more expensive than greater New York City.
Since 2019, South Florida’s consumer price index has increased by 36 percent, more than any other metro area tracked by the U.S. Bureau of Labor Statistics, with the exception of Tampa.
The Miami-Fort Lauderdale-Palm Beach metro area is the second most expensive in the nation on the regional price parity index, and could soon overtake California’s San Francisco-Oakland-Fremont region as the most expensive.
The absence of state income tax is contributing to the illusion that Florida is cheaper, financial planner Nicolas Valdes-Fauli told the outlet. Newcomers save by avoiding income tax, but their money gets eaten up by other taxes and costs.
Florida’s richest 1 percent pays 2.7 percent of their income in state and local taxes, while the poorest fifth pays 13.2 percent, according to the Institute on Taxation and Economic Policy. By comparison, the top 1 percent in New York pays 13.5 percent in taxes while the poorest fifth pays 11.1 percent.
And while the median price per square foot in Miami is about $180 cheaper than the median price per square foot in New York, according to Realtor.com, prices in Miami’s prime neighborhoods rival those of the Upper East Side, Valdes-Fauli said.
Data from S&P Case-Shiller show prices in Miami have jumped 79 percent in the wake of the pandemic, the outlet reported. Property taxes have also increased 62 percent since 2019, and the total cost of housing across Miami, Fort Lauderdale and Palm Beach is about 5 percent higher than in New York.
The costs don’t slow after new residents buy a home. Florida has the highest home insurance premiums in the nation due to hurricane and flood risks, with the average premium of about $8,300 a year four times what New York State homeowners pay, Bloomberg said.
Salaries in Miami often don’t reflect the rising costs. The average household income in the city’s metro area is about $1,000 less than the national median, and professionals make less than they would in New York, according to the Census Bureau.
Miami has drawn a wave of billionaire buyers in recent years, including Mark Zuckerberg, Larry Page and Sergey Brin. Citadel founder and CEO Ken Griffin has also been active in the city, dropping hundreds of millions of dollars on residential properties for his personal portfolio.
For the superrich, Miami has become a place to test the limits of luxury. Between “landmaxxers” seeking massive multi-property compounds and developers creating branded towers with car elevators and sky garages, the city’s luxury growth shows no signs of slowing.
—Grace McClung
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