This city has become a popular destination for people fleeing progressive dystopias like San Francisco and New York. At the time of the pandemic, the country had the hottest real estate market, which has probably not cooled yet despite the recession.
Miami has had real estate booms before. The last year It crashed in 2008, and property values took a decade to recover. Mayor Francis Suarez worried about a repeat? “Absolutely,” he says in an interview. “There you had a global financial bubble based on bad financial principles. Here, you have an exodus of $2 trillion — assets under management by companies that have moved to Miami since the start of the pandemic. Citadel, one of the US hedge funds, recently announced it was moving here from Chicago.”
Miami “took the wave,” as Mr. Suarez likes to say, in part because he rolled out the welcome mat for business. The city leads the nation in tech-job growth and immigration and ranks among the top 10 U.S. cities for venture-capital investment. According to CrunchBase News, Miami-based companies are expected to raise $2.6 billion in venture capital by 2021, up from 2015. That’s more than 20 times more than the $128 million in 2018.
Mr. Suarez looked at pooling talent and capital: “If you’re a thinker and you’re creative, you go where the best attention is from other people who help you get things done. your goals”
A broader trend is also at work: intensified competition between regions. Progressives have long sought to use federal power to eliminate the competitive advantages of states with lower levels of regulation and taxation. One toxic example is the federal income-tax deduction for state and local taxes, or SALT. In the year Over a century of tax law dating back to 1913, some of the tax cuts have protected high-tax states by reducing the incentive for their residents to relocate and punishing low-tax states for duplicating some of their forgone revenue on their neighbors.
So the 2017 tax reform, capping the SALT deduction at $10,000, was historic. By fully exposing high-income workers in blue states to their states’ taxes, it restored the natural incentive to move to Florida and Texas. Migration was already on the rise when Covid hit.
Public and private sector responses to the pandemic have created new reasons for action. Remote work has weakened ties to offices in California, Illinois and New York. Those same states have stuck with repressive Covid-19 orders, eased their criminal policies, and pushed incentivized classes in schools. Gov. Ron DeSantis went in the opposite direction, defying what he called a “woke nation,” quickly reopening and declaring Florida “the freest state in these United States.”
The 15 months between April 2020 and June 2022 saw a net migration of nearly 300,000 people to Florida, more than any other state. Among those earning more than $200,000 a year, four times as many moved to New York in 2019 and 2020. Florida led the nation in income migration, gaining more than $20 billion in net income from 2019 to 2020, while California and New York each lost nearly as much.
Florida is trending Republican, but many of its largest cities are Democratic, and both parties are active in Miami. Many Sunshine State Democrats are more conservative than their counterparts in California and New York. Rep. Val Demings, a member of the Congressional Black Caucus, and Sen. Marco Rubio, a potential challenger in November, vowed to protect Florida from sleep deprivation. “Defending the police?” says one of her ads. “That’s just crazy.”
“As part of our secret sauce in Miami, we have bipartisan support to transform Miami into a hub for innovation and entrepreneurship,” said Felice Gordo, CEO of the network platform Emerge Americas. Mr. Gorordo cited the good relationship between Mr. Suarez, a Republican, and Miami-Dade County Mayor Danielle Levine-Cava, a Democrat. Mr. Gordoardo himself served in the George W. Bush White House and was recently appointed to a senior position at the World Bank by President Biden.
Mr. Suarez is only 44 but represents an older Republican style. In the year He did not vote for Donald Trump in 2020, supported Mr. DeSantis’s Democratic challenger in 2018, and thinks the governor is confused about Miami’s tech boom. “It’s become anti-technique because it’s a good political narrative for him,” Mr Suarez said. “I’m a big fan because I look at it from an ecological point of view and create high-tech jobs.”
Miami needs a lot of talent to sustain its tech wealth, and unlike San Francisco and Boston, it doesn’t have world-class engineering schools. Peter Jared, who started and sold six tech startups in Silicon Valley before moving to Miami during the pandemic, thinks immigration is the answer: “San Francisco and New York are hiring tech workers from India and China.” We need to hire the best engineers from all over Latin America.
Mr. Loyola teaches environmental law at Florida International University and is a senior fellow at the Competitive Enterprise Institute.
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