During the pandemic, some major cities across the country have experienced mass exodus, accompanied by a drop in rental prices – but Miami is experiencing just the opposite.
Attracted by year-round sunshine and beaches, the city has become a destination for people from places like New York, Chicago, and San Francisco. With the help of Miami Mayor Francis Suarez, Miami has positioned itself as the latest tech hotspot, with Microsoft, venture capital firm Founders Fund, and private equity giant Blackstone, among others, opening offices. Miami has been called the future capital of cryptocurrency.
While this could mean more jobs, housing advocates say they see Miami suffer the same fate as the original tech hotspot, the San Francisco Bay Area.
When companies like Facebook and Google were expanding rapidly in the early 2000s, San Francisco and the Greater Bay Area experienced a rise in home prices. Many low-income and immigrant neighborhoods soon filled up with newcomers with high-paying tech jobs.
As prices rose, evictions and displacement increased, and San Francisco eventually became the most expensive city in the country. Just before the pandemic began last year, the median home price in San Francisco was $1.46 million, and the median rent for a two-bedroom apartment was $4,600 per month.
Now, there is concern that this could happen here.
“Technology is really hurting Miami in terms of housing costs,” said Ned Murray, director of the Metropolitan Center at Florida International University. “We can’t talk about the economy without talking about housing, they are very interconnected…what is happening now is an excessive level of improvement. It’s unbelievable to see it happen so quickly.”
The median rent for a two-bedroom apartment in Miami is currently $2,748 per month, up 17% year over year. In the three years before the pandemic, median rents were relatively flat, ranging from $2,200 to $2,450 for a two-bedroom apartment. In April of this year, rental prices began to rise significantly, according to data from Zumper. Between June and July alone, Miami’s rents increased 5.3%, making it one of the highest rental price increases in the country. The median home purchase price in the City of Miami is $414,625, an increase of 12% year over year.
Robert Rexach, who worked as a graphic designer for a cruise company before being laid off during the pandemic, says he’s seen what he calls “San Francisco” happen in South Florida, where only the elite can live.
“The cost of living is still too high for what I earn,” Rexach said, adding that he can only afford to live in Miami thanks to a kind landlord who hasn’t raised his one-bedroom apartment rent down the road for years, keeping it at $1,150 a month. “People will be priced.”
The transformation and improvement is so similar to what happened in San Francisco that nonprofits in the Miami area turn to organizations in the Bay Area for guidance.
Chris Gill works for the Mission Economic Development Association, based in one of San Francisco’s most developed neighborhoods, and advises the Allapattah Collaborative, a nonprofit organization that empowers local small businesses in the neighborhood.
He says Miami’s geographically limited space to build more housing and the new wave of tech and finance companies with well-paid workers who want to live in urban centers are among the characteristics that reflect San Francisco. This means that traditionally centrally located and affordable neighborhoods like Allapattah, Little Haiti, and Little Havana are ready for improvement.
These neighborhoods are already experiencing rapid development. Alabattah, with its proximity to downtown and the airport and its waterfront location on the Miami River, has caught the eye of developers.
Mileyka Burgos-Flores, founder of the Allapattah Collaborative, says many of the new buildings being built aren’t built for people who have lived long in Allapattah, where the median income is $34,510.
“We love technology but we need to have a better understanding of what happened in San Francisco,” she said of Suarez’s efforts to lure tech companies from the Bay Area to Miami. “Technology is good, but to bring a city that has survived the pandemic, one of the poorest in the country, to a horrific education system and a high percentage of immigrants who do not speak English and are not included digitally – there is a lot at stake for us.”
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2021 Miami Herald. Distributed by Tribune Content Agency, LLC.
the quote: Rents Beyond the Roof: Tech and ‘San Francisco-ization’ for Miami (2021, August 26) Retrieved August 29, 2021 from https://techxplore.com/news/2021-08-rents-roof-tech-san-francisco -ization.html
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