There’s no doubt that Miami has always been a playground for the rich. But things changed a little over a decade ago when developers doubled down on this niche market and began building glitzy towers that were designed to outdo their competitors.
For the billionaire who has always wanted to do laps in a human fish bowl in the sky, venture to starchitect Zaha Hadid’s One Thousand Museum Tower, where you can dive into an indoor pool 60 stories in the air with just a glass wall separating swimmers from the world outside. The price for this privilege? From $5.5 million to $49 million.
For the banker who will spend any amount necessary to park the car in the condo’s foyer, look no further than Porsche Design Tower, which has elevators that take you and your car to your garage just steps outside your condo’s door. How much to never have to make tiresome chit-chat with your building’s valet again? From $4 million to $32.5 million.
But what if you’re an average Joe looking for a starter home or apartment and making the median household income of $49,900? If you’re looking to buy or rent a unit in a new building, you’re out of luck.
So many developers are focusing on luxury condominiums that there are almost no affordable options to be found.
I spent some time searching for new or pre-construction apartments that would work out to less than 33 percent of what the average household makes in Miami, roughly $1,300 a month for rent or $220,000 to $240,000 to purchase, depending on the down payment. Unfortunately, there was little, if any, new inventory that I could find that fits these parameters.
To double-check, I reached out to a Realtor who did a search in an MLS database and essentially reiterated what I had found. While she says it’s a struggle for many middle-income buyers to find a property they can afford, it was virtually “impossible” to find any new housing stock that would be within reach.
Why is there no shortage of luxury condos with stunning vistas, breathtaking lobbies and staggering price tags but so few options for middle-income buyers? There’s a few reasons for this disparity.
Miami’s land prices have skyrocketed in the past decade, particularly in desirable urban corridors. This means many developers have to charge more per unit to recoup their costs.
After the financial collapse, banks were wary of lending for new housing construction, and many developments in the city built after the crash catered to international investors with deep pockets who were likely looking for second homes or investment properties. Many of those properties either have broken ground recently, will soon be completed or just came online.
And, more obviously, there has been demand for luxury condos for the world’s wealthiest clientele, who have shown a desire to buy in Miami. Who could blame developers for meeting this demand with comically extravagant properties that reap enormous profit margins?
Unfortunately, this has created a massive problem for those who are hoping to find reasonably affordable apartments. As the upper end of the real-estate market reaches higher into the ultra-luxury stratosphere, more people will be priced out of new units, which will only get costlier to build over time.
Fortunately, there have been signs that Miami’s real-estate market is cooling down. Slowly but surely some developers have begun to create projects that are within reach of what a local middle-income buyer or renter might be able to afford. Some might stretch what constitutes affordable, such as $1,800 a month for a cozy studio in an upcoming downtown development geared toward millennials, but at least it’s a step in the right direction.
It will be a long time before greater Miami meets the need for new properties geared toward middle-income buyers. There’s little incentive to build reasonably priced units, and the city needs to work harder to prove to investors and developers that these are necessary and vital.
While these glitzy ultra-luxury towers are alluring and make a remarkable impression on our skyline, we need to stop making a priority out of housing that caters to plutocrats and oligarchs and create more housing opportunities that are accessible to the common Miamian.