Edgewater employers face hiring woes as residents exit pricey Miami neighborhood

Franco Hernandez and his business partner Beto Pellegrino bet on Edgewater in 2016 when they co-opened their salon on a corner of the Miami bayfront neighborhood. Hernandez said they assumed the area’s steady stream of new residents would translate into a continuous flow of clients.

“Edgewater has always been a growing community. We saw that Edgewater could become as big as Brickell, but not as expensive. That’s what we thought,” said Hernandez, co-founder of Elite Styles Salon and Med Spa on the corner of Northeast Second Avenue and Northeast 25th Street.

Today, the median home rental prices in Edgewater outpace Miami’s popular financial district Brickell, ranking as the second most expensive rental market in Miami-Dade County. That’s because the neighborhood has an influx of new wealthy people, following the migration of finance and technology firms expanding to Miami during the pandemic. Hernandez sees newcomers from across the country, including Chicago and New York.

The one big problem? He needs more hands on deck than his 22-member staff. He increased wages to between $13 and $17 an hour, up from between $12 and $13 hourly last year to retain and hire new talent.

But staff rarely stay long, blaming escalating apartment rental prices in Edgewater, Brickell, downtown Miami and Little Havana. His biggest competitors today for workers? Davie, Tampa and St. Petersburg — communities where, Hernandez said, staff members are moving to in search of more attainable housing and a lower cost of living.

“All of the places that are nearby us are expensive,” Hernandez said. “How do we fill positions with people that are not willing to live here?”

Edgewater’s rising cost of living exemplifies the burden of a countywide housing affordability crisis on employers.

The heads of Edgewater businesses Elite Styles, Bay Oaks Historic Retirement Residence and La Latina say essential workers are leaving the area in search of communities with cheaper housing and lower cost of living. Business owners fear these departures will hurt their bottom line and their ability to serve the community.

“I am concerned that it’s going to be hard to find employees in the next five years,” said Kathryn Moore, administrator of the nonprofit Bay Oaks Historic Retirement Residence at 435 NE 34th St.

Rents continue to rise in the neighborhood next to Wynwood since at least 2019, according to data from the Multiple Listing Service and Ana Bozovic, real estate market analyst and founder of Analytics Miami. One of the Edgewater ZIP codes 33137 had a median rent of $3,050 a month last year, up from $2,558 in 2020 and $2,550 in 2019.

The median rent in Edgewater far outpaces the county’s median rent of $1,600 a month. Rents have risen as much as 30% year-over-year since the pandemic. Given the runaway housing costs, both the city and county have declared a state of emergency over the housing crisis. County leaders made their declaration Friday, as a first step to tackling the problem. However, real estate experts and housing advocates were quick to point out the action was a response to a dire situation rather than a long-term solution.

The soaring rents are a result of demand from new arrivals from across the Northeast and Edgewater’s location in Miami. Newcomers are drawn to the community for its 5-to-15-minute car ride from employment hubs Brickell, downtown Miami and Wynwood, the preferred locations for many expanding tech and finance firms.

Developers continue to buy existing buildings in Edgewater and other up-and-coming neighborhoods with plans to replace the structures with new market-rate or luxury housing, or to renovate and hike rents. The situation has left hundreds of tenants in transition and searching for housing, including at Hamilton on the Bay and in a boutique building — now demolished — across from the retirement residence where Moore works.

“We are destroying regular rental housing,” she said. “We’re replacing it with new housing and not equal (amounts of) workforce housing.”

Rodrigo Diambonda, owner of his downtown Miami-based hospitality and valet company Miyayo Parking, noticed the evolution of the neighborhood last year. He first rented in Edgewater in 2013 at the Opera Tower where he paid $1,400 a month for a one-bedroom unit until 2015. After returning from renting a single-family home with four bedrooms in Hialeah for $4,000 a month, he moved back to Edgewater last February and lives in Quantum on the Bay. He pays $2,100 monthly for a one-bedroom condominium facing Margaret Pace Park, up from $1,900 last year.

“I’m worried what rent will be like next year,” Diambonda said. As a new father, Diambonda worries whether he can afford to pay more.

“I feel stuck,” he said, “Everything that’s going on feels like a movie.”

The affluent residents present a double-edged sword to business owners like Alejandro Diaz Siso, co-owner and managing partner of the Venezuelan restaurant La Latina at 3509 NE Second Ave.

“All of a sudden Miami is a hot spot. It’s great for us. In theory, we should reap the benefits of Miami’s newfound attractiveness,” Siso said. “In this case, it’s coming with greater challenges than benefits. The cost is becoming very high. The influx of people is causing rents to increase too much.”

La Latina raised wages for staff, which include cashiers and cooks. Employees earned between $9 and $14 an hour in March 2021. Now, they make between $10 and $15 hourly. Siso said he’s thinking about increasing wages yet again given inflation.

“People who had a job working 40 hours a week have never had this much trouble making ends meet,” he said.

While La Latina ate the cost of inflation in recent months, food prices are likely to go up in the summer. But Siso said he fears raising prices may scare some customers away, wondering how much more customers are willing to pay for an arepa.

Customers also will have to pay more in Edgewater for a haircut and styling. At Elite Styles, prices are expected to rise starting in the summer — a woman’s haircut, for example, likely will start at $85, up from $65.

“We’re going to have to increase prices because that’s the only way we are going to cover expenses with rents up. I’m concerned that we will lose clients,” Hernandez said. “I’m confident that some people would be willing to pay the price, but I feel terrible for our regulars.”

One solution? More affordable and workforce housing near neighborhoods considered employment centers, said Michael Liu, director of the Miami-Dade County Public Housing and Community Development Department. Finance and tech firms expanding to the area can also play a role by creating housing for their employees. Companies can “subsidize their housing costs or create funds to build housing,” he said.

“It has occurred in Washington, D.C., and Northern California,” Liu said. “If we can increase the supply, it helps everybody. It relieves the demand.”

Edgewater renter Diambonda has another idea — lock in rent contracts for two- to three-year terms. He said, “I have been moving a lot, because landlords have been changing prices. I want two to three years to secure the price so that we can see ourselves here and take the time to save money.”

Correction: An earlier version of this story gave an incorrect surname and title to Kathryn Moore. She is the administrator for Bay Oaks Historic Retirement Residence.

This story was originally published April 10, 2022 at 6:30 AM.