Shrinking Middle: Do you earn enough to be Miami’s middle-class? Why it may not matter | Opinion

Are you middle class? Most importantly, what does it mean to be middle class in Miami-Dade County?

There’s an easy way to answer — and a more difficult one.

Middle class usually means those who fall in the middle of the income spectrum. Researchers will measure it in different ways. The Brookings Institution defines the middle class as the 30% of households earning above and below the area median income.

In Miami-Dade, middle-class households make $52,700 to $142,000 and, in Broward, $55,000 to $144,000, according to 2022 data compiled by Maria Ilcheva, a researcher and assistant director of planning and operations at Florida International University’s Metropolitan Center.

You might fall within that wide income range but feel that a middle-class lifestyle is beyond reach. That’s because being middle class means more than numbers.

“I think middle class is more about choice,” Ilcheva told the Herald Editorial Board. “Having a certain status affords you the ability to choose between different options.“

Choice means how you allocate your money: Do you prefer to rent or own; are you sending your kids to college; investing, traveling, donating to charity?

If your income allows you to make such choices, congratulations. You’re probably middle class. But, many South Florida residents feel the choices available to them don’t allow for a middle-class lifestyle.

The area is increasingly becoming a place only the wealthy who have moved from places like New York can afford. The Shrinking Middle — the title of a series of editorials that will explore the impact of the housing crisis on the middle class — is about more than the decreasing number of Americans who fall within the middle class over the decades.

“When we talk about the shrinking of the middle class, it is the shrinking of the choices that people can make within these categories,” Ilcheva said.

The region’s housing affordability crisis — and the costs of homeowners’ and auto insurance, plus rising condo and HOA fees — has eaten into the options middle-class Miamians have. Between 2019 and 2023, the cost of homeownership in Miami-Dade went up by 62% and the cost of renting by 55%, according to information from Zillow provided by Robin Bachin, associate professor at the University of Miami.

Wages also have gone up, but they have not kept up.

The consequences of this crisis affect us all, including workers, often skilled ones South Florida’s economy needs. What happens if too many choose to leave?

Conversely, the rising cost of living is forcing middle-class residents to make tough choices: to move, to live with their parents further into adulthood or to forego the dream of home ownership. Among those who shared their stories with the Editorial Board: A North Miami woman in her 30s, making close to $80,000 a year, who downsized from a two to a one-bedroom apartment to live with her teenage daughter after her rent went up by $750. A Little Havana artist in her 40s who finally saved enough for a down payment on a home but cannot find anything affordable.

This puts things into perspective: The annual “survival” budget, the estimated minimum a Miami-Dade family of four needs to afford basic necessities, is nearly $76,300, according to the 2023 ALICE Report by United Way. That’s beyond the reach of part of the middle class, not to mention the low-wage workers who work in South Florida’s restaurants, hotels and other jobs.

Still, according to Ilcheva, that $76,300 is a conservative estimate.

Here’s another reality check: Individual situations vary but even Miami’s “upper” middle-class households — those making around $142,000 — will struggle to buy a single-family home at the median price of $657,000. Not if they follow the recommendation to not spend more than three times and a half of their annual salary on the total value of a home.

That’s one of the reasons people who are technically “well off” feel they are falling behind. The other is the rising cost of homeowners’ insurance; Floridians paid the highest premiums in the nation in May.

Having a career and a six-figure income might not be enough to cover those costs.

Jorge Garcia, a 59-year-old financial analyst, and his wife make almost $140,000 annually. They are considering leaving West Kendall, where they bought a home in 2005, for Nashville or North Carolina because of rising insurance premiums and taxes.

“I have raised my family here and I feel like I can’t live here anymore, and I don’t think that my kids can do it under the circumstances,” Garcia said.

Garcia is originally from Puerto Rico. South Florida was built by people like him, who moved here from other places and countries seeking the dream of a better, easier life.

Life might be sunny for the high earners who recently moved here, but it is anything but easy for a middle class that’s being left without choices.

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This story was originally published July 25, 2024 at 5:00 AM.