Op-Ed

Greater Miami must confront income gap

PÉREZ
PÉREZ

Jorge Pérez, chairman, CEO and founder of the Miami-based Related Group, addressed more than 500 business leaders April 2 at The Beacon Awards where he received the Jay Malina Award for his leadership and contributions to Miami-Dade’s economy. His remarks, excerpted here, received a standing ovation and highlighted opportunities for and challenges to continued growth and prosperity in Miami-Dade.

Jay Malina was a visionary community leader. For him, it was not only about jobs but how the economic-development engine helps people’s lives and improves our city as a world-class center. In my talks with him, it was always not only about targeting business sectors where we could succeed in recruitment, but about combining business with a social consciousness. This is what makes this award truly special.

My business is real estate and the creation of livable and sustainable cities. When I look at the fantastic growth we have experienced over the last decade, I still feel a great concern about two things in particular: one is that we are probably the city with the greatest percentage of foreign buyers, particularly in the urban core.

In sharp contrast with New York, Atlanta, Chicago, San Francisco, Los Angeles and other major U.S. cities, around two-thirds of our urban condominium sales are to foreigners.

While this speaks well about Miami’s continued perception as a great international center, it also tells us that most of our professional middle class, who want to live in the urban center to be close to jobs, restaurants, shopping and cultural facilities, can’t afford most of what is being built. And, this is not because of our high prices, as urban high-rises in Miami are cheaper than in comparable cities like Chicago, New York, Los Angeles and San Francisco.

The huge demand for rental properties and the high occupancy rates attest to the growing desire by the professional class to live downtown. Unfortunately, they are being priced out of homeownership and are left with renting as their only alternative.

The second problem that concerns me is the fact that while we continue to promote the concept of the 24-hour city where people can live, play and work without the use of the automobile, Miami is becoming more and more a 24-hour city — but only for the wealthy. Moderate- and low-income households are being totally priced out of not only the condominium but also the rental market. With urban rents now reaching $3/ft, affordability has become a huge issue.

If this trend continues we will force all those lower-income households that work in the urban center into long commutes and become a city of the rich and the lucky poor that manage to obtain the few available public subsidies. Already, Miami has become one of the cities with the greatest income disparity.

While there are a number of ways to combat this problem, the most important is attracting new, high-paying jobs to Miami. That is precisely the role of The Beacon Council. We need to redouble our efforts of aggressively going out and searching for firms considering relocation. We have a bi- and trilingual population that is unmatched anywhere.

We are also blessed with the most strategic location at the center of the Americas. A beautiful geography and year-round favorable climate round off our comparative advantages.

Both the public and private sectors need to work more closely and contribute and invest much more than we presently are in our schools and universities, transportation systems and cultural facilities. Without major private and public investments in these three key areas, it will be extremely difficult to attract the types of companies that will provide us with the necessary high-paying jobs.

We are a very young city with a powerful spirit that aspires to greatness. To get there, every one of us needs to give more of both our time and money. We must all help in making those, many times, unpopular decisions that seem costly and hard now but that are essential for our future. It is up to each one of us to think less about instant personal gratification and more about a lasting community legacy.

As Miami leaders, I am sure all of us here will be up to the challenge.

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