New data suggests South Florida has lost its reputation as the budget-friendly alternative to New York City. But some of the biggest names in real estate development say that conclusion misses the bigger picture.What the data shows
What the Data Shows
According to Fox Business, a recent Bloomberg analysis of Bureau of Economic Analysis figures found that overall living costs in the Miami-Fort Lauderdale-West Palm Beach region have now overtaken those of the greater New York area. That same analysis pegged South Florida housing costs at roughly 5% above New York and its suburbs.
The inflation numbers back up the shift. Consumer prices in South Florida have climbed 36% since 2019, the second-steepest increase among major U.S. metros, behind only Tampa. Home prices in the region are up 79% since the pandemic began, and Florida homeowners now pay an average annual insurance premium above $8,000, roughly four times what New Yorkers pay on average.
Developers Push Back
Despite those figures, executives behind some of the largest residential towers going up in both cities argue Miami is simply catching up after decades of being undervalued.
Danielle Naftali, an executive vice president at Naftali Group, told Fox Business that Miami’s rising costs reflect its transformation into a full-time global city rather than a seasonal escape, pointing to new cultural institutions, restaurants, and hospitality brands that have arrived alongside the population growth.
Ryan Shear, managing partner at PMG, made a similar case, noting that Miami real estate historically traded well below comparable markets like New York, London, or Los Angeles, and is only now closing that gap.
Both developers argue that buyers today are less focused on price per square foot and more interested in lifestyle, amenities, and long-term value, a shift they say justifies the premium.
The Tax Argument
The clearest edge Florida still holds, developers say, is taxes. Florida remains one of nine states with no personal income tax, while New York City’s top earners face a combined state and local rate approaching 14.8%.
Shear was blunt about the math, telling Fox Business that top-bracket earners in New York can face effective tax rates between 50% and 55% depending on the borough, while Florida residents answer only to federal tax rates since there is no state or city income tax layered on top.
He also pushed back on the idea that rising property tax bills reflect a changing tax rate, arguing instead that it is the value of the real estate itself that has climbed, not the rate applied to it. Still, ATTOM data shows Miami-area property taxes have jumped 62% since 2019, and Florida voters will decide in November whether to exempt the first $250,000 of a home’s value from non-school property taxes.
Building Costs and Corporate Migration
Beyond homebuyer economics, Shear pointed out that construction costs still favor Florida. Building a high-rise remains significantly cheaper in the state than in New York, he said, even though financing costs are roughly the same nationwide since banks lend across state lines.
He also highlighted a shift in the kind of companies relocating south, saying it is no longer just satellite offices moving to Miami but full corporate headquarters, PMG’s own included. That kind of relocation, he argued, signals a more permanent economic shift rather than a temporary trend.
A Question of Priorities
Census data shows the Miami metro area’s median household income sat at $80,625 in 2024, slightly below the national median. Developers acknowledge the affordability gap for middle-income residents but maintain that for the buyers driving their projects, the calculation goes well beyond price per square foot.
As Shear put it to Fox Business, people are increasingly asking themselves where they actually want to spend their lives, weighing factors like weather, work-life balance, and culture alongside the tax savings. In his view, that broader appeal, not just the bottom line, is what keeps drawing people and companies to South Florida.
Source: Fox Business
