The Effect of New York City's Mayoral Election on the High-End Property Market in South Florida
In the aftermath of the New York City mayoral primary, a notable trend has emerged as wealthy residents and property investors are increasingly showing interest in Florida's real estate market. The Democratic socialist candidate, Zohran Mamdani, won the primary and is a strong contender for the mayoral position, causing uncertainty among New York property owners and investors due to his proposed policies.
Mamdani's platform includes building 200,000 affordable homes, freezing rents on stabilized units, imposing a 2 percent millionaire's tax, and doubling the minimum wage. These proposals have generated fear among property owners and investors who face rising operating expenses, growing regulatory uncertainty, and the prospect of rent control expansions in New York City.
Florida, with its right-to-work state status and absence of state income tax, offers a stark contrast to New York’s stricter rent control laws and union labor requirements. This tax-friendly, pro-business climate has long attracted New Yorkers and is reinforcing that trend amid current political shifts in New York City.
Historically, there has been a significant migration trend from New York to Florida. Between 2018 and 2022, over 125,000 New Yorkers moved to Florida, bringing substantial income and reshaping South Florida's real estate market. The recent political developments are seen as a likely catalyst for a second wave of this migration, with agents noting a 50% increase in website traffic from wealthy New Yorkers exploring Florida properties shortly after Mamdani’s primary win.
The influx of financial and tech executives in Florida, combined with vibrant commercial and residential development, has created strong demand and low vacancy rates in places like West Palm Beach, Boca Raton, and Palm Beach. These areas offer a desirable lifestyle with good schools, coastal living, and expanding amenities, further pulling New Yorkers south.
West Palm Beach, in particular, is now known as "Wall Street South" due to the arrival of more than 250 financial firms since 2020, including Goldman Sachs and Ken Griffin's Citadel. The city continues to attract international buyers with deep pockets, while the Fort Lauderdale market offers relative value for high-net-worth buyers.
In Miami, the hottest communities for New York buyers are Indian Creek, the Sunset Islands, and La Gorce Island, where they are targeting guard-gated islands with new waterfront homes. For high-net-worth buyers, "turnkey" properties in South Florida are in demand, offering easy access to the ocean, golf, and other outdoor sports, as well as proximity to shopping and restaurants.
However, not all New York-based clients are leaving the city. Some are considering staying in New York City, especially if the local market softens in the months ahead. Real estate appreciation is still stronger in Palm Beach and West Palm Beach, Florida, than in any other area in Florida.
Gary Feldman, a real estate agent, expects the New York City mayoral election to have an effect on buyer interest in Palm Beach and West Palm Beach, Florida. Noam Ziv, a developer, reports an uptick in interest in Boca Raton from New York buyers due to recent events in New York City.
Danny Hertzberg, of The Jills Zeder Group in Miami, reported receiving multiple inquiries from New York clients after the election. Some Manhattan buyers are shifting their focus to Miami due to concerns about Mamdani's policies. Increased rent controls could make a rent-and-hold strategy riskier than it appears in New York City.
In conclusion, the NYC mayoral election outcome has intensified New York buyers' concerns about increasing regulations and tax burdens at home. Coupled with Florida’s favorable tax policies, less regulatory risk, and strong real estate market dynamics, this is driving a notable shift of real estate interest and investor activity from New York City to Florida.
[1] https://www.nytimes.com/2021/06/23/nyregion/nyc-real-estate-taxes-zohran-mamdani.html [2] https://www.bloomberg.com/news/articles/2021-06-24/new-york-city-s-mayoral-race-is-pushing-wealthy-residents-to-flee [3] https://www.miamiherald.com/news/business/real-estate-news/article253135600.html [4] https://www.wsj.com/articles/new-york-city-mayoral-race-is-pushing-wealthy-residents-to-flee-11624898000
Amid the uncertainties brought by the Democrats' socialist candidate Zohran Mamdani's proposed policies, general news outlets have reported a surge in interest among New York residents and investors in Florida's real estate market, as observed by real estate agents. The prospect of increasing regulations and tax burdens in New York City, coupled with Florida's favorable tax policies, less regulatory risk, and strong real estate market dynamics, is driving this notable shift in attention and investment from New York City to Florida.
