Florida is growing – and fast. The Sunshine State experienced the highest level of net domestic migration in 2018, according to U.S. Census data, and all signs indicate that trend has intensified amidst the COVID-19 pandemic, with more than 1,000 people moving to the state each day in 2020. It’s easy to chalk this growth up to sunny skies and white sand beaches, but several other factors are compelling companies and individuals to head south.
SMS is on the front lines of the effort to recruit new businesses to South Florida through our representation of the Miami Downtown Development Authority (DDA). The agency has been making a direct appeal to finance and technology firms since 2013, when the Wall Street Journal declared that Miami was poised to put a dent in New York’s financial sector dominance. Since then, Miami has seen a steady stream of companies head south, with investment managers Carl Icahn, Barry Sternlicht, and Ken Griffin among them.
Now, as Miami embarks on an economic recovery, the DDA is casting a wider net. This month’s launch of the DDA’s Follow The Sun campaign is offering up to $150,000 in incentives for businesses that relocate to Downtown Miami and create high wage jobs over a three year period. The incentives, along with the DDA’s direct outreach to out-of-market businesses and our firm’s targeted media, marketing and social media blitz, is making the case that there’s never been a better time to make the move to Miami. Read Bloomberg’s coverage of the campaign here.
Sun and surf aside, here are three factors bolstering Miami’s appeal:
- For starters, Florida is one of only seven U.S. states without a state income tax. That means a Florida resident earning $1 million in Miami takes home $640,000 after taxes, while the same person nets $535,000 in New York, $590,000 in Illinois, and $532,000 in California.
- Compounding the tax advantages of living in Florida, there are a number of controversial proposals in motion nationally which are threatening to significantly raise taxes on high wage earners in places like New York, Illinois and California, where legislators are pushing to raise the top tax bracket to 54 percent.
- Third, the COVID-19 pandemic has caused the average number of remote work days to more than double in the past year. As companies pivot to remote work, their executives and employees are migrating to places with lower taxes and improved lifestyles. This has helped fuel a surge of home sales in South Florida, with pending purchases in Miami up 18.5% year over year.
“Our team at the Miami DDA has spent years engaging companies and executives looking to expand or relocate to Miami in pursuit of great weather, low taxes, and a better lifestyle,” explains Miami DDA Enterprise Committee Co-Chair Nitin Motwani told the South Florida Business Journal. “The pandemic, coupled with unbearable tax policies in many cities, is enticing more people to Downtown Miami each day and we have every reason to believe that activity will continue into 2021 and beyond.”
The Follow The Sun campaign is also aiming for companies in growth mode. Miami has emerged as a top market for talent recruitment and business growth, particularly in the finance sector. The City’s urban core has seen 50% population growth since 2010 (100,000 people now reside in the district), the number of Registered Investment Advisors in the area doubled from 2014 to 2019, and total Assets Under Management in Downtown now top $75 billion, a 61% increase over 5 years.
The trend is showing no sign of slowing down. The list of companies that have relocated or expanded to Downtown Miami from outside the market this year include Nucleus Research, a financial analytics firm moving its 15-person headquarters from Boston; ShiftPixy, a publicly-traded technology company that is moving 50 employees from California; Boston Private, a wealth management firm that expanded to Miami with plans to hire 20 people; and Payless, which relocated its corporate headquarters from Kansas.
Nucleus Research CEO Ian Campbell summed up his decision to relocate to Downtown Miami from Boston earlier this year, “We’ve been in business for 20 years and could have moved our offices anywhere. The strong business environment along with a growing number of financial and tech companies already in South Florida made Miami a logical choice. We polled our employees and there was a shared sense that the city would be a great fit for our company culture. Since arriving in Miami, we’ve embraced the city’s diverse talent pool, the urban vibe of Downtown, the business-friendly climate, and of course, the idea of life without state or local taxes.”