We can’t prosper with the pattern of house-poor Miamians

As billionaire newcomers moving to Miami spend as much as $100 million for a home, the average area household is spending a far larger percentage of its income on housing than families do in any other large metro area.

In fact, Miami metro residents now use 40% of their expenditures for housing, data unveiled last week by the U.S. Bureau of Labor Statistics show. Put an exclamation mark on that figure.

The rule of financial health once was to spend no more than 30% of your income on housing. Some experts suggested even less. Today, recommendations have edged up – but 40%? That’s a financial noose around a family’s neck.

That percentage of expenditures needed for Miami area housing is forcing workers to live farther and farther from their jobs in quest of housing they can afford. That leads to intolerably long commutes, eating up precious hours every day.

Some workers flee to live and work in more rural areas where lower paychecks are more than compensated for by housing affordability. While that’s economically healthy for those individuals, loss of workforce is far from healthy for our vibrant community – a loss made greater by fears of immigration enforcement that for many people become reality.

The 40% figure for housing headlines a new study of consumer expenditures in 2023 and 2024 in the Miami metropolitan statistical area, which includes Miami-Dade, Broward and Palm Beach counties, where average household spending annually was $64,027. That means an average household spent $25,610 on housing, or $2,134 per month.

Look at the heart of Miami-Dade County: how many good residences are available at $2,134 per month? Certainly not enough to support our workforce. 

And look at our community in terms of money that our working families actually have to spend each year.

Of the 22 major metropolitan areas, the highest annual consumer expenditure averaged $117,578 in San Francisco. The average in those 22 areas was $77,907. The lowest was $64,027 – in Miami.

That’s right: Miami, the region with the lowest amount available for spending, used the largest percentage of its consumer expenditures for housing.

The national average housing expenditure in our biggest metropolitan areas was 33.2%. Only St. Louis, at 29.1%, was under the 30% line that experts used to call the maximum for housing. Next lowest were Baltimore at 30.7%, Detroit at 31.3% and Phoenix at 31.4%.

Miami at 40% was by far highest, followed by New York at 38.2% and Tampa at 37.8%. 

Do you remember when Florida was a low-cost state and New York was at the opposite end of the spectrum? When I moved from Manhattan to Miami, I paid about the same rent for a bayfront two-bedroom as I’d paid in Manhattan to garage my car. How times have changed – and, at least in the case of workforce housing, for the worse.

It’s true too, unfortunately, that Miami paychecks haven’t grown with housing costs. The Bureau of Labor Statistics found that average household income before taxes across the nation in 2023-2024 was $103,012. In the Miami metro area it was $89,053.

As Miamians spend relatively lower incomes, they also spend a larger percentage on transportation than in the other big metro areas, 18% here – averaging $11,540 – versus 17% elsewhere.

That leads to the unfortunate fact that as Miamians had to live farther from work to be able to afford housing, they also spent more as a percentage of their incomes to reach those jobs. That’s the dilemma for Miami: how to quickly add housing that the workforce can afford and how to add the mass transit to get people there affordably. Our local governments wrestle with the issue every day, but progress lags behind increased needs.

That’s one reason a local developer is adding housing in a new luxury tower for the key workers who will keep that tower functioning. We need that kind of thinking far more broadly – the concept, as the developer puts it, of doing well by doing good.

With Miamians spending larger shares of budgets on housing and transportation than the rest of the nation, they’re left with smaller shares of their funds to spend in other ways – so Miami is behind the national average in percentage spent in every other category, making us house poor.

While metropolitan residents nationally used 12.9% of expenditures for food, Miami-area households spent 11.5%. We spent $5,331 on average for food at home – 72.1% of our food dollars – and $2,064 (27.9%) to eat out. Nationally, the average household used 60.9% of its food dollars at home and 39.1% away from home.

Miamians used 7% of expenditures for healthcare, the nation 8%. We spent 3.5% for entertainment, the nation 4.6%. We used 11.8% for personal insurance and pensions – or $7,563 – while the nation spend $9,677, or 12.4%. Being house poor costs us by limiting other choices.

The billionaires moving in aren’t going to drive up housing costs for the rest of us – they’re in a whole new league that would have been unimaginable a few years ago. But the glitter of wealth levels once reserved for royalty can distract our focus from the needs that weigh down too many Miamians: the shortage of affordable housing and the transportation to get there.

Public, business and civic sectors need to redouble efforts to chip away faster at the anchor of housing and transportation burdens that are pulling down our residents. We can’t afford to hollow out the core of Miami’s working community.