By: KeyCrew Media
A city’s economy works best when the workers who keep it running can also afford to live there, and maintaining that balance is where the real estate math truly matters.
The Millionaire Fallacy
The narrative around South Florida’s post-pandemic boom has largely centered on a single data point: wealthy individuals relocating from New York, California, and Illinois to take advantage of Florida’s lack of a state income tax. But Daniel Kaufman, Founder of Kaufman & Company, offers a broader perspective, pointing to a demographic dynamic that shapes the market’s economic foundation.
“For every one millionaire or billionaire who moves to South Florida to have another home so they don’t have to pay income taxes, five to ten people leave who are middle-class folks,” Kaufman says, “and that is really critical to how a city or how a region operates.”
According to Kaufman, the workers who sustain a functioning urban economy, including teachers, construction workers, hotel staff, restaurant workers, and maintenance personnel, are increasingly weighing affordability as they decide where to live. Insurance costs, property taxes, and the general cost of goods have risen, and wages in the region’s predominantly service-oriented economy have room to catch up. Kaufman notes that migration patterns are shifting, with Miami-Dade County now recording population losses and more residents leaving the region for other parts of Florida and the country than arriving from them.
Service Jobs Cannot Anchor a Real Estate Market
Kaufman’s central point is that the type of jobs being created determines whether housing demand is durable, particularly in the workforce and middle-market rental segments where his firm operates.
“You cannot have an economy fully based on service jobs,” Kaufman says. “You need a diversified economy with financial services, with biomedicine, with technology.”
South Florida still has an opportunity to make that transition, according to Kaufman. Many of the financial firms and technology companies that considered Miami have so far opened smaller satellite offices for tax or executive convenience, rather than the large employment campuses that generate sustained housing demand across income levels. Meanwhile, the hospitality, retail, and service sectors that dominate the regional economy produce wages that Kaufman believes must keep pace with the area’s rising cost of living.
This shapes conditions for rental property operators. High-wage tenants are still emerging in the local economy, many current tenants are cost-conscious, and the workers needed to operate and maintain rental properties are in high demand. Kaufman notes that immigration policy shifts have also influenced labor availability, as some workers have moved to states with different policies.
“If your teachers and doctors and construction workers and restaurant workers and hotel workers and maintenance workers are moving to other places because they can no longer afford it,” Kaufman says, “that’s the real metric to be looking at.”
The Wage Discount That Compounds the Problem
One of the more nuanced dynamics Kaufman identifies is the wage adjustment that some employers apply to employees who relocate to or work from South Florida offices. Because the region is viewed as a lifestyle destination, some companies offer different compensation to employees based there.
“Many companies, when you work remote or move to the Miami office or South Florida office, won’t pay you the same as you were making in another city,” Kaufman says.
This influences affordability. Workers who relocate to South Florida may earn less than they did in their origin market while facing higher housing, insurance, and goods costs. The result is a tenant base that Kaufman describes as financially mindful in ways that show up in concession rates and absorption trends. He notes that some South Florida rental properties now offer three or more months of free rent, a sign that renters currently have attractive options to choose from.
Kaufman contrasts this with Dallas, where companies including Goldman Sachs and JPMorgan Chase have built or are building large campuses that employ thousands of high-paid professionals. In those markets, high-wage job creation generates multiplier effects, the ancillary employment in retail, food service, and construction that a healthy economy thrives on.
“High-paying job means a high income, which means they need a place to live and they’re willing to pay more for it,” Kaufman says. “And for every person that does that, then there are the ancillary jobs that are created.”
Where the Capital Is Going Instead
Having repositioned out of South Florida over the past three years, selling land parcels, exiting joint ventures, and pausing new construction, Kaufman’s firm has redirected capital toward markets that meet its high-wage job creation threshold. The firm currently has three active projects in Jacksonville, which Kaufman describes as offering the cost structure and growth dynamics that South Florida provided years ago: lower land costs, lower labor costs, and measurable population growth.
Through its LandBriefing platform, the firm has identified a cluster of secondary markets where specific large-scale employer investments are driving wage and population growth. Kaufman ranks Syracuse, New York; Hartford, Connecticut; Rochester, New York; New Haven, Connecticut; Huntsville, Alabama; and Columbus, Ohio among its top opportunities. Huntsville is seeing roughly 3% annual job growth, by the firm’s reading of the market, driven by aerospace investment from Blue Origin and others, and U.S. Space Command is relocating its permanent headquarters to Redstone Arsenal there. Columbus is absorbing Intel’s semiconductor investment in New Albany, now valued at $28 billion, which the company expects to create 3,000 Intel jobs and 7,000 construction jobs. Syracuse is benefiting from Micron’s $100 billion chip fabrication complex, which broke ground in nearby Clay in January 2026.
These are high-wage manufacturing, technology, and engineering employment bases that Kaufman argues will generate durable rental demand. Home prices in Syracuse have risen 48.5% since 2021, according to Kaufman’s data, a signal he reads as favorable for rental operators, since rising home prices encourage more residents to rent.
“That’s what you follow,” Kaufman says. “You look at where job growth and population growth are happening.”
For renters and buyers evaluating South Florida, Kaufman’s development framework suggests a specific test: not whether wealthy people are arriving, but whether the local economy produces enough middle-income jobs to sustain the services, labor, and tenant base that make a market thrive over time.
Daniel Kaufman is the founder of Kaufman & Company, a Los Angeles-based private investment and holding firm with portfolio companies spanning real estate development, workforce housing, venture investment, and infrastructure. His workforce housing platform, Oldivai, focuses on delivering attainable housing in undersupplied markets across the United States.
Disclaimer: This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
