Potential solutions for the ‘Fantasy Island’ issues on Key Biscayne
In the June 4 issue of Islander News, I talked about the things that make Key Biscayne a “fantasy island” of wrongheaded priorities and thinking. This week we offer some solutions.
So, what can be done to save our thriving, affluent community from becoming a “has been” community? If you do not think that can happen, take a look at the histories of North Beach, Surfside, Hollywood Beach, Pompano, etc. This can happen when the demographic who flocked to buy and rent the community no longer does so or has less money to spend.
Those towns stuck with the northeasterners who had been their primary target market, to the detriment of the towns because Hispanic buyers supplanted them in other parts of South Florida. The towns that catered to the NE clientele were left behind.
Those beach-oriented municipalities are now starting to see a revitalization because their primary purchasing group is returning with more financial strength than in the past.
What is afflicting Key Biscayne is the same thing in reverse. Key Biscayne’s motto should be “Live by the Latin American market, die by the Latin American market.” There is hope if our government and business community are aware of the issue and act to overcome our communal challenges. The fix is within our reach. We must:
Lessen our hope for the return of wealthy Latin American buyers. They all want to come here, but many need to get visas and anyone with real money is already here. Latin American currencies will probably continue to decline in value as:
- The political situation becomes worse.
- Latin American currencies rely on oil and commodity prices that are under pressure from lack of demand.
- The economic strength behind the currency is under threat.
- To combat COVID-19 those countries will print more currency, devaluing it further,
Europe and Canada are having similar problems and will not be the secondary feeder markets they have been, which from time to time took up the slack of other markets.
The Key Biscayne property market has been sinking along with the currencies of the countries our Hispanic-centric market has relied on. The dream of Asian buyers flocking in will not pan out given current political tensions, and that Asia is simply too far away, with no nonstop flight from Miami.
There are and will continue to be fewer visas handed out, further limiting our market to rely on foreigners to buy properties.
Banking regulations and the use of foreign shell companies to hide the identity of buyers have been restricted.
Recognize that Florida has always benefited from migration from the Northeast, from the time of Henry Flagler to now. That has always been the primary market, except when outbid and displaced by foreigners with flight capital. That has now reversed and this change will continue to accelerate because:
The 2018 Tax Reform act eliminated the deduction of state and local taxes from income that is federally taxed. As a result, it costs 8% to 20% more to live in Blue States (Democratically run) states such as New York, New Jersey, Connecticut, California, Pennsylvania, Massachusetts, Illinois, etc. (about 38% of the US population). Florida is one of three states with no state income tax or inheritance tax; one of the two Red States (Republican run) that are attracting wealthy tax refugees who can move quickly from one part of the US to another.
COVID-19 has magnified the Blue/Red divide because of the seemingly better management of Florida compared to NY, with fewer deaths and fewer restrictions along with greater personal freedoms. When people are permitted to move, they will come to Florida, but mainly to where they have friends. That places Key Biscayne at a disadvantage since we currently have only a small percentage of northeasterners.
Climate is important, but now more so since it is thought there is less COVID-19 in warmer areas. Even if this is a myth, people believe it and will be more attracted to warm places.
In general, few in the Northeast, Midwest or Pacific Coast states know where Key Biscayne is, what it has to offer, or if it’s attractive and worth looking into. I am regularly asked how far Key Biscayne is from Key West. This lack of knowledge is because:
- The Miami Open tennis tournament is gone.
- The key is about built-out, meaning there is no new condo project being advertised and bringing attention to Key Biscayne. Values were maintained or grew when Oceana, Ocean Club, Grand Bay etc. were found in airline magazines, Wall Street Journal etc. People have short memories.
- The Hispanic-centric nature of the key has driven many Anglos to move to Palm Beach or Martin County and other places that feel familiar to them.
- Our meager commercial component puts us at a disadvantage to Miami Beach, Miami and Coral Gables, which have more substantial retail and office components.
If our leaders buy into the above, something should be done about it right away. Begin by either disbanding and replacing the Chamber of Commerce, or bypassing them with a targeted program to attract new potential residents who have the financial resources to purchase expensive properties. This task has been left to Realtors, whose resources are stretched thin. It can be undertaken under the guise of economic development, for which there is county, state and federal funding to bolster what the village commits.
I suggest undertaking a public relations and advertising campaign to sing the praises of Key Biscayne as Miami’s Island Paradise.
In addition, on a parallel track, the village should apply for funding for economic development from one of the federal packages. We should also apply to the state and county for funding.
But even if there are no other funding sources, Key Biscayne should find the funds to publicize and support its tax base.