For the past decade, South Florida’s politicians and development officials have fanned dreams — which long felt like delusions — of the region reinventing itself as some sort of “Wall Street South.” Since the pandemic upended migration patterns in early 2020, a series of big developments have breathed new life into that story:
- Billionaire Ken Griffin moved his hedge fund and market-making businesses, Citadel and Citadel Securities, to Miami from Chicago.
- Paul Singer’s Elliott Management shifted its headquarters to West Palm Beach.
- And Blackstone Inc., Thoma Bravo, Founders Fund, Point72 and Goldman Sachs Group Inc. among others set up new outposts in the Miami to West Palm Beach corridor.
Those moves are building a legitimate foundation for the finance and investment scene, and Griffin has turned into one of the region’s most vocal hype guys. “We’ll see how big Wall Street South becomes,” he said in an interview Tuesday with Bloomberg’s Sonali Basak at the Citadel Securities Global Macro Conference in Miami. “We’re on Brickell Bay, and maybe in 50 years it will be Brickell Bay North how we refer to New York in finance.” (To be clear, “maybe” is doing a lot of work in that sentence.)
As Griffin must recognize, the area still has a ways to go to become a top finance center. The entire state of Florida has just about 2% of the nation’s regulatory assets under management (even though it has nearly 7% of the country’s population .) Would-be transplants worry that Wall Street South is just a fad, and they’re unsure what a move would mean in the long-run for their families and career prospects.
If Miami’s serious about maintaining its recent momentum in global finance, here’s what the authorities should do.
No. 1: Address the Traffic Crisis
The Miami area loves its cars, and public transportation has never been a great alternative. Some four decades after opening for business, Miami-Dade’s intracounty rail system, Metrorail, has limited coverage and is used by only a fraction of the city’s workers.1 While some of that is just a reflection of Florida’s “car culture,” it’s also a natural consequence of a system that isn’t large or interconnected enough to work for most people, so Miami has a horrible traffic problem as a consequence. According to data from Inrix, drivers in Greater Miami lose an average of 105 hours a year in traffic (worse than Los Angeles but not quite as bad as New York City) at an economic cost of around $4.5 billion. It’s unrealistic, impractical and risky to call for a massive rail expansion at this point, so what can actually be done?
Metrorail advocates are seemingly getting closer to the realization of a Northeast extension, starting construction as soon as 2025, and a new bus rapid transit system is scheduled to speed up access to south Miami-Dade County. For longer distances and less price-sensitive commuters, the privately run Brightline train has been adding stops between Miami and Orlando. These projects are a solid start, but officials should continue to secure funding for new routes and pair that with incentives to walk and bike around town (the new Underline urban trail may help.)
Miami should also consider ways to take advantage of its waterways, Richard Florida, a professor at the University of Toronto and the co-founder of what is now Bloomberg CityLab, told me. Would ferries or water taxis lighten up traffic? He also suggested thinking more about the viability of congestion fees to control the number of cars on the road. At the same time, city planners should encourage the construction of neighborhoods where people can live, work and shop without having to drive. “Part of the solution is transit, but I think part of the solution is developing stronger mixed-use neighborhoods,” Florida said.
Not all of these proposals will have a direct impact on Wall Street South migrants. It’s probably not likely that many Citadel employees would choose to ride the new bus system, for instance. But with many working-class residents priced out of the urban core, regional leaders have a moral and practical responsibility to help them get from far-flung working-class enclaves to their downtown jobs quickly and affordably. If it reduces traffic at the margin, everyone will benefit.
No. 2: Invest in Climate Resiliency
South Florida’s local governments need to aggressively push ahead with climate adaptation plans. The authorities have made the right overtures — including tapping the bond market for climate projects — but they must make sure they’re investing for the long haul, not just making short-term fixes related to the nuisance flood issues and hurricane hazards that are already here.
Governments must continue the massive project of elevating key infrastructure and updating codes so that any new homes and businesses are effectively bunkers against flood and wind. Failing to do so could deter financial institutions from building out their offices and luring staff to South Florida.
Those investments aren’t just necessary for the region’s long-run survival; they’re paying dividends to homeowners now. A new study by University of Miami researchers Renato Molina and David L. Kelly found that homes and condos within 200 meters of new climate infrastructure projects saw a related bump in price.
Short-term fixes such as pumps to address existing flooding are important, but so is a long-run strategic vision, according to Alec Bogdanoff, co-founder of Brizaga, which advises corporate and municipal clients on climate change.
“You go into an emergency room and you’re bleeding profusely, they don’t say, ‘Hey we need to get that high blood pressure or cholesterol under control,’” Bogdanoff told my recently. “We need to fix the most immediate problem, which for most of our communities is the flooding happening now. But that doesn’t preclude us from having a long-term plan for the future.”
No. 3: Improve Education
To hear many Northeast elites tell it, South Florida’s schools just aren’t good enough for their Ivy League-bound children — and for many of them, that’s the biggest dealbreaker of all. To be sure, some of the criticism isn’t entirely fair, but there are clearly grains of truth behind it, and officials and school leaders must demonstrate continued progress in education to upend the stereotype.
For a district the size of Miami-Dade County Public Schools, it actually gets decent marks in many areas, but it continues to have a student-teacher ratio (about 19:1, according to the National Center for Education Statistics) that is worse than both state and national averages.
Realistically, Wall Street titans may be more concerned about the availability of seats at elite private schools. The Miami metro area has quite a few very good private schools, but it doesn’t have many great ones — the kinds of places you associate with a near-automatic ticket to the most elite colleges and universities. Of 16 schools on Webster Pacific’s proprietary list of top private schools in greater Miami, only 13% (that is to say, only Ransom Everglades and Pine Crest) had average SAT scores of 1400 or higher; the latter can be more than an hour from downtown Miami or Miami Beach with traffic. By comparison, Webster Pacific found, using data from Niche, that the New York City area had 20 such schools (42% of the sample for the area), many of them in Manhattan.
Recognizing the demand, many top schools have sought to add a few seats per grade level, but expanding without degrading reputation and education quality is complicated. Surging real estate prices and the cost of insurance — a direct result of Miami’s climate challenges, by the way — have made it difficult to attract new educators. Many simply can’t afford to live in Miami-Dade County, and they balk at the idea of dealing with the area’s transportation problems. In other words, whether it’s public or private schools, the best way to meet the dire need for more teachers may be to address some of the metro area’s other underlying issues, namely, improving transit options and curbing insurance costs by tackling climate threats.
Can They Do It?
I’ve been a bit of a “Wall Street South” skeptic at times. I watched for years as the same press-release anecdotes — such and such $100 million hedge fund has moved three people to Miami! — were recycled over and over again. It felt like Miami’s legions of marketing professionals were trying to will the story into existence by pushing a narrative that wasn’t quite true. But even I have to admit that the story has become more of a reality in the past three years.
Firms like Citadel and Elliott are influential enough to lure others like them. Government officials face a unique opportunity to diversify their economy away from volatile and poor-paying hospitality work. But the movement is still too young to be truly self-sustaining, and officials need to help it along by showing that Miami is a serious place committed to better schools, improving the transportation experience and, of course, ensuring its long-term viability in the face of climate change.
1The number could understate the size of Wall Street South because it's based on the state where firms have their main office. It doesn't credit satellite offices.
2Only about 3.6% take public transportation to work. Clearly, public health concerns influenced this during the pandemic, but public transportation use among workers was slipping even before COVID-19.
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