Tuesday, July 12, 2005

Is New York's financial industry migrating to Florida?

OK, this post falls in the realm of pure speculation, and really has little to do with Houston other than being about cities and their economic engines.

The Wall Street Journal has an article talking about how Ft. Lauderdale airport has become as congested and delay-prone as all three New York area airports. JetBlue announced today they're starting service from NY/Newark to Florida this fall (Continental reacted swiftly, and WSJ analysis), which will bring them to 77 flights/day from NY to Florida, 26 of those to Ft. Lauderdale - which is right up there in frequency to the Boston and DC shuttles. That is simply crazy. Throw in the other airlines, and I'll bet you're looking nearly 200 flights/day from NY to Florida. That's a flight every 5 minutes during a 16 hour flying day. Assuming ~100 people/flight, that's around 20,000 people each direction every day.

So who are these people? I'm betting a good chunk of them are the well-off financial dealmakers of Wall Street. A couple hundred bucks a week to shuttle between New York and their estate/condo in Florida is chump change for them. I think a few variables are at work here:
  1. The rise of cheap, comfortable, frequent flights by JetBlue and others.
  2. The Internet makes it easy to work remotely.
  3. Miami is putting almost no limits on high-rise condo building, which are selling like hotcakes at these low mortgage rates.
There are only about 200,000 investment company jobs in the city of New York, meaning on any given day up to 10% of them could be going to Florida and 10% of them coming back from Florida. The question becomes: at what point do they say,

"Hey... everybody I work with also owns a place in Ft. Lauderdale/ Miami, and Florida has no income tax. Why am I going to New York for meetings - and paying state and city income tax - when everything I need and almost everybody I need to deal with is down there?"
The financial industry is the backbone of the New York economy. It's a little known fact that New York is even more dependent on the financial industry than Houston is on the energy industry. Could they really lose it down this slippery slope? If anybody has any anecdotes or other evidence, I'd love to hear it in the comments.

3 Comments:

At 10:06 PM, July 12, 2005, Blogger Adam said...

Surely some of those twenty thousand are retirees and the relatives of retirees, aren't they?

 
At 8:53 AM, July 13, 2005, Blogger Tory Gattis said...

Sure. And families going to Disney World too. But I visited Ft. Lauderdale/Miami recently, and was stunned by the number of high-end luxury developments. Pretty sure your average Joe retiree from New York isn't buying them.

 
At 10:45 AM, July 13, 2005, Anonymous Anonymous said...

Southern Florida is become THE location for second homes and people are also using them for first residences for tax purposes. The salary of these New York financial workers is enough to handle an apartment in New York and a home or condo in south florida. The establishing of residence removes them from paying state income tax in Florida.

Just throwing an example out there, Rush Limbaugh has done this. Many realtors have discussed this phenomenon also. I've been through the Ft. Lauderdale Airport before. It's lot better than Miami's but it has very little room to grow. They're finishing a full rennovation too.

 

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