Wealth Migration from California is Changing the Landscape in Florida

There were already a lot of billionaires living in Florida, more than 100 in fact. That’s more than any other state except New York and California. But the decision by unions and progressive academics to push a wealth tax in California is creating a new influx of wealth that is already reshaping the Florida coast.

Last December, a large coterie of Silicon Valley billionaires descended upon Miami to attend Art Basel, the ritzy, contemporary art fair that marks the end of the moneyed set’s yearly social calendar…

…the chatter pivoted quickly among a contingent of a dozen California billionaires…

“One said, ‘Listen I don’t know what’s going to happen, it may or may not get passed,’” said Julian Johnston, a broker with the Corcoran Group in Miami, recalling a conversation with a California tech leader who said he was ready to move quickly if the measure passed. “‘I’ll spend $100 million to $300 million,’” he said.

All along Florida’s Gold Coast from Palm Beach to Miami, luxury real estate brokers began fielding a torrent of urgent calls from tech chieftains and their associates wanting to see houses that they could buy before the end of year to establish domiciles in an effort to preserve their wealth.

Google co-founder Larry Page, one of the richest people in California, spent $170 million buying two waterfront properties in Miami. Sergey Brin bought his own $50 million property in March. Another one of California’s richest billionaires, Mark Zuckerberg, bought property in the same area last week. All of this is having an impact on the local economy.

Meta chairman Mark Zuckerberg and his wife, Priscilla Chan, paid $170 million for a two-acre estate on Miami’s ultra-exclusive Indian Creek, also known as the Billionaire Bunker, setting a new Miami-Dade County real estate record.

The exodus has not been limited to individuals. Wells Fargo, announced it was relocating its wealth management division from San Francisco to West Palm Beach by year’s end, while Palantir, the A.I. and software analytics giant, last month disclosed its move to Miami — six years after the company transferred its headquarters from Palo Alto to Denver.

This extraordinary wealth migration is reshaping south Florida: spurring development, tripling real estate prices for trophy properties (even as single-family home prices in the state have stagnated here) and amplifying demand for nannies, private chefs, exclusive golf club memberships and private schools.

A real estate broker who deals in these high-end properties told the LA Times what the market has been like since the wealth tax.

“The California guys, all billionaires, are running away from the wealth tax,” said [Brett] Harris, who represented Zuckerberg in the Indian Creek deal. “I have three things under contract north of $600 million.”

Chase Berger, a partner with the law firm Ghidotti Berger, who handles high end real estate transactions across Florida, said he’s seen an uptick in what he calls “stealth ownership,” creating Florida land trusts for wealthy clients who prefer to mask their association with a purchase.

“I used to do a handful of these a year,” he said but amid the recent migration, “now it’s dozens” adding, “It’s a residency war with California that they’re fighting.”…

When the California billionaires can’t find what they want, they are typically dropping $50 million to $75 million on a “starter home” to establish residency.

That bit about “stealth ownership” is important. Maybe we’ve only heard about the 4-5 of the richest Californian’s leaving the state, but that doesn’t mean there aren’t many others who are doing the same thing quietly.

The progressives who are convinced the retroactive nature of the wealth tax will trap billionaires in California seemed to have misjudged this rather badly. No doubt some of these issues will wind up in court but, as I’ve said before, it’s not clear the retroactive tax will stand up to court scrutiny. Given the current makeup of the Supreme Court it seems very possible California will spend millions fighting for this money and then lose most of it anyway.

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