Personal Finance
‘Climate gentrification’ fuels higher prices for longtime Miami residents
Published
9 months agoon

A development towers over the Lyric Theater in Miami’s Overtown neighborhood.
Greg Iacurci
MIAMI — Nicole Crooks stood in the plaza of the historic Lyric Theater, a royal blue hat shielding her from the midday sun that baked Miami.
In its heyday, the theater, in the city’s Overtown neighborhood, was an important cultural hub for the Black community. James Brown, Sam Cooke, Ray Charles, Aretha Franklin and Ella Fitzgerald performed there, in the heart of “Little Broadway,” for esteemed audience members such as Jackie Robinson and Joe Louis.
Now, on that day in mid-March, the towering shell of a future high-rise development and a pair of yellow construction cranes loomed over the cultural landmark. It’s a visual reminder of the changing face of the neighborhood — and rising costs for longtime residents.
Located inland, far from prized beachfront real estate, Overtown was once shunned by developers and wealthy homeowners, said Crooks, a community engagement manager at Catalyst Miami, a nonprofit focused on equity and justice.
Nicole Crooks stands in the plaza of the Lyric Theater in Overtown, Miami.
Greg Iacurci
But as Miami has become ground zero for climate change, Overtown has also become a hot spot for developers fleeing rising seas and coastal flood risk, say climate experts and community advocates.
That’s because Overtown — like districts such as Allapattah, Liberty City, Little Haiti and parts of Coconut Grove — sits along the Miami Rock Ridge. This elevated limestone spine is nine feet above sea level, on average — about three feet higher than Miami’s overall average.
A development boom in these districts is changing the face of these historically Black neighborhoods and driving up prices, longtime residents tell CNBC. The dynamic is known as “climate gentrification.”
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Gentrification due to climate change is also happening in other parts of the U.S. and is one way in which climate risks disproportionately fall on people of color.
“More than anything, it’s about economics,” Crooks said of the encroachment of luxury developments in Overtown, where she has lived since 2011. “We’re recognizing that what was once prime real estate [on the coast] is not really prime real estate anymore” due to rising seas.
If Miami is ground zero for climate change, then climate gentrification makes Overtown and other historically Black neighborhoods in the city “ground zero of ground zero,” Crooks said.
Why the wealthy ‘have an upper hand’
When a neighborhood gentrifies, residents’ average incomes and education levels, as well as rents, rise rapidly, said Carl Gershenson, director of the Princeton University Eviction Lab.
Because of how those elements correlate, the outcome is generally that the white population increases and people of color are priced out, he said.
Gentrification is “inevitable” in a place such as Miami because so many people are moving there, including many wealthy people, Gershenson said.
But climate change “molds the way gentrification is going to happen,” he added.
Part of the building site of the Magic City development in Little Haiti.
Greg Iacurci
Indeed, climate gentrification has exacerbated a “pronounced housing affordability crisis” in Miami, particularly for immigrants and low-income residents, according to a recent analysis by real estate experts at Moody’s.
Asking rents have increased by 32.2% in the past four years to $2,224 per unit, on average — higher than the U.S. average of 19.3% growth and $1,825 per unit, according to Moody’s.
The typical renter in Miami spends about 43% of their income on rent, making the metro area the least affordable in the U.S., according to May data from Zillow.
Housing demand has soared due to Miami’s transition into a finance and technology hub, which has attracted businesses and young workers, pushing up prices, Moody’s said.

But rising seas and more frequent and intense flooding have made neighborhoods such as Little Haiti, Overtown and Liberty City — historically occupied by lower-income households — more attractive to wealthy people, Moody’s said.
The rich “have an upper hand” since they have the financial means to relocate away from intensifying climate hazards, it said.
“These areas, previously overlooked, are now valued for their higher elevation away from flood-prone zones, which leads to development pressure,” according to Moody’s.
These shifts in migration patterns “accelerate the displacement of established residents and inflate property values and taxes, widening the socio-economic divide,” it wrote.
Indeed, real estate at higher elevations of Miami-Dade County has appreciated at a faster rate since 2000 than that in other areas of the county, according to a 2018 paper by Harvard University researchers.
Many longtime residents rent and therefore don’t seem to be reaping the benefits of higher home values: Just 26% of homes occupied in Little Haiti are occupied by their owners, for example, according to a 2015 analysis by Florida International University.
In Little Haiti, the Magic City Innovation District, a 17-acre mixed-use development, is in the early stages of construction.
Robert Zangrillo, founder, chairman and CEO of Dragon Global, one of the Magic City investors, said the development will “empower” and “uplift” — rather than gentrify — the neighborhood.
He said the elevation was a factor in the location of Magic City, as were train and highway access, proximity to schools and views.
“We’re 17 to 20 feet above sea level, which eliminates flooding,” he said. “We’re the highest point in Miami.”
Effects of high costs ‘simply heartbreaking’
Comprehensive real estate data broken down according to neighborhood boundaries is hard to come by. Data at the ZIP-code level offers a rough approximation, though it may encompass multiple neighborhoods, according to analysts.
For example, residents of northwest Miami ZIP code 33127 have seen their average annual property tax bills jump 60% between 2019 and 2023, to $3,636, according to ATTOM, a company that tracks real estate data. The ZIP code encompasses parts of Allapattah, Liberty City and Little Haiti and borders Overtown.
That figure exceeds the 37.4% average growth for all of Miami-Dade County and 14.1% average for the U.S., according to ATTOM.
Higher property taxes often go hand in hand with higher property values, as developers build nicer properties and homes sell for higher prices. Wealthier homeowners may also demand more city services, pushing up prices.
A high-rise development in Overtown, Miami.
Greg Iacurci
Average rents in that same ZIP code have also exceeded those of the broader region, according to CoreLogic data.
Rents for one- and two-bedroom apartments jumped 50% and 52%, respectively, since the first quarter of 2021, according to CoreLogic.
By comparison, the broader Miami metro area saw one-bedroom rents grow by roughly 37% to 39%, and about 45% to 46% for two-bedroom units. CoreLogic breaks out data for two Miami metro divisions: Miami-Miami Beach-Kendall and West Palm Beach-Boca Raton-Delray Beach.
“To see how the elders are being pushed out, single mothers having to resort to living in their cars with their children in order to live within their means … is simply heartbreaking for me,” Crooks said.
‘Canaries in the coal mine’
Climate gentrification isn’t just a Miami phenomenon: It’s happening in “high-risk, high-amenity areas” across the U.S., said Princeton’s Gershenson.
Honolulu is another prominent example of development capital creeping inland to previously less desirable areas, said Andrew Rumbach, senior fellow at the Urban Institute. It’s a trend likely to expand to other parts of the nation as the fallout from climate change worsens.
Miami and Honolulu are the “canaries in the coal mine,” he said.
But climate gentrification can take many forms. For example, it also occurs when climate disasters reduce the supply of housing, fueling higher prices.
Smoke from the Marshall Fire in Louisville, Colorado.
Chris Rogers | Photodisc | Getty Images
In the year following the 2021 Marshall Fire in Colorado — the costliest fire in the state’s history — a quarter of renters in the communities affected by the fire saw their rents swell by more than 10%, according to survey data collected by Rumbach and other researchers. That was more than double the region-wide average of 4%, he said.
The supply that’s repaired and rebuilt generally costs more, too — favoring wealthier homeowners, the researchers found.
Across the U.S., high-climate-risk areas where disasters serially occur experience 12% higher rents, on average, according to recent research by the Georgia Institute of Technology and the Brookings Institution.
“It’s basic supply and demand: After disasters, housing costs tend to increase,” said Rumbach.
‘My whole neighborhood is changing’
Fredericka Brown, 92, has lived in Coconut Grove all her life.
Recent development has irreparably altered her neighborhood, both in character and beauty, she said.
“My whole neighborhood is changing,” said Brown, seated at a long table in the basement of the Macedonia Missionary Baptist Church. Founded in 1895, it’s the oldest African-American church in Coconut Grove Village West.
The West Grove district, as it’s often called, is where some Black settlers from the Bahamas put down roots in the 1870s.
“They’re not building single-family [houses] here anymore,” Brown said. The height of buildings is “going up,” she said.
Fredericka Brown (L) and Carolyn Donaldson (R) at the Macedonia Missionary Baptist Church in Coconut Grove.
Greg Iacurci
Carolyn Donaldson, sitting next to her, agreed. West Grove is located at the highest elevation in the broader Coconut Grove area, said Donaldson, a resident and vice chair of Grove Rights and Community Equity.
The area may well become “waterfront property” decades from now if rising seas swallow up surrounding lower-lying areas, Donaldson said. It’s part of a developer’s job to be “forward-thinking,” she said.
Development has contributed to financial woes for longtime residents, she added, pointing to rising property taxes as an example.
“All of a sudden, the house you paid for years ago and you were expecting to leave it to your family for generations, you now may or may not be able to afford it,” Donaldson said.
Why elevation matters for developers
Developers have been active in the City of Miami.
The number of newly constructed apartment units in multifamily buildings has grown by 155% over the past decade, versus 44% in the broader Miami metro area and 25% in the U.S., according to Moody’s data. Data for the City of Miami counts growth in overall apartment inventory in buildings with 40 or more units. The geographical area includes aforementioned gentrifying neighborhoods and others such as the downtown area.
While elevation isn’t generally “driving [developers’] investment thesis in Miami, it’s “definitely a consideration,” said David Arditi, a founding partner of Aria Development Group. Aria, a residential real estate developer, generally focuses on the downtown and Brickell neighborhoods of Miami and not the ones being discussed in this article.
Flood risk is generally why elevation matters: Lower-lying areas at higher flood risk can negatively affect a project’s finances via higher insurance rates, which are “already exorbitant,” Arditi said. Aria analyzes flood maps published by the Federal Emergency Management Agency and aims to build in areas that have lower relative risk, for example, he said.
“If you’re in a more favorable flood zone versus not … there’s a real sort of economic impact to it,” he said. “The insurance market has, you know, quadrupled or quintupled in the past few years, as regards the premium,” he added.
A 2022 study by University of Miami researchers found that insurance rates — more so than the physical threat of rising seas — are the primary driver of homebuyers’ decision to move to higher ground.
“Presently, climate gentrification in Miami is more reflective of a rational economic investment motivation in response to expensive flood insurance rather than sea-level rise itself,” the authors, Han Li and Richard J. Grant, wrote.
Some development is likely needed to address Miami’s housing crunch, but there has to be a balance, Donaldson said.
“We’re trying to hold on to as much [of the neighborhood’s history] as we possibly can and … leave at least a legacy and history here in the community,” she added.
Tearing down old homes and putting up new ones can benefit communities by making them more resilient to climate disasters, said Todd Crowl, director of the Florida International University Institute of Environment.
However, doing so can also destroy the “cultural mosaic” of majority South American and Caribbean neighborhoods as wealthier people move in and contribute to the areas’ “homogenization,” said Crowl, a science advisor for the mayor of Miami-Dade County.
“The social injustice part of climate is a really big deal,” said Crowl. “And it’s not something easy to wrap our heads around.”
It’s basic supply and demand: After disasters, housing costs tend to increase.
Andrew Rumbach
senior fellow at the Urban Institute
Paulette Richards has lived in Liberty City since 1977. She said she has friends whose family members are sleeping on their couches or air mattresses after being unable to afford fast-rising housing costs.
“The rent is so high,” said Richards, a community activist who’s credited with coining the term “climate gentrification.” “They cannot afford it.”
Richards, who founded the nonprofit Women in Leadership Miami and the Liberty City Climate & Me youth education program, said she began to notice more interest from “predatory” real estate developers in higher-elevation communities starting around 2010.
She said she doesn’t have a problem with development in Liberty City, in and of itself. “I want [the neighborhood] to look good,” she said. “But I don’t want it to look good for someone else.”
It’s ‘about fiscal opportunity’
Carl Juste at his photo studio in Little Haiti.
Greg Iacurci
Carl Juste’s roots in Little Haiti run deep.
The photojournalist has lived in the neighborhood, north of downtown Miami, since the early 1970s.
A mural of Juste’s parents — Viter and Maria Juste, known as the father and mother of Little Haiti — welcomes passersby outside Juste’s studio off Northeast 2nd Avenue, a thoroughfare known as an area of “great social and cultural significance to the Haitian Diaspora.”
“Anybody who comes to Little Haiti, they stop in front of that mural and take pictures,” Juste said.
A mural of Viter and Maria Juste in Little Haiti.
Greg Iacurci
A few blocks north, construction has started on the Magic City Innovation District.
The development is zoned for eight 25-story apartment buildings, six 20-story office towers, and a 420-room hotel, in addition to retail and public space, according to a webpage by Dragon Global, one of the Magic City investors. Among the properties is Sixty Uptown Magic City, billed as a collection of luxury residential units.
“Now there’s this encroachment of developers,” Juste said.
“The only place you can go is up, because the water is coming,” he said, in reference to rising seas. Development is “about fiscal opportunity,” he said.
Plaza Equity Partners, a real estate developer and one of the Magic City partners, did not respond to CNBC’s requests for comment. Another partner, Lune Rouge Real Estate, declined to comment.
Magic City development site in Little Haiti.
Greg Iacurci
But company officials in public comments have said the development will benefit the area.
The Magic City project “will bring more jobs, create economic prosperity and preserve the thriving culture of Little Haiti,” Neil Fairman, founder and chairman of Plaza Equity Partners, said in 2021.
Magic City developers anticipate it will create more than 11,680 full-time jobs and infuse $188 million of extra annual spending into the local economy, for example, according to a 2018 economic impact assessment by an independent firm, Lambert Advisory. Likewise, Miami-Dade County estimated that a multimillion-dollar initiative launched in 2015 to “revitalize” part of Liberty City with new mixed-income developments would create 2,290 jobs.
Magic City investors also invested $31 million in the Little Haiti Revitalization Trust, created and administered by the City of Miami to support community revitalization in Little Haiti.

Affordable housing and homeownership, local small business development, local workforce participation and hiring programs, community beautification projects, and the creation and improvement of public parks are among their priorities, developers said.
Zangrillo, the Dragon Global founder, sees such investment as going “above and beyond” to ensure Little Haiti is benefited by the development rather than gentrified. He also helped fund a $100,000 donation to build a technology innovation center at the Notre Dame d’Haiti Catholic Church, he said.
Developers also didn’t force out residents, Zangrillo said, since they bought vacant land and abandoned warehouses to construct Magic City.
But development has already caused unsustainable inflation for many longtime Little Haiti residents, Juste said. Often, there are other, less quantifiable ills, too, such as the destruction of a neighborhood’s feel and identity, he said.
“That’s what makes [gentrification] so perilous,” he said. “Exactly the very thing that brings [people] here, you’re destroying.”
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Personal Finance
Consumers are making different financial choices in response to tariffs
Published
12 hours agoon
April 22, 2025
The Apple Fifth Avenue store in New York, U.S., on Monday, Feb. 24, 2025.
Michael Nagle | Bloomberg | Getty Images
Even as a pause on reciprocal tariffs has been put into effect, consumers are already anticipating the pressures of higher prices.
A majority of Americans — 85% — have concerns about the tariffs, according to a new NerdWallet survey of more than 2,000 individuals conducted this month.
Among top concerns of consumers is that the new policies will impact their ability to afford necessities and that the U.S. economy will fall into a recession.
Meanwhile, cracks in consumer confidence are showing elsewhere.
The University of Michigan’s consumer survey shows sentiment has dropped by more than 30% since December among persistent worries of a trade war. The latest reading for April fell 11% from the previous month, which was worse than expected.
The worries are not unfounded, experts say. Tariffs could cost the average household $3,800 per year, the Budget Lab at Yale University estimates.
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“Most Americans are worried about tariffs, and it’s actually impacting their spending plans,” said Kimberly Palmer, personal finance expert at NerdWallet.
In the next 12 months, a significant portion of individuals surveyed by NerdWallet plan to make changes to their spending habits, with a notable shift towards saving more.
Specifically, 45% plan to spend less on non-necessities, 33% intend to spend less on necessities, and 30% plan to save more money in an emergency fund. However, a smaller percentage, 14%, anticipate paying less on their debts.
The tariffs come as consumers were already struggling to pay for groceries and other essentials amid higher prices, according to Palmer.
“These tariffs are adding to that financial stress and basically forcing people to make some difficult decisions,” Palmer said. That includes scaling back on travel and planned big-ticket purchases like a car.
Emergency savings is ‘most important’ priority: expert
New economic pressures may prompt income to be eaten up by rising prices and competing interests, according to Stephen Kates, a certified financial planner and financial analyst at Bankrate.
Consumers may have to make tough choices between saving, investing and paying down debts.
“If you have nothing [saved], start with the emergency fund,” Kates said.
Individuals should strive to have at least one month of essential expenses set aside at the very minimum, Kates said. Ideally, that would be more like three to six months’ living expenses, he said.

That way, if a job or other income loss happens, consumers can protect themselves from going into debt, Kates said.
For individuals who already have racked up debt balances, prioritizing emergency savings still makes the most sense, Kates said. And if you’re choosing between emergency savings or saving for retirement, emergency savings should still be the highest priority, he said.
To be sure, that doesn’t necessarily mean individuals should ignore their other goals.
Kates discussed using what is called the “debt avalanche” strategy.
The focus is on paying down the debt with the highest interest rate first — while paying minimums on the others — then move on to the account with the next highest rate, and so on. That can provide an immediate return and help free up money in household budgets, Kates said.
When it comes to retirement savings, it’s important to make sure individuals are contributing enough to take advantage of a match, if their employer offers one, he said.
Personal Finance
Trump said tariff revenue could replace the income tax. What experts say
Published
14 hours agoon
April 22, 2025
In this aerial view a forklift drives among stacked shipping containers in Hamburg Port on April 15, 2025 in Hamburg, Germany.
Sean Gallup | Getty Images
Tariff tax base is ‘a lot smaller’ than income tax
Some policy experts have questioned how much revenue the duties could bring in, compared to the federal income tax.
“The tariff tax base is a lot smaller than the income tax base,” Kimberly Clausing, a senior fellow at the Peterson Institute for International Economics, told CNBC.
In 2023, the U.S. imported $3.1 trillion of goods. By comparison, the government levied tax on more than $20 trillion in incomes, according to a report she co-authored last summer.
White House trade adviser Peter Navarro in late March estimated tariffs could raise roughly $600 billion a year.
But that figure “is not even in the realm of possibility,” Mark Zandi, chief economist at Moody’s, told CNBC earlier this month. “If you get to $100 billion to $200 billion, you’ll be pretty lucky.”
To compare, the IRS has collected $1.14 trillion in individual income taxes for fiscal year 2025 through March 31, according to Treasury data.
“Tariff rates would have to be implausibly high on such a small base of imports to replace the income tax,” Clausing co-wrote in the Peterson Institute for International Economics report.
Plus, at higher tariff rates, people will buy fewer imported goods, which reduces revenue, Clausing told CNBC: “That’s part of the point of the policy.”
The Trump administration did not respond to CNBC’s request for comment.
Consumer behavior influences tariff income
As tariff rates increase, other factors can decrease how much revenue the U.S. ultimately collects, experts say.
“The administration seems to think that every time it raises the tariff rate that it can collect more revenue,” Tax Foundation’s Durante said. “And that’s not always the case.”
Direct tariff revenue is lowered by behavioral and other economic factors, Durante detailed in a report earlier this month.

The Tax Foundation estimates that a 10% universal tariff would raise $2.2 trillion through 2034. However, the same tariff would reduce U.S. gross domestic product by 0.4%, which impacts revenue.
The International Monetary Fund on Tuesday reduced 2025 U.S. growth projections to 1.8% from 2.7% based on trade tensions.
Personal Finance
What student loan borrowers need to know about involuntary collections
Published
16 hours agoon
April 22, 2025
U.S. Secretary of Education Linda McMahon smiles during the signing event for an executive order to shut down the Department of Education next to U.S. President Donald Trump, in the East Room at the White House in Washington, D.C., U.S., March 20, 2025.
Carlos Barria | Reuters
In a Wall Street Journal op-ed, U.S. Secretary of Education Linda McMahon explained the U.S. Department of Education’s decision to restart collections on federal student loans that are in default — and what comes next for Federal student loan borrowers who are behind on their bills.
“On May 5, we will begin the process of moving roughly 1.8 million borrowers into repayment plans and restart collections of loans in default,” McMahon wrote in the op-ed Monday.
“Borrowers who don’t make payments on time will see their credit scores go down, and in some cases their wages automatically garnished,” McMahon wrote.
Next steps for borrowers
Federal student loan borrowers in default will receive an e-mail over the next two weeks making them aware of this new policy, the Education Department said.
These borrowers should contact the government’s Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation.
The Education Department said it is extending the Federal Student Aid call-center operations with weekend hours as well updating a “loan simulator” to help borrowers calculate their repayment plans. There is also an artificial intelligence assistant, dubbed Aidan, to help with a financial strategy.
“We are committed to ensuring that borrowers are paying back their loans, that they are fully supported in doing so, and that colleges can’t create such a massive liability for students and their families, jeopardizing their ability to achieve the American dream,” McMahon wrote.
‘Be proactive’
Those borrowers who are behind in their required payments should avoid being placed in default by taking advantage of various options currently available to them to manage their education loans, advised Kalman Chany, a financial aid consultant and author of The Princeton Review’s “Paying for College.”
“Be proactive,” he said. “Best to take care of this as soon as possible, as the loan servicers’ and the U.S. Department of Education’s customer support will get busier the closer it gets to May 5.”

The Education Department has not collected on defaulted student loans since March 2020. After the Covid pandemic-era pause on federal student loan payments expired in September 2023, the Biden administration offered borrowers another year in which they would be shielded from the impacts of missed payments. That relief period officially ended on Sept. 30, 2024.
“President Biden never had the authority to forgive student loans across the board, as the Supreme Court held in 2023,” McMahon wrote. “But for political gain, he dangled the carrot of loan forgiveness in front of young voters, among other things by keeping in place a temporary Covid-era deferment program.”
McMahon said restarting collections of loans in default was not meant “to be unkind to student borrowers.” Rather, the new policy intended to protect taxpayers. “Debt doesn’t go away; it gets transferred to others,” she said. “If borrowers don’t pay their debts to the government, taxpayers do.”
Currently, around 42 million Americans hold federal student loans and roughly 5.3 million borrowers are in default.
“It really is time to start repaying again,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget said in a statement. “While a short repayment pause was justifiable early in the pandemic, that was five years ago — and it makes no sense today.”
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President Donald Trump in March signed an executive order aimed at dismantling of the Education Department after nominating McMahon for Education secretary. Trump suggested that she would help gut the agency. As part of this overhaul, federal student loan management was then shifted to the Small Business Administration.
Along with changes to the student loan system, the Trump administration revised some of the Department of Education’s income-driven repayment plans, which put at-risk borrowers in “economic limbo,” according to Mike Pierce, executive director at the Student Borrower Protection Center.
“For five million people in default, federal law gives borrowers a way out of default and the right to make loan payments they can afford,” Pierce said in a statement. “Since February, Donald Trump and Linda McMahon have blocked these borrowers’ path out of default and are now feeding them into the maw of the government debt collection machine.”

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