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Can Florida Become The Next Big Tech And Finance Hub? - YouTube
Channel: CNBC
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Got Miami Beach average sale
prices they're up 72% got prices
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up double digits in Boca
Wellington Bal Harbour Del Rey
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all across southern Florida. It
isn't called the Sunshine State
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for nothing. Over 230 days of
sunshine per year, 600 and some
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miles of beach, Disneyworld,
fancy sports cars, a wild
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nightlife, and of course, no
income tax. My kids nickname
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because we live in Orlando. They
called me Disney dad. When we
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would come here because I was
always in a good mood. We didn't
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stop hearing about Florida in
2020. from Florida now golden
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ticket in Florida. It sounds
like Florida. Well, you're not
[35]
alone. Some of Wall Street's
biggest names like Goldman
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Sachs, Elliott, management and
Citadel group have or are
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considering opening offices in
Florida. High profile investors
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like Keith Rabois, Shervin
Pishevar and Jon Oringer already
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made the move. Even JetBlue is
considering it. For years, even
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though people would talk about
moving, it really wasn't cool
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among the wealthy to move to
Florida. It was like, okay, you
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couldn't hack it in New York, go
to Florida. Now, you're the
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chump who stayed in New York.
But it's not just COVID. Reports
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of Florida slowly morphing into
a legitimate tech and financial
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hub has been loosely talked
about for over a decade. In
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2018, Florida solidified its
place in the big leagues when
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$2.88 billion was raised in
venture capital. That trend has
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continued all throughout 2020. I
think actually Miami has the
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opportunity within the next like
five to 10 years to you know not
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only become a tech hub, but
being the largest tech hub in
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the United States. Never in my
three decades of doing this have
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I ever seen the level of
economic development activity.
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But Florida's economy has long
been marked by low paying
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tourism and service sector jobs,
inequality and ravaging climate
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change. It's ranking near bottom
for affordable housing and
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health and unemployment
insurance access. As much as
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people understand Florida to be
a beautiful place to go and
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vacation. There is almost a
synonymous or parallel
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understanding that the state of
Florida is backwater hail for a
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lot of people. As consumer and
employment behavior shifted
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during the pandemic quality of
life became a priority. And
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Florida seemed like an obvious
choice, at least on the outside.
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Three Floridian cities were
among the top six choices for
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New Yorkers fleeing COVID. So
can Florida become the next big
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tech and finance hub?
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In December 2020, venture
capitalists Delian Asparouhov
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tweeted, okay, guys, hear me
out? What if we move Silicon
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Valley to Miami? I sort of had
this like, first moment where
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I'd kind of I'd say, like, a
crack in the foundation of my
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like, you know, belief in San
Francisco sort of occurred.
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Within hours, Miami Mayor,
Francis Suarez responded, how
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can I help. You know, by time I
visited in March, actually had
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more late stage in particular
investors, let's say Series B
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and beyond than San Francisco
did. Partially because how all
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of this sort of crossover in
hedge funds have entered into
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venture capital are deploying
more dollars than even the
[171]
venture capital firms are. So
this nexus of power were sort of
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already shifting and a lot of
those have moved to Miami
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already, both professionally and
personally sort of had a sudden
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realization I was like, oh my
God being here. I got move here.
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That happened on a Friday night
and by Sunday night, we had you
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know, put a bid in on a house in
the design district. Delian's
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tweet and eventual move has
fueled momentum that Suarez and
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other locals have capitalized
on. From conversations with
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celebrities like David Beckham
and tech billionaire Peter Thiel
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to Softbank's pledged to invest
$100 million in the city. The
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notion that high earning jobs in
tech and finance could migrate
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down Florida, has locals
buzzing. Pre COVID we had landed
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maybe 50 or 60 financial service
firms. Many of them had
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somewhere in the range of $500
million assets under management.
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Now we're seeing companies that
have assets under management.
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well over a billion dollars. The
state has many draws. Aside from
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the sunshine its welcoming
business climate is high on the
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list. According to the Tax
Foundation, after Wyoming, South
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Dakota and Alaska, Florida is
the fourth friendliest business
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state in the country. No
individual income tax and low
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corporate and unemployment
insurance taxes.
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Looking at more than 60 measures
of competitiveness, CNBC ranks
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the state 12th fourth for access
to capital after California, New
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York and Texas. It was around
tax season, and my accountant
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jokingly said to me, why don't
you go move to that house you
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built down there and stop
busting my chops every April 14.
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I was like, alright. Casaburi is
a member of Tiger 21, a peer
[260]
membership network for high net
worth individuals. He moved his
[263]
family of six to Orlando about
six years ago. Lifestyle is
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fantastic. The obvious. The
weather's great. There's beaches
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all over the place. You're on
either coast. Airports are
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fantastic, yoou can be all over
the country very quickly.
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But really what's happening down
here is really incredible.
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Everywhere you drive around, you
see building. The past few
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years, we saw it happening,
then, you know, tack on COVID
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and it just exponentially
changed the impact. The influx
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of the wealthy has reflected in
real estate sales too. South
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Florida home sales valued $1
million and above jumped between
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40 and 50% in 2020, compared to
2019.
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This is a long term move for
these companies. And I don't
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believe that they would be
signing eight to 10 year leases,
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with options to expand. I don't
believe that they would be
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putting their kids in schools
and uprooting them from their
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private schools and public
schools in New York, Boston and
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Connecticut if this weren't long
term, and I don't believe that
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they would be buying $20 million
homes if this were short term.
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There is so many amazing,
talented people from from every
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standpoint, from marketing
standpoint, from creative
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standpoint, from leadership
standpoint.
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And people are always willing to
move. Listen, if I was telling
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people to move to Nebraska, it
might be a little bit difficult
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to sell. The average financial
salesperson or analyst in
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Florida makes about half of what
they'd make in New York. That
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could be a deterring factor for
individuals choosing between job
[350]
offers in New York or Florida.
We have a company that we
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recently offered, you know term
sheet here to LA that said, you
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know, for the past three or four
years that they've been building
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their company here, it really
struggled to find the talent
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that they needed locally in
Miami, and also really struggled
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with being able to import
talent. And they said that over
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the course of COVID, and in
particular now with Miami tech
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week flipping, they're basically
importing talent left and right
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and they're able to sort of get
their pick of the litter of the
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top tier engineers in the world.
Migration trends are a strong
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indicator of growth. Between
2010 and 2019, Florida received
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over 2.3 million more people
than it lost, the highest in the
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nation. The population grew by
nearly 15% in the last decade.
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But more than half of that
growth came from people aged 60
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and above. In 2020. Contrary to
many reports, population growth
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was expected to slow down.
According to an independent
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analyst on cellphone data,
migration to Tampa and Orlando
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surged, but dropped sharply in
Miami. The overall impact ended
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up being roughly neutral. The
creation of millionaires, it
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happens in New York City, it
doesn't happen in Florida.
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Florida is a place where
millionaires go to retire. If
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you're a young person thinking
about you know, where am I going
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to launch my career, New York is
still you know where it's at,
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you know, and that'll be the
story next year and 10 years
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from now.
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Florida's economy has come a
long way over the past 50 years.
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In 1963, it was the 11th largest
economy in the country. Today,
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it's the fourth just behind New
York. Florida's gross state
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product, which is commonly used
to measure the health of an
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economy, also stayed well above
the national average in the
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seven years prior to COVID.
Except for the dips in the '08
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recession, employment grew in
every category until 2020. True
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health of an economy is really
how the quote unquote bottom is
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doing. How are teachers doing?
How are our public sector
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workers are doing. And you will
see in Florida, just like in
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every other state, that teachers
are going mad, trying to trying
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to provide some sort of
education for children. Parents
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are going mad, trying to provide
some sort of lives for their
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children and live for
themselves. The economy is not
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healthy, right? A very few are
healthy. Just like anywhere else
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in the world, COVID was tough on
Florida, real GDP fell 2.9%. And
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despite its lax COVID closures
and the stories of mass influx
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of people, between Q3 and Q4,
the state only grew 3.1%, in
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comparison to other states with
no income tax like Texas and
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Tennessee.
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It's hard to believe that
there's this rise of Florida.
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Florida has a growing
population. And that's mostly of
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lower income earning population
that are leaving, you know, the
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New York area, the New York
metro area because, again, of
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enormous affordability problems,
you know. While an immense
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amount of wealth enters Florida
annually, median income in the
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state is about 13% below the
national average. Most employed
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Floridians work in construction,
restaurants and food services,
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and elementary and secondary
schools. Inequality is
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increasing over time. And the
state spends less on public
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services like health and
education per capita than any
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other state in a nation. That
has resulted in social and
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economic problems like
suppressed low and middle income
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wages, social fragmentation,
poor health and violence.
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There's 2, 3, 4 different
Florida's that people live in.
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There's a tax haven, Florida
where people can lay out on the
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beaches or sit in their pent
houses. There's the Florida of
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tourism where people could go to
Disney and then there's a state
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of farm workers who work from
sun up to sun down, get shuttled
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from school buses from their
homes, have no protection,
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usually have no papers. There's
a life of black people who
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continuously live with no
representation, have the worst
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jobs in the state. The best
things that you know about
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Florida on those beautiful
postcards are at the expense of
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black people of immigrant
people, Haitian folks, African
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folks, these are the invisible
people who make Florida run.
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Spending more than a year
working from home has reassured
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companies that they can cut back
on pricey New York City or San
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Francisco offices, while
maintaining revenue. And Florida
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has benefited from that shift.
But for it to become an
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epicenter, could take time. It
took New York City centuries to
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build its agglomeration and
economies of scale.
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It remains to be seen if and how
South Florida can accomplish
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that. What really excites me
about Miami, is ethos that
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everybody here is really excited
about, right? pro technology,
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pro capitalism, pro immigration,
you know, cheap housing, low
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cost of living, low taxes, being
able to like grow into that I
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think is really important and
all the early signals to me seem
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you know, quite positive. But
it'll be interesting to see sort
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of in September and October you
still seeing this continuous
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exponential growth. This is all
real. This is not a dipping of
[630]
the toe in the sand. We know
this because they're talking to
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local accountants and local
attorneys and the traffic is
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very high to those offices.
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