MIAMI (AP) — Facing a teetering economy at home, wealthy Brazilians have been pouring money into what they increasingly see as the safest place to invest: South Florida real estate.
So are Argentinians, Colombians, Mexicans, Venezuelans, French and Turks — almost anyone with money to shelter, a direct flight to Miami and a shaky economy to flee.
Their cash has helped drive the latest twist in Miami's ever-evolving transformation — from a 19th century rail stop to a tourist-and-retiree hub to a haven for Cuban refugees to now a harbor for global investors. No American skyline has undergone a more drastic face-lift from foreign cash in the past decade: Luxury condo towers and swanky retailers crowd a downtown once marred by empty lots.
And almost no developer expects the demand to stop.
Yet Miamians as a whole have scarcely benefited from the glitz. Wages have actually dropped for Miami workers in the past year. Area unemployment tops the national average. Miami contains the largest share of renters in the country who devote over 30 percent of their pay to housing — the level the government deems burdensome.
"We're not seeing the benefits of that income being disposed of in the local economy," said Ned Murray, associate director of Florida International University's Metropolitan Center. "That impacts local businesses, and we're losing opportunities to create year-round housing for our workers. They're moving out."
But with its glamorous locale and easy access, Miami real estate offers an asset that's appreciating at a time when other investments have shrunk or turned frighteningly volatile. That's despite being on a stretch of land prone to natural disasters.
"All of the insecurity around the rest of the world only reminds people how important it is to have assets in the United States," said Alicia Cervera Lamadrid, a developer who is leading sales efforts for the planned 57-story Elysee, with condo units starting at $1.65 million and personal wine storage available for residents.
No fewer than 126 residential towers are planned for construction in South Florida. One sign of the scale of wealth from abroad is that the majority of foreign purchases are being funded with cash, not debt.
Last year, foreigners spent $6.1 billion on Miami-area real estate — 36 percent of all such investment, according to the Miami Association of Realtors. Nationally, foreigners account for just 8 percent of sales.
The influx has been sudden enough that the federal government has announced plans to monitor home purchases exceeding $3 million in Miami and New York City. Starting in March, the government will temporarily require title companies to identify buyers of property. Authorities have grown concerned that money launderers may be using anonymous holding companies to stash money in high-end real estate.
The average luxury condo price in Miami Beach has surged 35 percent from a year ago to $3.7 million, according to the real estate brokerage Douglas Elliman.
Downtown Miami is similarly "beginning to shift, but the question is, to whose benefit?" said Arden Shank, executive director of Neighborhood Housing Services of South Florida. "It doesn't benefit the people who have been there for a long time."
The metro area's unemployment rate is 5.5 percent, compared with 5 percent nationally. Average hourly earnings have dipped 0.4 percent to $22.57 from a year ago. By contrast, the national average wage has risen more than 2 percent in that time. Census Bureau data show that high rents burden 66 percent of Miami tenants, compared with 52 percent nationwide.
Regardless of wealth, everyone in South Florida faces the potentially dire consequences of climate change. Experts warn that as the seas rise further, flooding may become permanent, turning streets into canals, endangering access to drinking water and eroding the man-made beaches that have long drawn people to Miami.
"There is a disconnect — there's a real estate bubble, and then there's where we see sea level rise going," said Henry Briceno, who studies the effects of rising sea levels through the Southeast Environmental Research Center at Florida International University. "That's what really worries me: The rush to make money right away without thinking of the future and who is going to pay."
Yet to many wealthy international buyers, the opportunities appear to outweigh those risks.
Because so many of her clients now own Miami property, Sao Paulo-based interior designer Brunete Fraccaroli recently bought a condo at One Paraiso, a 53-story tower with a beach club slated to be finished next year. She expects her Florida clientele to grow as Brazil's plight intensifies.
Analysts say the South American country may be headed for its longest downturn in more than a century. Operating losses and labor strikes have battered the state oil company, Petrobras. Government spending cuts have failed to curb the deficit. Political corruption has left the country in chaos. Its currency, the real, lost nearly 50 percent of its value against the dollar last year.
"We think that the Brazilian real is going to drop more and more — it's going to be worse," said Fraccaroli, who also stars in her country's reality TV show "Rich Women."
Boak reported from Washington, Kay from Miami.