Miami is more expensive than New York. It's a bad sign for the city's economy.

Elhanan Harel and his wife were living in New York City, where they paid $1,770 a month for a tiny one-bedroom apartment. The rent might have been manageable had Harel's lice-treatment business been doing well, but the pandemic's disruptions had made it difficult to make ends meet.

In 2020, the couple moved to Miami, hoping their money would stretch further. The move initially paid off. Harel got a job running a COVID-19 lab, and the couple rented a spacious two-bedroom condo for $2,000 a month and spent far less on expenses like groceries and car insurance than they did in NYC.

By 2022, however, the couple had two children and a rent bill that had risen by $800 a month. Unable to keep up with their rising expenses, they decided to move back to New York City.

"The cost of Miami became a major issue," Harel told Business Insider. "By the time we left in 2023, the cost of living had increased so dramatically that the financial advantage had almost entirely evaporated."

As it becomes harder to afford living in Miami, many residents are moving to less expensive cities. Their departures are leaving employers struggling to fill open positions — a trend that could spell trouble for Miami's economy.

While Miami's cost of living has consistently been above the national average, data from the Bureau of Economic Analysis shows that in 2024, the latest year for which data is available, the metro area's cost of living surpassed New York City's for the first time.

The Miami migration has slowed

For years, Florida has been one of the country's hottest migration destinations, drawing both wealthy and working-class newcomers with its relatively affordable housing, lack of state income tax, business-friendly environment, and warm weather.

But the state is losing some of its appeal. Home prices and rents have soared, while insurance premiums have climbed — driven largely by Florida's vulnerability to natural disasters — weakening the state's affordability advantage.

Between July 1, 2024, and June 30, 2025, more people moved out of the Miami metro area than moved in.

Ned Murray, an associate director of the Jorge M. Pérez Metropolitan Center at Florida International University, an urban policy think tank based in Miami, told Business Insider that the departure of residents is contributing to a labor shortage in Miami, one he expects to intensify.

"The biggest concern, for everyone here, including our major industries, is a continuation of domestic out-migration among our workers, so the labor force shortage we have right now is only going to worsen," Murray said. "I don't see how that can get better, given all the other indicators, whether it be housing costs, transportation costs, insurance, health costs."

Miami's job market hasn't been booming. The metro experienced barely any job growth this past June, and employment was roughly in line with where it stood a year ago.

Housing costs in Miami are quickly becoming unaffordable for many

Ken Sejour opened his restaurant, Chef Creole, in Miami in 1992. He said that the pandemic brought drastic changes to the city.

"After COVID, people in New York and people in California were like, 'Oh my God, how did we not see this diamond in the rough?,'" Sejour told Business Insider.

In the restaurant business, Sejour said it's been hard to retain employees as they get priced out of nearby neighborhoods. His staff used to live close by; now, he said some live outside the city entirely.

"People who work for me right now, it takes them two hours to get to their job," Sejour said. "So they literally waste four hours just in transportation because you can't afford to stay in Miami. There's no way in the world you're going to stay in Miami — a studio in Miami is running about $1,500 to $1,800."

An analysis of Apartment List data by the Shimberg Center for Housing Studies shows that the median rent for a one-bedroom apartment in May in Miami-Dade County increased from $1,095 to $1,482 from 2019 to 2026.

While billionaires like Larry Page and Mark Zuckerberg are spending more than $100 million on homes, and companies like Citadel are pouring hundreds of millions into new headquarters, everyday Miamians are struggling with home prices that have risen much faster than local wages.

Ana Bozovic, the founder of Miami real estate research firm Analytics Miami, told Business Insider that the recent rise of the real estate market's floor is all but eradicating homes priced under $500,000.

In Miami-Dade County, the supply of single-family homes priced below $500,000 decreased 30% year-over-year compared to June 2025, according to data from Analytics Miami. It's decreased 82% since June 2019.

"It's basically already nonexistent," Bozovic said, "and it will soon be completely extinct."