There's Trouble--Lots Of It--in Paradise

Jewelry, an actress once said, takes people's minds off your wrinkles. So too has Miami's necklace of pearl beaches and aventurine waters long distracted residents from the city's notorious imperfections. Crime and corruption were a small price to pay, people told themselves, for an otherwise affordable existence so near paradise.

That logic may no longer apply. Crime is down, but the city's old dysfunctions have been joined by acute new economic pressures on Miami's middle class and retirees. Now that the city's jagged growth spurt is showing signs of sputtering, regular Miamians are taking stock of their new city: traffic jams, half-built high rises, struggling schools. And more than ever, they are voting with their flip-flops. They're leaving town.

When Brenda Powell, 61, retires next year, she plans to leave Miami, where she has lived for 30 years, and perhaps head for North Carolina. A retiree moving away from Florida might seem as odd as an Everglades egret flying north for the winter, but Powell, an administrative assistant, says she has had enough. "Miami has become an overcrowded mess," she says. "It takes me an hour to drive less than 10 miles." Joseph and Teresa Burke and their four children are also moving to North Carolina. Although the 2006 hurricane season, ending in a few weeks, has been merciful, insurers have been less so. Premiums have been going up as much as 1,000% since 2000 for some home- and business owners. The Burkes watched hurricane and other insurance costs on their Miami Beach house skyrocket from $3,500 a year in 2000 to $17,000 today. "I'm leaving everything I've known my entire life," says Joseph, 43, who runs a small ocean-freighter business. "But if the rest of the country was based on the same out-of-whack economic-fluid levels Miami's on these days, America would be a Third World banana republic."

Census Bureau data show that in each year since 2000, on average over 20,000 more residents have left Miami (which includes the city of Miami and Miami-Dade County, pop. 2.4 million) than have moved there from other parts of the U.S.

Immigrants from other countries, especially Latin America, are the only reason Miami's population is still growing. Ironically, as more Latin Americans migrate to Miami, couples like Fred and Linda Adam may be switching places with them. The Adams just sold their home near Miami Beach, and are moving to more affordable Honduras. "We could hold on to our house," says Fred, 57. But Miami's spiraling cost of living means "we couldn't afford the other things we like to do here," such as scuba diving. "We'd be twiddling our thumbs."

Today Miami is the least affordable metropolitan area in the U.S. It has one of the highest median house prices ($372,000) and the nation's wealthiest community (Fisher Island, where luminaries like Oprah Winfrey have had homes). But a heavy reliance on the tourism industry and its attendant low-wage service jobs has given Miami one of America's lowest household median incomes ($33,000) and the country's highest proportion of renters and homeowners who spend 30% or more of their pay on housing.