One of the themes we cover on this blog is the importance of place in a world where people are becoming increasingly untethered. While I'm a firm believer that great local places have enduring value, this does not mean that technology isn't driving greater fluidity in the way people live, work, play, and optimize their taxes.

Over the last decade, the population of ultra-wealthy Americans (those with a net worth greater than or equal to $30 million) has risen noticeably in two states: Texas and Florida. California, a high-tax state, still dominates; however, Texas has overtaken New York, and Florida has overtaken Illinois. Notably, both Texas and Florida have no state income tax — they also have warmer weather than New York and Illinois.

As we have talked about before, there's a longstanding migration trend in the US toward sun, urban sprawl, and lower taxes. But it's not always as clear-cut as a rich person fully relocating to a lower-tax jurisdiction and completely severing ties. The enduring value of place means that many people still travel back and forth to meet whatever personal or professional obligations they might have.

And today, there are apps, such as TaxBird, that will meticulously track the number of days you spend (or your phone spends) in each jurisdiction to ensure you don't cross any important residency thresholds.

The global standard is the 183-day rule (or roughly half a year). In many or most cases, if you are physically present in a place for more than 50% of the year, you are automatically considered a resident for tax purposes. But it's not always this simple, so check with your tax advisor. Regardless, the untethering of life and work is surely allowing more people to tax-optimize in this way.

None of this is surprising.

As Charlie Munger used to say, "Show me the incentive, and I'll show you the outcome." But now we need to think about the longer-term ramifications for colder, higher-tax jurisdictions as capital and tax revenue continue to be siphoned off, not only to Texas and Florida, but to Dubai, Singapore, Hong Kong, Switzerland, Monaco and other places.

Cover photo by Colin Lloyd on Unsplash

Yesterday morning, we did a day trip to Monaco. The main thing I wanted to see was Le Renzo (which is a project I have written about before). Designed by Renzo Piano Building Workshop, it is among the most expensive residential buildings in the world. Condominiums have reportedly sold for as high as €120,000 per square meter (or about €11,148 per square foot).

Before the trip, I emailed the district's PR contact to see if we could get a tour inside. Unfortunately, it's August in Europe, and they told me that nobody from the development team would be around to take us through. So we ended up just walking the perimeter. Here is a photo of the project's north elevation, facing inland.

Here's the south side facing the sea:

And here's a photo of its western edge, including the building's outdoor pool amenity:

The -1 level is boat slips and retail, some of which are still in the process of opening. The fact that they placed the retail where they did stood out to me, because it feels akin to second-floor retail — meaning, it only works in certain places and under certain conditions. Maybe this is one of them.

The ground plane — or at least the level that connects inland — is visually open on all sides, except for the elevator cores and exit stairs coming down from the buildings. This gives you a clear view of the Mediterranean as you approach the district and makes the entire area feel publicly accessible. It's also meant to evoke the image of ships sitting in a dry dock.

We didn't stay in Monaco very long, but this project was the highlight for me. I would have really loved the opportunity to tour inside and get closer to its details.

Leaving Monaco requires some maneuvering if you didn't drive or take the train (which we didn't). Uber is banned within the principality. You can get dropped off in an Uber, but you can't request a car once you're there. This is what you'll see if you open up the app and try:

We were also told that they're very strict about this. If, for example, you get dropped off in an Uber and then try to go off-app for your return, the Uber driver runs the risk of a heavy fine and having their car confiscated for a week. So many drivers don't want to do this unless you're willing to compensate them for the risk.

What you instead need to do is walk to the Monaco-France border, which usually isn't far given the country has a total land area of around 2 square kilometers. As soon as the GPS on your phone signals that you're in France rather than Monaco, cars reappear in the app. And from my experience, the geofencing is accurate within a few meters. It was pretty neat.

In the future, I think a better option might be to road bike over. I saw a number of people doing that yesterday and, boy, it looked like fun.

Monaco is the second smallest sovereign state in the world by land area, after Vatican City. It is around 2 square kilometers. Wikipedia has it as 2.08 km2 and the Financial Times article I have on my desk right now has it as 1.98 km2. Whatever the number, the place is small. And when you combine this small land area (a supply-constrained market) with nice Mediterranean weather, no income taxes (except for French nationals), and generally low taxes all around, you tend to get expensive real estate.

According to FT, prices today can reach as high as €120,000 per m2, which makes cities like Hong Kong seem almost affordable. To put this into perspective, it would mean that, on the absolute highest end, a 600 square foot one-bedroom apartment (which may be too small for this market's taste) could cost around €6,688,800, or over C$9.7 million.

These kind of numbers will do wonders for a development pro forma. Take, for instance, Monaco's new Mareterra development. This is a 6-hectare land-reclamation project that extends into the sea and increases Monaco's total land area by something like 3%. When it opens next month, it will house new public spaces, a 500m waterfront promenade, a long list of impressive sustainability initiatives, 110 apartments, 4 townhouses, and 10 "mystery-shrouded villas" (FT's words).

I don't know off hand the cost of reclaiming land, but surely it isn't cheap. So it's remarkable to me that so few homes were able to carry the feasibility of such an ambitious project. On top of this, they've retained some of the most noteworthy architects in the world: Renzo Piano, Tadao Ando, and Norman Foster.

Renzo's project, called Le Renzo and pictured above, sits at the southern end of the development and houses 47 apartments. None are reportedly smaller than 400 square meters. And that's because the developers wanted to make sure that the housing would be suitable and big enough for families. Clearly it would be a lot of fun to scrutinize their development pro forma. Because many things are possible when you're underwriting what is probably the most expensive residential real estate in the world.

Images: Mareterra

One of the themes we cover on this blog is the importance of place in a world where people are becoming increasingly untethered. While I'm a firm believer that great local places have enduring value, this does not mean that technology isn't driving greater fluidity in the way people live, work, play, and optimize their taxes.

Over the last decade, the population of ultra-wealthy Americans (those with a net worth greater than or equal to $30 million) has risen noticeably in two states: Texas and Florida. California, a high-tax state, still dominates; however, Texas has overtaken New York, and Florida has overtaken Illinois. Notably, both Texas and Florida have no state income tax — they also have warmer weather than New York and Illinois.

As we have talked about before, there's a longstanding migration trend in the US toward sun, urban sprawl, and lower taxes. But it's not always as clear-cut as a rich person fully relocating to a lower-tax jurisdiction and completely severing ties. The enduring value of place means that many people still travel back and forth to meet whatever personal or professional obligations they might have.

And today, there are apps, such as TaxBird, that will meticulously track the number of days you spend (or your phone spends) in each jurisdiction to ensure you don't cross any important residency thresholds.

The global standard is the 183-day rule (or roughly half a year). In many or most cases, if you are physically present in a place for more than 50% of the year, you are automatically considered a resident for tax purposes. But it's not always this simple, so check with your tax advisor. Regardless, the untethering of life and work is surely allowing more people to tax-optimize in this way.

None of this is surprising.

As Charlie Munger used to say, "Show me the incentive, and I'll show you the outcome." But now we need to think about the longer-term ramifications for colder, higher-tax jurisdictions as capital and tax revenue continue to be siphoned off, not only to Texas and Florida, but to Dubai, Singapore, Hong Kong, Switzerland, Monaco and other places.

Cover photo by Colin Lloyd on Unsplash

Yesterday morning, we did a day trip to Monaco. The main thing I wanted to see was Le Renzo (which is a project I have written about before). Designed by Renzo Piano Building Workshop, it is among the most expensive residential buildings in the world. Condominiums have reportedly sold for as high as €120,000 per square meter (or about €11,148 per square foot).

Before the trip, I emailed the district's PR contact to see if we could get a tour inside. Unfortunately, it's August in Europe, and they told me that nobody from the development team would be around to take us through. So we ended up just walking the perimeter. Here is a photo of the project's north elevation, facing inland.

Here's the south side facing the sea:

And here's a photo of its western edge, including the building's outdoor pool amenity:

The -1 level is boat slips and retail, some of which are still in the process of opening. The fact that they placed the retail where they did stood out to me, because it feels akin to second-floor retail — meaning, it only works in certain places and under certain conditions. Maybe this is one of them.

The ground plane — or at least the level that connects inland — is visually open on all sides, except for the elevator cores and exit stairs coming down from the buildings. This gives you a clear view of the Mediterranean as you approach the district and makes the entire area feel publicly accessible. It's also meant to evoke the image of ships sitting in a dry dock.

We didn't stay in Monaco very long, but this project was the highlight for me. I would have really loved the opportunity to tour inside and get closer to its details.

Leaving Monaco requires some maneuvering if you didn't drive or take the train (which we didn't). Uber is banned within the principality. You can get dropped off in an Uber, but you can't request a car once you're there. This is what you'll see if you open up the app and try:

We were also told that they're very strict about this. If, for example, you get dropped off in an Uber and then try to go off-app for your return, the Uber driver runs the risk of a heavy fine and having their car confiscated for a week. So many drivers don't want to do this unless you're willing to compensate them for the risk.

What you instead need to do is walk to the Monaco-France border, which usually isn't far given the country has a total land area of around 2 square kilometers. As soon as the GPS on your phone signals that you're in France rather than Monaco, cars reappear in the app. And from my experience, the geofencing is accurate within a few meters. It was pretty neat.

In the future, I think a better option might be to road bike over. I saw a number of people doing that yesterday and, boy, it looked like fun.

Monaco is the second smallest sovereign state in the world by land area, after Vatican City. It is around 2 square kilometers. Wikipedia has it as 2.08 km2 and the Financial Times article I have on my desk right now has it as 1.98 km2. Whatever the number, the place is small. And when you combine this small land area (a supply-constrained market) with nice Mediterranean weather, no income taxes (except for French nationals), and generally low taxes all around, you tend to get expensive real estate.

According to FT, prices today can reach as high as €120,000 per m2, which makes cities like Hong Kong seem almost affordable. To put this into perspective, it would mean that, on the absolute highest end, a 600 square foot one-bedroom apartment (which may be too small for this market's taste) could cost around €6,688,800, or over C$9.7 million.

These kind of numbers will do wonders for a development pro forma. Take, for instance, Monaco's new Mareterra development. This is a 6-hectare land-reclamation project that extends into the sea and increases Monaco's total land area by something like 3%. When it opens next month, it will house new public spaces, a 500m waterfront promenade, a long list of impressive sustainability initiatives, 110 apartments, 4 townhouses, and 10 "mystery-shrouded villas" (FT's words).

I don't know off hand the cost of reclaiming land, but surely it isn't cheap. So it's remarkable to me that so few homes were able to carry the feasibility of such an ambitious project. On top of this, they've retained some of the most noteworthy architects in the world: Renzo Piano, Tadao Ando, and Norman Foster.

Renzo's project, called Le Renzo and pictured above, sits at the southern end of the development and houses 47 apartments. None are reportedly smaller than 400 square meters. And that's because the developers wanted to make sure that the housing would be suitable and big enough for families. Clearly it would be a lot of fun to scrutinize their development pro forma. Because many things are possible when you're underwriting what is probably the most expensive residential real estate in the world.

Images: Mareterra