We keep hearing that wealthy people increasingly want to live in cities like Miami. The weather is warm and taxes are lower. But it's important to keep in mind that this is part of a larger trend. In 2024, it was estimated that approximately 128,000 millionaires would relocate abroad. Last year, the number was more than 140,000. And this year, the number is expected to top 165,000. According to Henley & Partners, this represents "the largest voluntary transfer of private capital in modern history."

People and their capital are now more mobile than ever. And the result is that from Miami to Milan, something interesting has happened: cities have become consumer products that compete based on what they can offer their customers. Up until this year, Dubai seemed to have the strongest offering for millionaires, but we'll see how the Iran war impacts that going forward. As another example, the US remains a magnet for talent and capital, but:

...the biggest shift is in America—home to more than a third of the world’s people worth $30m or more, according to Knight Frank, a property firm. “The US has gone from a blip to the primary market,” says Ronald Klasko, a lawyer in Philadelphia.

He says that most clients are interested in moving to Europe, because they are concerned about America’s political direction, want an alternative residency or want to be able to travel without an American passport.

Anecdotally, I can also say that I was speaking with a luxury real estate agent in Toronto last week and she told me that her biggest client segment by far right now is wealthy Canadians who have been living in the US for many years or even decades and have now decided to move back home. Take that for what it's worth.

Of course, treating cities as transactional consumer products as opposed to deeply rooted places has its drawbacks. Global wealth migration can detach real estate values from the local economy and create banal districts for people with weak local connections. But I don't think these two things need to be mutually exclusive. Cities can and should be both global and local.

The reality today is that cities cannot take their tax bases for granted. Talent and capital are more mobile than ever before. If they don't like your product, they'll shop around for another one.

Cover photo by Avi Werde on Unsplash

Capital flight chart from The Economist

Okay, so, we know that New York's congestion pricing in lower Manhattan is doing exactly what it's supposed to do. It has reduced traffic congestion and average drive times, improved air quality, increased public transit ridership, and continues to generate lots of money for the city.

Because of this, a majority of New Yorkers now say they want congestion pricing to continue, despite many vehemently objecting to it before its enactment. It is, in fact, a car-friendly policy. It makes driving faster and easier by reducing congestion.

But here's another way to look at its effects. A recent study by the Columbia University Mailman School of Public Health (in partnership with the Yale School of Public Health) found that, at the highest level, the program is also helping road safety. Car crashes have declined since the program began.

But this is for overall crashes. Interestingly enough, the results are less obvious when looking specifically at injury and fatal crashes. One possible explanation for this is that congestion pricing is, you know, working. Cars are able to drive faster! And since I would imagine that vehicle speed is correlated with injury severity, this makes sense.

So, congestion pricing won't solve all of your city-building problems. It will, however, solve a great number of them. Which city will be bold enough to step up next?

Cover photo by Stian Skevig on Unsplash

I recently tweeted this photo of St.-Anna-Strasse 16 in Munich (the building in the centre) along with a pithy comment about how I really like the look and scale of this neighbourhood. It's beautiful, right? The tweet blew up and, as of right now, it has over 170k views. Pithy comments with pretty pictures always seem to outperform anything more nuanced that I might share. But in the spirit of yesterday's post about housing affordability, let's dig a little deeper.

Developed by Legat Living and designed by Munich-based Landau + Kindelbacher, the mixed-use building is located in Lehel, which I understand is one of the most desirable areas in the city. It's about 960 m2 and has five apartments (ranging from 140 to 200 m2) and one commercial unit at grade. Each home has direct elevator access and its own landing. To give you a better sense of the suites, here's a photo of the rear elevation:

What is clear is that this is a luxury, boutique offering. Based on a cursory review of the Munich real estate market, Lehel seems to be the most expensive neighbourhood, with an average apartment price of €12,468.33/m2. If we apply this average to their smallest apartment, that's a starting price of €1,745,566. But presumably, this isn't your average building. It was completed in 2020, so I'm going to assume these homes sold for meaningfully more.

All of this leaves us with a really beautiful building and a nice urban scale, but certainly not the secret to a magically affordable city. This is not a criticism of the project by any means. I stand by my original tweet. It's a beautiful development, but it does demonstrate some of the affordability challenges of building urban. Legalizing urban infill housing is not a silver bullet in and of itself.

Photos via Landau + Kindelbacher