MIAMI VICE: Consequences of brand-stacking real estate development practices in Miami, FL

Abstract

This paper explores the effects of brand-stacking, a real estate development trend popularized in Miami, FL. Brand-stacking refers to the practice of real estate developers partnering with luxury consumer brands to create high-end residential properties marketed specifically towards international buyers. While proponents argue such developments may enhance property values and attract investors, this study investigates the broader economic and social consequences of this trend at the zip code level, particularly its role in exacerbating Miami’s housing affordability crisis. My data consists of Zillow Home Value Index (ZHVI) values and Zillow Observed Rent Index (ZORI) values, allowing effects to be analyzed at monthly intervals. Using a difference-in-differences model and introducing intensity treatment alongside zip-code linear time trends and lagged effects, I find that the effects of branded development are largely heterogeneous, but statistically significant at the zip code level in some cases. Particularly when brand-name partnerships carry increased prestige, the spillover effects of anticipated development are far greater than existing findings on luxury new construction home price impacts. Contextualizing Miami’s housing affordability crisis within the broader framework of brand-stacking real estate development patterns, this study provides insights into the negative implications of this newfangled trend in the real estate industry. The findings contribute to existing literature on urban development policies, international real estate trends, and money laundering practices associated with foreign real estate investment.