Exclusive: Demand for private schools soars as more wealthy families move to South Florida

By Erik Bojnansky | March 23, 2023

American Heritage Schools is no stranger to waitlists, as the pre-K-12 private school has long been in demand. But that demand has intensified over the past few years, with applications doubling since 2019, the school reports.

“We were full before and we had waitlists, but not to the levels we are at now,” said Doug Laurie, president of the school, which operates campuses in Plantation and Delray Beach.

Those seeking to enroll their children range from locals to families from South America and Europe. But lately, the largest increase in new students is from New York, California and northeastern states, Laurie said.

American Heritage isn’t alone.

Since the onset of the Covid-19 pandemic, South Florida private schools have been inundated with requests from new arrivals to enroll their children.

“We are seeing a huge influx of [high-income families] and that’s not stopping,” said Christopher Rim, founder and CEO of Command Education, a firm that counsels clients on how to get their children into the best colleges.

But there are not enough seats at South Florida’s top private schools to accommodate the growing demand, he added. This has created opportunities for out-of-state private schools to enter the South Florida market and local schools to expand their spaces.

At the same time, the current crunch may be dissuading some venture capitalists from moving to South Florida, Rim said.

“The only thing that is preventing a lot of additional founders from coming here are the lack of schools,” Rim said. “And not just any schools, but competitive schools.”

Sunshine wealth transfer

According to the IRS, $23.7 billion in net new taxable income flowed toward Florida in 2020, the most of any state. (Texas had the second highest gain, at $6.3 billion.)

Much of that wealth came from those wishing to avoid state income taxes – Florida has none – and Covid-19 restrictions, and those searching for decent weather and a business-friendly atmosphere. This migration encouraged tech companies, financial firms and other businesses to open new offices in the South Florida region.

Real estate agent Danny Hertzberg, a member of the Jills Zeder Group at Coldwell Banker, said that, prior to the pandemic, wealthy clients were primarily interested in a second or third home. But by 2020, potential buyers wanted to make South Florida their primary residence.

Although that pool of buyers shrank with the rise in interest rates, there’s still a lot of activity in the luxury home market, Hertzberg said. Nevertheless, the affluent are no longer in a rush to buy a mansion or a spacious oceanfront condo unit.

“They’re not making a decision [on a home purchase] until they know where their children are going to school,” he said.

Command Education’s Rim said the South Florida migration is what led him to move the firm, which has 36 full-time educational consultants nationwide, to Miami Beach from New York.

“This was purely driven by my clients’ needs,” he said. “The clients I worked with in New York and San Francisco decided to relocate to Miami and Miami Beach.”

Schools have become impossible to get into due to increased competition and limited seating – even for parents willing to pay more than $50,000 a year in tuition and donations, Rim said.

“They can’t get their kids into these schools, and it’s not for a lack of connections,” he said. “There is simply no physical space.”

It’s also been tough for local families trying to get their children into private schools via scholarship programs and financial aid, said Leslie Miller Saiontz, founder of nonprofit Achieve Miami, which seeks to enhance educational opportunities in Miami-Dade County.

“Applications have increased two to four times the typical amount,” she said. “That creates a problem, not just for the families that are coming in, but for poorer families who work hard to put their children into those schools.”

Additional classrooms

Avenues: The World School, a New York-based for-profit school, intends to build a campus and dormitory for 2,440 students on a 16-acre site at 4949 N.E. Second Ave. in Miami’s Buena Vista neighborhood. It bought the parcel in November 2018 for $60 million.

The first phase of that project, which will accommodate 930 students from pre-K to ninth grade, is slated to open by fall 2025. The second phase will house 1,820 students up to 12th grade when finished in fall 2028, said Tara Powers, its global director of communications. Annual tuition will be about $48,500, she said.

“Based on the interest we’ve seen to date in Avenues Miami, coupled with the growing population of South Florida, it appears there is a need for more independent school options in the area to meet increased demand,” Powers said.

That demand also attracted California-based BASIS Independent Schools to the area. President Matt Dick told Bloomberg News that his network of pre-K-12 private schools was seeking a site for a campus in Miami and Palm Beach. BASIS did not return a request for comment by press time.

Command Education’s Rim said there are other private school companies exploring options to build in the tri-county region. He has teamed with experienced partners in New York City to build a school somewhere in South Florida, he added.

It’s not only parents who clamoring for more private schools.

Stephen Ross, founder and chairman of The Related Cos., is exploring ways to build more private schools and charter schools near downtown West Palm Beach, where his company owns substantial property, and throughout the rest of Palm Beach County.

Kelly Smallridge, president of the Business Development Board of Palm Beach County, said her organization is partnering with politicians, businesses, private school headmasters and public school principals to find ways to build more private and public schools in Palm Beach County.

“We’re exploring expansion strategies, and we’re having confidential conversations with out-of-state private schools,” she said.

Obstacles

Some local private schools have expansion plans of their own. Tech entrepreneur John Marshall has proposed a four-story expansion for his BaseCamp305 elementary school in South Beach.

Laurie said American Heritage may build more classrooms on its 2.5-acre Delray Beach campus, as well as “other parts of the state” because acquiring more land for a campus in Miami-Dade, Broward or Palm Beach counties is not practical.

“Land costs nowadays are not what they used to be,” he said. “Things have gotten way more expensive.”

When it comes to building new schools, private schools are at a disadvantage because public and charter schools tend to have more public funding and easier access to land, said Daniel Abou-Jaoude, the Skanska VP who oversees school construction in Florida. State law requires new public and charter schools to be built for major residential projects, so developers donate land to meet that requirement.

“Private schools have to go and purchase the land, or lease the land, or establish a deal [to build the school], which will be a major cost for them, even if they do have the land,” he said.

Private school projects also often need to contend with zoning issues and neighborhood pushback. Carrollton School of the Sacred Heart, a pre-K-12 private girls Catholic school that has operated in Miami’s Coconut Grove since 1961, proposed turning Villa Woodbine, a nearby event venue, into an all-boys school. Those plans are now in limbo following opposition from Grove residents who fretted over traffic impacts, loss of trees and overdevelopment.

Then there’s the challenge of attracting and retaining educators in an area where rents continue to skyrocket as more high-income households move to South Florida.

To provide some affordable housing for its employees, American Heritage bought a small apartment building in northern Broward.

“We can’t do that for everyone, but we have some great instructors we don’t want to lose,” Laurie said. “I hope [local and state government] can provide a solution for affordable housing. Teachers in public and private schools, and people who work in the service industry, sorely need it.”

The public option

Private schools are not the only option for well-off parents who want to ensure their children receive a good education. There are also plenty of top public and charter schools to choose from.

Smallridge said part of her efforts is educating new arrivals on the variety of schools available in Palm Beach County.

“I think sometimes parents have a preconception of our educational options, and that perception is not reality,” she said. “We have a public relations problem.”

Command Education’s Rim said sometimes a good public school is a better fit for a child than a private school, especially for a driven child who can thrive in a less-structured environment.

“I went to a public school myself,” he said. “I think I did pretty well. I graduated from Yale.”

Still, that doesn’t change the need for more quality schools in South Florida, be they public or private, Rim added.
“There needs to be more elite schools coming to South Florida.”

Originally published on South Florida Business Journal on March 23, 2023