Living in the present is a good motto if you’re walking on the beach. It’s not so good when the headlines are filled with descriptions that Florida is a “paradise lost” or that the entire state is like Mickey Rourke’s sweet but self-destructive character in The Wrestler—“a broken-down piece of meat,” according to a recent New York Times story.
The catalyst for these gloomy descriptions was the state’s release in August of its latest population figures, reporting that for the first time since 1946, Florida lost population—about 58,000 residents in the period April 2008 to April 2009. A few days later, Sarasota County’s demographer, Anthony Vallone, reported the news that Sarasota, for the first time since the county has been keeping records, also lost population—about 4,300 people, or about 1.1 percent of its population in 2008. (Manatee County has so far continued to grow, albeit slowly, gaining about 700 residents in 2008.)
Immediately, Florida was the subject of national news stories that seemed to suggest the entire state needs therapy to adjust to the shocking new reality that the growth model that has sustained the economy for decades has vanished.
“Yes,” sighs Stanley K. Smith, an economist at the University of Florida’s Bureau of Economic and Business Research and the director of the BEBR’s Population Program, who reported the new numbers and was interviewed by a wave of reporters in August. “Florida is going to have to make accommodations because it’s been built on growth, but a one-year change does not change things long-term. People place far too much emphasis on what happened last year.”
To Smith, population shifts require a long view. “Population momentum is like an ocean liner,” he says; and this huge ship that symbolizes migration patterns cannot reverse course in a year, so it’s best not to live in—or make business predictions based on—the moment. The stream of people who have been coming here for decades will not dry up overnight. Despite all our problems—and Florida has many—Smith predicts about 250,000 people a year will still want to make Florida home between 2010 and 2030 (although he leaves room for a smaller figure when the numbers are recalculated next spring). That’s much lower than the 300,000 to 400,000 people who moved here annually in the ’70s, ’80s and ’90s, but it’s “still pretty substantial,” says Smith.
That conclusion should please most local businesspeople and economic development officials. But before everyone begins rejoicing, we should consider that the people who come here may not be the stereotypical retiree Florida has built its reputation on. New demographic trends mean Florida—including Southwest Florida—must adapt.
“You shouldn’t be panicked,” says Robert E. Lang, the urban studies expert and the research director of Brookings Mountain West at the University of Las Vegas, who called Florida a “paradise lost” back in August. “Florida is not Cleveland, and this too shall pass. Just don’t expect to live off the growth model
Challenges to Growth
We’re all familiar with the factors that have contributed to an outflow of residents. The housing bust has created huge job losses in Florida (about 400,000 as of August 2009) and people who could move began to do so to look for work. But even before the housing bust, Florida was facing challenges. We’re no longer a cheap state. Mark Wilson, the president of the Florida Chamber of Commerce, says we were once the fifth-cheapest state to live in, and now we’re the 14th most expensive. Property taxes and skyrocketing insurance, which is like a second mortgage payment for many families, have funneled an ever larger portion of take-home pay into housing expenses.
Other states, like North Carolina, South Carolina, Georgia and Tennessee, offer a more affordable and higher standard of living, says real estate analyst Jack McCabe of Deerfield-based McCabe Research, who began to warn developers years ago that the housing boom was a house of cards. Florida also has challenges with its education system—the state ranks near the bottom in the number of dollars it spends on students, and test scores are low—and this weak showing encourages businesses and entrepreneurial talent to head to other states, says McCabe.
A couple of long-term trends also inhibit growth. Since the 1960s, America, despite its reputation as a footloose nation of pioneers, has begun to settle down, according to Census data and a study by the Pew Research Center. There are two main reasons. First, our population is getting older, and most people move when they’re in their 20s and 30s. Senior citizens tend not to move (although there is some evidence now that seniors over 75 years of age do move—back to where they have children or other family, another migration pattern Florida should track more closely).
Second, more households contain two-career couples, and it’s harder to relocate when two jobs are in play.
Still, in the short term, the current recession is the biggest obstacle to Florida’s growth. People move mainly because of jobs; and right now, we aren’t offering any.
Then Why Will We Grow?
Arthur “Chris” Nelson, presidential professor and director of the Metropolitan Research Center at the University of Utah, gave a presentation to Sarasota County government last year, so he’s familiar with our local demographics. To those skeptical about predictions that we will continue to grow, Nelson starts with the national picture. “You’re not going to add 100 million people every 30 years in this country and not get your fair share,” he says.
It’s possible the United States could reach a billion people by the end of this century, he says, since our population continues to reproduce beyond replacement rate. (Demographers say the increased fertility of women in their 30s, 40s and even 50s has taken us over the 2.1 percent fertility rate required for replacement.)
Perhaps more important is the impact of our longevity. Our lives will be extended by healthcare and biomedical advances that are perfecting therapies such as tissue replacement for failing kidneys, hearts and other organs.
“By 2020,” he says, “anybody under 60 will be expected to live to 120.”
Not everyone is predicting this glorious, or frightening, long lifespan with so much confidence, but Nelson’s point that Americans will be living longer is a given among demographers and a huge factor in our future population counts. Immigration also needs to be factored in. About 1.2 million people a year flow into the United States; most have relatives here or are refugees. The undocumented make up a “tiny percent,” he says.
The bottom line? The United States is going to grow, and many of the people living in this country are going to be old. In 2010, almost 3 million people will be turning 65, and for every year after that until 2025, America will see up to 4.5 million people a year reaching their 65th birthday.
Drilling down to the local level, Nelson estimates that Sarasota’s population—already one of the oldest counties in the nation—is projected to grow from its current population of 389,320 to 664,000 by 2040—just a little more than 30 years. He admits that his estimate is on the high end. Another economic firm, Woods and Poole, based in Washington, D.C., has predicted a 2040 population of 480,000.
Nonetheless, the best estimates have us growing, not shrinking. And even though we may want those 20- and 30-somethings to relocate here, many of the newcomers will have already received their AARP cards.
But given our problems, why will they choose Southwest Florida?
The Cool Factor
Around the country, Florida is often the butt of jokes, with its tacky images of old people, alligator wrestling, mermaid shows and Mickey Mouse. But Nelson says Southwest Florida has a lot of pluses. “You’ve got nice urban cores in Sarasota and Bradenton and nice beaches [Siesta Beach was named the second best in the nation in 2009]. When we talk about Florida and you ask people, ‘Where is your favorite spot?’ it’s not Orlando, not Miami. But they’ll say, ‘Sarasota and Naples are kind of nice.’ These are spots that have positive external connotations.”
Sarasota, says Peter Katz, Sarasota County’s new Smart Growth director, passes the “cool test” and is joining places like Asheville, N.C., Austin, Texas, and Santa Fe, N.M., (although some might say just barely) as a trendy, fashionable destination with a beautiful environment, an abundance of culture and an artsy, intelligent population. We’ve got a reputation as a “thinking person’s Florida town,” Katz says.
Even McCabe says there’s just something about Sarasota. He thinks the entire state of Florida is in for a rocky ride for years and that plenty of cheaper communities, even in the Caribbean and Central America, offer a better standard of living than Florida’s. Still, when he looks at his own retirement plans, Sarasota ranks No. 3 on his list behind Maui, Hawaii, and Carmel, Calif.
“Sarasota has more of the cool factor for baby boomers, a lot of the culture that’s missing in most parts of Florida,” he says. “It has nice beaches, boating is wonderful, people are relaxed, there are good restaurants, it’s pretty—it has the prettiest housing along the coast in the entire state—and it’s close to Tampa.”
All those factors will make Sarasota attractive to baby boomers in the future. “Long-term, Sarasota will probably be one of the most desirable cities in the country,” McCabe predicts.
A New Breed of Resident
But don’t relax yet. This next wave of growth, modest as it may be, comes with some big questions, mostly centering on affordability and our aging population.
Nelson says as America gets older and households get smaller, we’d better be prepared for changing needs and tastes in housing and communities.
In the 1960s, 48 percent of U.S. households had children; in 2000 that number slowed to 33 percent and by 2040, it will shrink to 28 percent, he says. And guess what? Baby boomers are not going to want the large lots and big homes in the suburbs where they raised their children.
“Retirees simplify their lives,” he says.
And making life more simple means not having to take care of a big lawn, drive miles to the grocery store and pay thousands more in property taxes for a big home. “Market demand for new homes through 2025 may be almost exclusively for attached and small-lot homes,” Nelson wrote in a 2006 paper that looked at housing preference surveys. Seniors are going to want to live closer to urban areas with their arts offerings, restaurants and medical facilities. The gated subdivision with the large homes miles from any city will eventually lose its luster.
“We’re overbuilt now with these homes,” says Nelson, “and these homes will erode in value. They are albatrosses.”
Nelson predicts that as these large homes on large lots in the suburbs lose value, many will eventually be retrofitted as multifamily housing. Each one of these large homes could easily accommodate two or three families.
If this happens, it will be a real reversal from the past 60 years when the affluent and educated headed to the suburbs and their gated communities. Instead, the less affluent may be driving through the gates, creating conflict between the established residents who desperately want to hold onto their lifestyles and investment in pricey real estate, and these newcomers who are looking for affordable homes.
“It’s already happening informally around the country,” he says. “I was in Atlanta last spring and a local mayor was trying to stop multiple families from living in McMansions.”
Another factor encouraging smaller homes will be the timing of another wave of home buying from retirees who decide they want to live in Florida. As soon as the economy improves, all those baby boomers from Michigan, Illinois, Ohio and Pennsylvania who want to move here will put their homes on the market about the same time, depressing home prices. “By 2020 there will be more buyers than sellers of homes in Florida,” Nelson says. “But they will not have as much money now. They’re going to have to buy a smaller home.”
McCabe, the real estate expert, agrees that small is the wave of the future, mostly because of the economy and what he calls a “paradigm shift” in our values. In the short term, he says, Americans “are not into materialism like they were four years ago. They’re into savings and being more frugal. It will affect everything.
“The destiny of Florida is smaller homes, smaller condos that are less expensive and easier to maintain,” says McCabe. “Luxury high-rise condominiums on the water won’t return for God knows how many years.” Homes will be in the 1,200- to 1,800-square-foot range rather than the 2,400- to 3,000-square-foot range.
But McCabe says those baby boomer retirees are not necessarily going to sell their homes up North. Those full-time retirees who used to relocate to Sarasota and Manatee and fuel our economy are a thing of the past. Instead, he sees a growing market of second homes in Southwest Florida.
“A lot more baby boomers will keep their present home and will look at Florida as an area of second homes, a warm place in the winter for a few months,” he says.
But what about the fact that Florida has no income tax? Won’t that continue to attract retirees? McCabe shrugs off the state’s big financial draw. Florida is expensive, so there won’t be a major advantage to pulling up stakes and moving full-time to the state for a tax break, he says. Plus, baby boomers, more than previous generations, just aren’t going to want to give up their primary residences where they have family, their churches and recreational activities, he says, so they’ll buy smaller homes in Florida, or may even end up renting instead of buying.
“They won’t be putting their money into a million-dollar condo on the water,” he predicts.
“They saw too many people lose money.”
If he’s right, Florida, and especially Southwest Florida, will see less wealth and vibrancy—benefits these full-time retirees bring to the region. Year-round residents help keep our restaurants open, shop in grocery stores, buy shoes, hire landscapers and see doctors. They go to movies, attend plays and sit in on government meetings. Without them, Sarasota and Manatee will feel less like real communities and more like other resort towns in Florida that empty out between April and December.
Without new industries and jobs, “Florida will go back to the basics that have attracted people here from beginning,” McCabe says, “affordability and sunshine.” ■
A Losing Year
Sarasota County’s population growth 2000-2009.
SOURCE: Anthony Vallone, Senior Planner Sarasota County Government, BEBR preliminary estimates for 2009
1960 | 2000 | 2040
HH with Children
48% | 33% | 28%
HH without Children
52% | 67% | 72%
13% | 27% | 29%
SOURCE: Arthur C. Nelson, “The Reconstruction of Sarasota County”
200 million in 1968
300 million in 2006
400 million in 2032
500 million in 2050
America adds 100 million people faster than any other nation except India and Pakistan–but faster than China.
Source: Arthur C. Nelson, “The Reconstruction of Sarasota County”
Surveys by Type, 1995-2004
Unit Type Share
Condos, Co-ops 9%
Small Lot (<7,000 sf) 37%
Large Lot (>7,000 sf) 25%
Source: Arthur C. Nelson, “The Reconstruction of Sarasota County”
2000 | 2040
327,000 | 664,000
183,000 | 372,000
192,000 | 450,000
Source: Arthur C. Nelson, “The Reconstruction of Sarasota County”