Soundings

Wendell Cox
Sunshine Is Golden
Florida has reversed its demographic decline.
Spring 2012

One of the leading demographic stories of the past decade was Florida’s population slump. But a surprising story of the new decade is Florida’s population rebound. Of all the “bubble states”—those slammed hardest by the housing market’s collapse—only the Sunshine State has shown robust signs of recovery in domestic migration.

On a percentage basis, no large state grew more between World War II and the 2008 crash than Florida. The 1950 census counted 2.8 million Florida residents. By 2000, the population had swelled to 16 million. The expansion continued through 2005, and Florida seemed poised to replace New York as the nation’s third most populous state in the 2010 census. But the end of the decade saw some of Florida’s slowest growth in years, and when the census was performed, the state remained Number Four.

A major reason for the slowdown was Florida’s housing bubble, one of the biggest in the United States. One way of measuring housing affordability is the “median multiple” measurement, the ratio of an area’s median house price to its median annual household income; in normal circumstances, it hovers around 3.0. But the Miami metropolitan area, as housing prices reached their peak in 2006, had a median multiple more than double that. In the Tampa–St. Petersburg and Orlando metropolitan areas, the measurement was more than 60 percent higher than normal.

The steep housing prices began to drive Florida residents away. During the second half of the decade, demographers began noting the “halfback” phenomenon: new Floridians moving not all the way back to their states of origin but “halfway back”—to North and South Carolina, where the cost of living was considerably lower. In 2006, net domestic migration to North and South Carolina—that is, the number of people entering those states from other states, minus the number leaving—jumped 50 and 60 percent, respectively, above the 2005 level; both Carolinas maintained almost the new level of migration the following year. Domestic migration to Georgia doubled in 2006 and remained higher than the historical average for another year before returning to pre-2006 levels in 2008 and 2009.

At the same time, Florida’s domestic-migration numbers were sagging. For years, Florida had led the nation in that department: from 2001 to 2006, 140,000 more people moved to Florida than departed for other states. But by 2007, annual domestic migration to Florida had dropped to 17,000. In 2008, Florida lost a net 19,000 residents to other states; in 2009, it lost 31,000. This huge reversal of Florida’s fortunes became the subject of much analysis. Could Florida’s demographic struggles portend the decline of the Sunbelt, which had accounted for more than 80 percent of U.S. population growth since 1980?

Increasingly, the answer seems to be no. Florida looks remarkably vibrant these days. Indeed, the state’s reversal in domestic migration has been spectacular: it gained a net 55,000 domestic migrants in 2010 and 119,000 in 2011. Only Texas, the leader in net domestic migration since 2006 (when it took over from Florida), added more domestic migrants last year. Between 2009 and 2011, Florida’s total population gain—which includes domestic migration, international migration, and births minus deaths—was more than 500,000 people, putting the state on track to become the nation’s third-largest by 2013.

What explains Florida’s turnaround? In part, housing prices and the cost of living, which have returned to historical norms (not counting the Miami metropolitan area). Last year, moreover, Florida’s legislature repealed the land-rationing Growth Management Act, a so-called smart-growth law that required local jurisdictions to seek approval for any development plans from the state’s now-defunct Department of Community Affairs. Repeal should help keep home prices low, which should keep the state appealing to newcomers.

Other “bubble states” haven’t done nearly as well, though they’ve seen similar drops in housing prices. Domestic migration to Arizona, which had peaked at more than 130,000 in 2005 and 2006, fell to 15,000 in 2009 and remained low, at 13,000, in 2011. But at least Arizona’s economy shows signs of improving. Not so Nevada’s. Nevada gained more than 40,000 domestic migrants in every year from 2001 through 2007. As in Florida and Arizona, housing prices rose inordinately, reaching nearly double the 3.0 median multiple in Las Vegas. But even after the housing bubble burst and the cost of living fell, with the median multiple now well below 3.0, Nevada lost a net 11,000 domestic migrants in 2011.

Nevada’s problem is that it’s joined at the hip to California. The resort- and entertainment-rich Las Vegas and Reno metropolitan areas depend on tourist trade from the Golden State—and there, the economy remains depressed. Between 2000 and 2011, California lost nearly 1.7 million people to domestic migration. California’s high cost of living seems likely to discourage new residents from moving to the state, and, left unreformed, its out-of-whack finances, poor business climate, and anemic job creation in the largest metropolitan areas will probably complicate any return to its former growth. The Sunshine State has ousted the Golden State as the place for optimists to watch.

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