Florida population rate tumbles

By Helen Huntley, Personal Finance Editor
In print: Friday, March 28, 2008

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Florida's population is increasing at the slowest pace in 30 years, which will put a damper on economic growth, University of Florida researchers said Thursday.

"The state has not experienced a decline of this magnitude since the mid '70s, when we were in a national recession," said Stan Smith, who directs population studies for the university's Bureau of Economic and Business Research.

The slowdown will affect everything from housing starts and new jobs to corporate relocations and state and local taxes. It also reinforces a recent perception that Florida's days are waning as a low-cost place in the sunshine.

The state's population grew about 2.4 percent a year from 2000 to 2007. The new UF forecast is for just 1.1 percent annual growth from 2007 to 2010, which translates into about 200,000 fewer new residents each year. Between 2010 and 2020, growth is expected to pick up to about 1.6 percent a year.

Smith said the bureau revised its forecast downward based on recent trends that researchers don't expect to turn around quickly.

"Historically, during recessions people tend not to move from one state to another," Smith said. He said the slowdown in job creation is a primary reason. Companies aren't transferring people in from other states to fill new positions, and people who want to move to Florida aren't finding jobs.

In addition, many people need to sell their homes elsewhere to have enough money to buy a new home in Florida.

"Part of the slowdown has to do with the higher price of real estate and higher cost of living in the state," said University of Central Florida economist Sean Snaith. "You also have people leaving Florida, and within Florida there is a move away from coastal areas where real estate prices are particularly expensive and a push toward the interior of the state."

UF estimates only Monroe County in the Florida Keys will lose population over the next two decades. However, growth is expected to be so small in several other counties, including Pinellas, that they could easily fall into the negative column. The most recent Census Bureau data show Pinellas lost population the last two years.

Slower population growth means less demand for housing and related products such as building supplies and home furnishings. It also means there won't be as many new customers for retailers and service providers.

"It affects the public coffers as well," Smith said. Fewer new homes mean fewer construction-related taxes and fees. Sales tax and property tax collections grow more slowly as well. The plus side: less demand for new schools, roads and other public services.

"Some people view a slowdown as a beneficial thing because of quality of life reasons related to congestion and loss of green space," Smith said.

Florida's growth depends primarily on people moving here from elsewhere because births outnumber deaths by only about 65,000 a year. By 2035 that number is expected to shrink to about 10,000 thanks to an aging population. Foreign immigrants are expected to make up an increasingly larger share of new residents.

Even with the slowdown, Florida's population, now 18.7-million, is expected to be 26.6-million in 2035. UCF's Snaith said Florida's slowdown should be put in perspective.

"We're forecasting slower but continued growth that would be the envy of many places across the U.S.," he said. "It's still going to be an important driver of the economy."

Helen Huntley can be reached at hhuntley@sptimes.com or (727) 893-8230.