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Recession Blamed For Florida's Slow Growth In 2008

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By KATE SPINNER

The Sarasota Herald-Tribune

Published: January 5, 2009

Florida's population growth crawled to a near standstill last year, in part the result of a national recession.

It was the slowest rate in Florida since 1944, during the height of World War II.

The state added fewer than 129,000 people between July 1, 2007 and July 1, 2008, according to the U.S. Census Bureau.

The figure represents a 0.7 percent growth rate.

Remarkably, the state that for years boasted of gaining 1,000 new residents a day had a lower growth rate last year than the national average of 0.9 percent.

"The growth that we've had this year essentially is coming from natural births," said Amy Baker, coordinator of Florida's legislative Office of Economic & Demographic Research.

The state expects growth to slow even more this year, before slowly rebounding in 2010 and 2011.

Florida has long depended on growth as the engine of its economy. The fact that fewer people moving here has paralyzed the construction industry and retailing.

The Census figures are probably optimistic, said Jack McCabe, a housing analyst and CEO of McCabe Research and Consulting.

"There's a preponderance of anecdotal evidence that population growth has slowed down to almost nil across the state," McCabe said. "Just think about all the retailers, how many retail chains and restaurants that are going out of business because people are not here and they're not spending money."

The decline has come on like an avalanche. In 2005, the Census Bureau counted more than 400,000 new Floridians. In 2007, the number of new Floridians dropped to 193,735 people.

The recession, which began in early 2008, added another dimension, Baker said. Retirees and other Americans who may have moved to Florida were stifled by a decline in their homes' value and losses in savings due to the stock market's fall.

"It's been several different stories as we've moved along through the whole housing boom and the destruction of the bubble," Baker said. "Right now, the largest driver of what's happened in the last year is the national recession. When you're in a recession and you live in New York and you can't sell your home, even though you want to move to Florida, you can't move."

State projections anticipate that population growth will further slow through July before starting to creep upward again next year, Baker said.

"Once the country moves out of recession they will come back to Florida in more normal levels," Baker said. "And so we're seeing the worst of it right now. We expect population growth to get back over 1 percent and stay there."

The state's population estimates and projections follow a trend similar to the Census Bureau's, although the state uses a different method for analysis.

Dennis Black, a real estate consultant based in Port Charlotte, said his own consulting business has slowed to the point where he is relying more heavily on his other business interests for income, such as his real estate school.

Next week Black will hold a class in Tennessee, a state that he said is luring tax-conscious retirees out of Florida.

"Many people are leaving Florida and going to Tennessee and going to Georgia and to South Carolina and the biggest reason is taxes," Black said.

McCabe said taxes and high insurance are a large part of the equation. But the state is also not attracting new high-tech businesses, partly because of its lackluster educational system.

"I don't think you can point at one particular thing, but we've got some problems down here in Florida and people are hearing about it," McCabe said.

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