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Business Observer Thursday, Sep. 3, 2009 10 years ago

City Exodus

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The state's drop in population is relatively tiny in percentage terms, but some Gulf Coast counties make up a disproportionate share of the state total and cities bear the brunt of the decline. And it means Florida may not gain as many seats in Congress now.
by: Jay Brady Government Editor

The state's drop in population is relatively tiny in percentage terms, but some Gulf Coast counties make up a disproportionate share of the state total and cities bear the brunt of the decline. And it means Florida may not gain as many seats in Congress now.


It is no surprise in this rugged economy that the state's population slid a bit this past year as Florida lost 58,294 residents, according to the University of Florida's Bureau of Economic and Business Research (BEBR).

The figure, disputed by some experts, is less than a third of 1% for the fourth most populous state, now with 18.7 million residents.

More than 22,000 people — nearly 40% of those who left the state — departed from five of the Gulf Coast's eight counties from Pasco to Collier; Pasco, Collier and Manatee increased their populations slightly. All eight counties have only 23% of the state's residents.

Lee led the decline in the region with a drop of 8,601. That is nearly 40% of the Gulf Coast's decline while Lee accounts for only 14% of the area's population. Lee was second to larger Broward County in population losses across
the state.

The big news reported around Florida and the country is that it's the first drop in 63 years, when military personnel returned home from there Florida bases in 1946.

But buried in the data is this telling nugget: 85% of the drop comes from cities — nearly 50,000 folks left for cheaper suburbs or left the state altogether. Many were displaced from construction or tourism jobs, and some are believed to be “halfbacks” — retirees who came from the north now moving to the Carolinas or Tennessee.

Interestingly, a recent news story blames Florida for the high unemployment rate in North Carolina. The story centers around Florida workers who couldn't afford rising home prices, property insurance and taxes here, and had moved to the Tar Heel state over the last several years fueling a boom-bust cycle there.

Bureau of Labor data show North Carolina had the second largest decline in the level of employment between June and July this year, losing 26,400 jobs barely beating out Florida's 25,200, even though Florida is a much more populated state. California led with a 35,800 employment drop.

Wayne Poston is Bradenton's mayor and also the newly re-elected president of the Florida League of Mayors. Poston has seen his city decline three years in a row, from a peak of 54,911 in 2006 to 54,051 as of April 1 this year.

Poston blames the state's urban growth policies, especially road concurrency rules, making it more economical to develop outside the cities. “The reason we have all this sprawl is that's what the growth management law led to. It forced sprawl.”

Taking matters into their own hands, this year the Bradenton City Council went along with Poston and eliminated impact fees that the county had pushed them to adopt. Then, the county followed suit and cut road fees in half for at least two years.

The Manatee School Board joined in wiping out school impact fees for two years.

The exodus from cities seems to include all the Gulf Coast, with only a few exceptions.

Tom Pelham, secretary of the Florida Department of Community Affairs, spoke about the data with the Review. “It does indicate a need to encourage and facilitate the kind of development in our urban areas where people want to stay there,” he says, adding, “I think people probably look to places where they can afford the housing and transportation costs.”

Asked about whether the relatively large exodus from cities validates the precepts of the 2009 Legislature's “Community Renewal Act” (Senate Bill 360) to remove regulatory barriers to compact urban form, Pelham says, “It certainly doesn't undermine them.”

Biggest losers
In the five Gulf Coast counties which saw their populations fall — Pinellas, Hillsborough, Sarasota, Charlotte and Lee — their combined decline of 24,212 is nearly 42% of the total drop-off for the state. But the five represent less than 18% of the state's population.

Looking at just cities statewide, their combined population fell 0.5% from April 2008 to April 2009 as compared to the total state decline of 0.3%. Gulf Coast cities' numbers dropped even more, declining 0.8%.

And for every Gulf Coast county, the municipal population dropped. That means less state and federal revenue sharing dollars here.
Leading the urban flight is Cape Coral, hard hit by the foreclosure crisis. The city lost 2,922 residents, 1.8% of their 2008 peak population of 165,774. Combined, Lee's cities lost 1.1% of their population, but that may be an underestimate of the decline.

First, Lehigh Acres is not incorporated, so its obvious decline in residents (if their massive foreclosure numbers mean anything) shows up in the unincorporated figures.

Lee's unincorporated area population dropped by 5,499 over the past year —1.67% — more than twice the percentage of the next biggest drop for an unincorporated area of the Gulf Coast. Second place goes to the unincorporated area of mostly municipal Pinellas County. There, the unincorporated area declined by 0.78%, the same percentage for the county as a whole.

Pinellas' biggest city, St. Petersburg, came in second to Cape Coral in the region for the largest decline in absolute numbers, dropping 2,730 — 1.1% — bringing St. Pete's population back under a quarter million to 248,729.

But it was St. Pete Beach that took it on the chin the most in percentage terms for Pinellas cities with a 3.1% drop. That cut the population 311, setting it back to pre-2000 census levels.

It was also the biggest percentage and absolute drop for any Gulf Coast barrier island community, even exceeding the total decline of the three Lee County cities losing population — Sanibel, Ft. Myers Beach and Bonita Springs only lost a combined 310 residents. The more affordable city of Fort Myers gained 130.

After having growth averaging just one-quarter percent a year this decade, St. Pete Beach is suffering the double-whammy of the recession while being tied up in multiple lawsuits over their mini-hometown democracy restrictions.

The law limits their ability to redevelop areas now looking more like a ghetto than the one-time prosperous beach town it once was.

Those rules, adopted by a bare majority in 2006, require citizen votes on any changes to the city's comprehensive plan. And when the town adopted a redevelopment plan by 57% last year, it got sued by some of the very people who put the voting mandate in place.

Naples and Sarasota, two of the wealthiest communities in Florida, now rank among the biggest losers.

Naples' population sank 4%, the largest percentage drop of any city of more than 3,700 residents in the state. It was also the biggest percentage decrease of any area along the Gulf Coast. That puts it just ahead of Punta Gorda's 3.75% retrenchment, likely tied to post-Hurricane Charley manufactured housing leases expiring.

Sarasota lost population for the second year in a row, dropping another 3.65% this past year to 53,160. Since its 2007 peak of 55,644, Sarasota has lost nearly 4.5% of its residents. Venice, in South Sarasota County, lost 1.4% of its population from 2008 to 2009, but more affordable North Port, despite leaping over Sarasota to become the largest city in the county in 2008, dropped by just a hair under 1%.

In the end, the biggest loser could be the state's influence in Washington, D.C. State Sen. Mike Bennett, R-Bradenton, points out that at one time it was believed Florida might gain three seats in Congress next decade, but that could be reduced to one or two if the April 1, 2010 census numbers show further declines.

Doctors' diagnosis
David Denslow, who holds a doctorate in economics, is a professor at the University of Florida and a research economist with BEBR. He cites restrictions on housing supply that drove home prices up — especially in places like Naples and Sarasota — that have now sent people in those areas packing.

As small as the overall state population decline is, another doctor of economics, Hank Fishkind, took issue with it recently in a radio interview saying he believes it's not as bad as the numbers say. He says the state is losing population, but he thinks it's overstated because of the way it's measured. The estimates are based on household size, building permits, electrical hookups, or more so than ever — disconnections.

Fishkind believes “flaws” in the methodology used by BEBR give false signals. He says it's because the meters in speculative homes were turned on even though nobody was home, but later were turned off, thus suggesting losses when there actually were no gains in the first place.

To fix the problem, Fishkind suggests that future estimates be correlated to things like grocery sales or school enrollment.

On the other side, two Lee County officials think the declines are steeper than the numbers indicate.

Wayne Daltry, a veteran planner who headed the Southwest Florida Regional Planning Council for 20 years, and now is the “Smart Growth Lee” director for the county, says the numbers don't take into account the loss of thousands of illegal aliens who left when the construction industry dried up.

Jim Moore, the county's director of economic development, agrees with Daltry, saying, “I think the number is probably larger than what's officially being reported. Moore believes there were probably a lot of kids who “didn't have to prove citizenship to go to school.”

When their parents lost construction or tourism jobs and moved, students left the school system — 5,049 across the region. The Lee school district lost 1,090 students between the November 2007 and 2008 counts, the same percentage as the most recent year's population decline countywide, 1.4%.

Charlotte and Sarasota counties were the biggest losers of public school students on a percentage basis. Pinellas and Hillsborough had the biggest drop in total students.

Asked if the declines are changing the way they approach their mission, Moore says, “I don't think it changes anything we're doing. Our whole effort has been to diversify with high wage, high value industry.”

Highwoods Properties' Ed Fritsch, president and chief executive officer of the largest owner and operator of suburban office properties in the Southeast, expresses similar sentiments. Highwoods, with offices in Tampa and Orlando plus nine others spread around the Southeast, has 2.9 million square feet in 20 buildings in the Tampa Bay area.

Speaking from the company's headquarters in Raleigh, Fritsch says the numbers, which he calls “infinitesimal,” won't alter his company's strategy. In fact, he looks at the situation as a positive though acknowledging the opportunities may be 12-18 months out when the first of 78 million U.S. baby boomers turn 65.

BEBR's director, Stan Smith, oversees population studies, and says Florida's population growth won't come back any time soon. “Growth will be fairly slow for the next year or so but will increase early in the next decade,” he says, but that's too late for the state to gain more than one or two seats in Congress.

Nevertheless, Fritsch is optimistic, saying, “We would like to make larger investments as opposed to fewer investments in the state of Florida. It looks like a good buying opportunity.”

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