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 No. 4.
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 jumped 50 and 60 percent, respectively, above the 2005 level. Net domestic migration into Georgia doubled in 2006.
For years, Florida had led the nation in domestic migration, but by 2007, the state's annual domestic migration had dropped to 17,000. In 2008, Florida lost a net 19,000 residents to other states; in 2009, it lost 31,000. Did 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?
The answer seems to be no. Florida'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 next year.
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. This repeal should help keep home prices low.
Compare Florida's renewed vitality, with, say, California, which lost nearly 1.7 million people to domestic migration between 2000 and 2011. California's high cost of living seems likely to discourage new residents from moving to the state. If 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 and glory.
That's why the Sunshine State has ousted the Golden State as the place for optimists to watch.
Wendell Cox is the principal of Demographia, a public policy consulting firm. This op-ed is an adaptation from a piece that first appeared in City Journal.