Paradise found ? The tide of older Americans moving into the Sunshine State is rising. While the newcomers bring affluence, policymakers are confronting the issues caused by their rapidly swelling ranks

EconSouth, Fall, 2004

William G. Smith, president and chief executive of Capital City Bank Group in Tallahassee and a member of the board of directors of the Atlanta Fed, described the influx of deep-pocketed residents as "an amazing phenomenon that provides for a lot of stability."

Deals with older customers who offer tens of thousands of dollars in cash on the spot are not uncommon for Florida car dealers and homebuilders. "Retirees don't drive around in junkers," he said.

In 2000, direct spending by Floridians who were 50 and older, along with the value of their federal health benefits, was estimated at $150 billion, according to the Destination Florida Commission, which was created by Florida Gov. Jeb Bush to explore Florida's future as a retirement destination. Because retirees don't typically use schools and they pay a large sales tax (Florida has no income tax), they represent a net benefit to the state of $2.8 billion in taxes. "A healthy retirement industry is critical for the overall current and future prosperity and well being of the state of Florida," the commission's 2002 report states.

Shadows in the sunshine?

But money is not enough to offset a growing perception that growth has diminished the appeal of Florida as a retiree destination, a concern that prompted Gov. Bush to form the commission to study the issue. Some 59,000 "mature" residents left Florida in 2000, according to the report.

Apart from challenging lifestyle questions, difficult issues of dependency confront Florida policymakers. As they age, Floridians will increasingly strain federal Medicare programs for the elderly, and more and more people may draw from the largely state-funded Medicaid programs for low-income households.

Given these pros and cons, more longtime Floridians are ambivalent about the retiree influx and the economic growth that comes with it. For example, while they enjoy more options for shopping, they cope with worsening traffic.

Growth along central Florida's Interstate 4 corridor and elsewhere has sparked increasingly testy debates about growth. A vocal antigrowth movement is winning adherents with an agenda to slow the pace of in-migration, ease the paving of rural land, and preserve as much of Florida's natural environment as possible.

States compete for retirees

As Florida grapples with sprawl and other social issues, neighboring states are boosting their efforts to gain a larger share of retirees. In part because of the migration of older Americans, the Southeast grew faster than the rest of the country. Between 1990 and 2000, population for the six Southeastern states increased 18.5 percent to nearly 42 million, or 15 percent of the country. By contrast, the United States as a whole, with a population of 281 million, grew approximately 13 percent during the same period. The states with the highest rate of out-migration included New York, Illinois, California, New Jersey, Michigan, Ohio, Pennsylvania, Massachusetts, and Connecticut.

Migration shifts are evident at Houston Springs, a new community now under construction in Perry, Ga. About 150 miles north of the Florida line off 1-75, Houston Springs targets the same active adult demographic segment that many Florida developments do. Developers plan to build 2,000 units (for 4,000 people) on 494 acres with homes costing $100,000-$400,000, prices that are lower than those of comparable communities in Florida, especially along the oceanfront.