Is NYC Mayor Bill de Blasio the Answer to Florida’s Erratic Housing Recovery?
When the housing bubble finally burst in 2007, Florida was one of four of the hardest-hit states in the U.S., along with Arizona, New Mexico and California. Millions of Floridians watched their home values plummet. Property values dropped anywhere from 25 to 75 percent. Homeowner equity vanished seemingly overnight. Many with maturing adjustable rate mortgages lost their homes through foreclosures or short sales. Others found themselves owing more than their homes’ market values. With the U.S. economy growing at barely three percent, recovery in the housing market in Florida has continued to sputter from month to month.
You may ask yourself what bearing the election of New York City Mayor Bill de Blasio would have on the Florida housing market. Well, from a tax burden perspective, what has historically been bad news for New York taxpayers has resulted in great news for Florida. Having blatantly run on a platform of raising taxes even higher, the new mayor appears to be bad news personified for taxpayers in the Big Apple. IRS data indicates that higher taxes leads to an increased shift in people, their wealth, and their businesses. Between 1992 and 2012, nearly 96 billion in adjusted gross income (AGI) has transferred from the state of New York to Florida. Of this total, $ 2.68 billion transferred directly from the five counties that constitute the New York City metropolitan statistical area (MSA) to Florida’s Broward County alone. Even more data substantiates the trend.
Stan Smith, population program director at the University of Florida’s Bureau of Economic and Business Research (BEBR), stated that Florida likely will overtake New York in population at some point in 2014 or 2015. “Florida’s growth for many years has been due primarily to migration,” Smith said. “Typically, 80 to 90% of growth in the state has to do with people moving in.” The U.S. Census bureau released its state-by-state population estimates for 2013. As of July 1, the population of New York, presently standing at 19,651,127, exceeded Florida’s 19,552,860 total residents by only 98,267, according to the data. Demographers find that New Yorkers are moving to Florida at a rate of over 50,000 a year, twice the number of Floridians who head to New York. This fact has political ramifications as well: As Florida exceeds New York in population, it will also add more seats in the U.S. House of Representatives at the expense of New York.
It is true that some northern immigrants are looking to exchange snow shovels for golf clubs, but contrary to what many think, these expats are not all senior retirees. More than half of the new arrivals are working, taxpaying individuals between the ages of 25 and 64, this according to an AP analysis of data from the U.S. Census’ American Community Survey. Almost two-fifths of those were under age 25!So in answer to the question “what difference would it make?”— it is clear that Mayor de Blasio’s policies will only accelerate the phenomenon. With the resulting influx, the demand for housing in Florida will outstrip supply, thereby increasing the values of existing residential properties. Not only that, but there will be an increased demand for commercial properties, and an increase in jobs in new construction and throughout the associated supply chain. This is all great news for Florida and its frustrated homeowners.