Reuters: As hurricanes loom, many in Florida Keys flee

[jasons2k]

As hurricanes loom, many in Florida Keys flee
Wed May 3, 2006 10:54 AM ET

By Laura Myers

KEY WEST, Florida (Reuters) - Spiraling living costs, lingering trauma from past evacuations and fear that one day million-dollar homes could be reduced to rubble or again flooded are driving people out of the vulnerable Florida Keys as another hurricane season looms.

While most of Florida experiences one of the country's fastest population growths, the number of people living in the low-lying 110-mile (180-km) island chain at the southern tip of the peninsula is slowly dwindling.

In the last two years, residents have been ordered to evacuate six times up a narrow, mangrove-fringed 126-mile (200-km) road, the Overseas Highway, linking the Florida Keys to the mainland.

When Hurricane Wilma swept by on October 24, it flooded about 3,700 of 15,000 homes in Key West with a foot or more of water and destroyed 1,000 cars. Most residents were stunned.

"We're seeing adjustment disorders, post-traumatic stress," said Betsy Langan, assistant director of Womankind Inc., a health services provider. "Because of the hurricanes, people are exhibiting sleeplessness, difficulties in concentration and are feeling hopeless and overwhelmed."

On top of that, property values have soared beyond the reach of most working families. Home insurance rates are sky-rocketing. And salaries can't keep pace.

"You pay $400,000 for a trailer that's going to be junk soon. It's incredible," said Jose Cuevas, a moving company manager who commutes to work in Sugarloaf Key from Miami each day -- a 300-mile (490-km) round trip.

The moving-out business is booming. "Clients are worried about insurance. One said, 'They only want rich folks,'" Cuevas said. "They don't want to go, but they have to."

A palm-fringed paradise that boasts the only living coral reef in the continental United States, the Florida Keys is the sort of island paradise that many dream about. But much of it is hemmed in by turquoise waters and the island at the end of the chain, Key West, is densely populated and usually crowded with tourists.

Home prices in the entire Florida Keys average $846,000, and in Key West, the main city, $935,000, according to Coldwell Banker Schmitt Real Estate.

The head-turning price of real estate, and limited land for development, also is putting a squeeze on renters as apartments and mom-and-pop motels are converted into condominiums and sold off as second and third homes to wealthy retirees.

"We're gun-shy about going through another hurricane. We gave up on buying a home here in Key West," said Dorothy McCoy, a daycare provider who with her painter husband Denis recently left the Keys.

Keys homeowners are also socked with Florida's highest insurance premiums. Citizens Property Insurance, the state-run insurer of last resort, proposed a base windstorm rate of $20.91 per $1,000 of insured home value for this year.

Furious Keys officials threatened to sue the state, and a grass-roots organization, Fair Insurance Rates in Monroe, or FIRM, met with Gov. Jeb Bush, brother of U.S. President George

W. Bush, in April to seek support.

Florida insurance regulators rejected the rate filing on Monday and Insurance Commissioner Kevin McCarty froze Keys' windstorm rates at the 2005 level of $20.58 per $1,000, still the state's highest and two to three times as high as the rates in other hurricane-hit counties.

Key West resident David Lane and his wife Pam recently listed their historic 2,000-square-foot (186-sq-m) home at $1.5 million and plan to head to Asheville, North Carolina. Their windstorm insurance premium: $12,700.

"If a really bad storm hit here, a big part of the value of our house is the land. What would the land be worth?" David Lane said.

"I don't want to feel like I'm turning into an old weenie. We really love Key West, but evacuating is hard. It just gets tedious."

Many residents feel the same way, and the result is a slow exodus from paradise.

The population of Monroe County -- the entire Florida Keys -- dropped 2.16 percent to 76,329 in the year to July 2005. In the last five years, the county's population has shrunk 4.1 percent at a time when most areas in Florida are growing rapidly, according to a U.S. Census report in March.

"These are people who've lived here 20 to 25 years," said John Strong, owner of Pak Mail, a packing and crating franchise. "They're going to Arizona, North Carolina and Central America, seeking no hurricanes."

The problem is acute for teachers, nurses and police officers. An increasing number of Monroe County sheriff's employees commute from Miami. Sheriff Rick Roth is adding 18 bunks at a detention center which could be used by the commuters in an emergency.

A recent Monroe County School District poll found that 7 percent of families with school-aged children planned to leave when the school year ends in May.

"We can't get nurses, we can't get doctors," said John Dolan-Heitlinger, an advocate for affordable housing for working professionals.

On Big Pine Key, resident Pam Henry said she is struggling to pay $16,000 a year in property taxes and home insurance, and is moving to central Florida.

"The hurricanes put the icing on the cake," Henry said.

[gatorcane]

Great article! I learned about this a few weeks ago. One of our members, Recurve lives in the FL Keys and says people are starting to move away...

But despite this, Developers are still flocking to the FL Keys and it makes me angry because the FL Keys should not be built on unless strict building codes are enforced:

The world famous Holiday Isle in Islamorada is going to be demolished and replaced by a Luxury resort with Condo Units starting at $1.5 million....

http://www.sun-sentinel.com/business/realestate/sfl-zceebraid25apr25,0,1811284.story?coll=sfla-busrealestate-headlines

[jasons2k]

My father lives on Big Pine Key. I don't think he will be staying there much longer either. He loves the lifestyle, and for him it's not about the hurricanes, it's more about the cost of living getting out of control.

I don't think this is exclusive to the Keys either. We used to live in Tampa...and once upon a time a nice house there was affordable. Not any more, unfortunately.

[MiamiensisWx]

My father lives on Big Pine Key. I don't think he will be staying there much longer either. He loves the lifestyle, and for him it's not about the hurricanes, it's more about the cost of living getting out of control.

I don't think this is exclusive to the Keys either. We used to live in Tampa...and once upon a time a nice house there was affordable. Not any more, unfortunately.

I agree. With or without hurricanes, this problem is the wave of the present and will be the wave of the future.

[gatorcane]

My father lives on Big Pine Key. I don't think he will be staying there much longer either. He loves the lifestyle, and for him it's not about the hurricanes, it's more about the cost of living getting out of control.

I don't think this is exclusive to the Keys either. We used to live in Tampa...and once upon a time a nice house there was affordable. Not any more, unfortunately.

You are right, I live in Palm Beach County right now and although I personally feel I make a good salary, I still can't afford the avg. cost of a 3Br 2BA home which is $400,000. I am seriously considering moving somewhere out of Florida

[T'Bonz]

Florida used to be affordable. Not any more. I don't know how first time home buyers do it. Too crowded too, hurricanes or not, the population in places other than the Keys isn't dropping. When we are retirement age (another decade), sayonara. I'm OUTTA here.

As for the Keys? Will turn exclusively into a rich person's paradise. Regular folk need not apply. As for those now commuting from Miami to work? That'll stop too, the cost of gas is too high. The rich will have to hire/board their own teachers, firemen, cops, etc.

[gatorcane]

Yes, it is too expensive here......

about the only people who can afford it here now are

1) top 10% salaries of high-paying professionals (e.g. Doctors, Lawyers, and successful Business Owners)
2) Retired folks with lots of money saved up through their lifetime. Usually these people come from the Northeast (e.g New York, New Jersey, and Boston area)

That means no needed professionals can live here anymore:
Policeman,
Nurses,
Teachers,
etc

Not to mention the people are extremely rude and full of themselves down here....


what you are saying T'Bonz is not that far from reality..

[Patrick99]

Florida used to be affordable. Not any more. I don't know how first time home buyers do it. Too crowded too, hurricanes or not, the population in places other than the Keys isn't dropping. When we are retirement age (another decade), sayonara. I'm OUTTA here.

As for the Keys? Will turn exclusively into a rich person's paradise. Regular folk need not apply. As for those now commuting from Miami to work? That'll stop too, the cost of gas is too high. The rich will have to hire/board their own teachers, firemen, cops, etc.

I think that the hurricanes are only the icing on the cake - the real problem is that nothing in the Keys is affordable. Nothing. The Keys already *have* turned exclusively into a rich person's paradise.

Miami-Dade, Broward, and Palm Beach are not that far behind, though it will take longer...we get all these rich people from S. America and Europe buying places here without regard to the cost, driving prices up beyond the reach of common people.

When we get a major hurricane in South Florida (yes, "when," not "if"), this problem will just be exacerbated, I'm afraid - everything to suffer damage will be "rebuilt" bigger, flashier, pricier. The same people for whom price is no object will swoop in again and drive prices higher.

[Patrick99]

[quote="T'Bonz"]Florida used to be affordable. Not any more. I don't know how first time home buyers do it. quote]

I did it....by stretching my income to its very limit, just to buy an 800 square foot 1/1 for $200,000. Insane. And it's not even on the water, nor does it have any kind of view. Not a lot I could do about it, though. It was either buy it then or watch the price get higher.

[Aquawind]

Yep.. Eventually rich folks and peasants will be it south of Tampa. I have had to raise my rates and it really disappoints those retired folks and working class on a budget. The trailers won't be getting replaced..unless it's by FEMA. I don't know if the Port Charlotte(Charlie) trailer city will ever be gone. It's so annoying over half of the places sit empty most of the year and thus those people are not spending money year round other than to cut the lawn. They pay taxes but so do the rest of us. Money Wins..

Were also finding out vacationers can find better prices elsewhere and still get out of the cold. Most of the fellow business owners I talk to are had a mediocre or down year even though the bias real estate driven reports are trying to make things look all peachy down here. With the immigration issues and financial issues the Trades are hurting and have no choice but to raise rates beyond the working class. This is going to be a brutal year down here hurricanes or not..

[gatorcane]

I did it....by stretching my income to its very limit, just to buy an 800 square foot 1/1 for $200,000. Insane. And it's not even on the water, nor does it have any kind of view. Not a lot I could do about it, though. It was either buy it then or watch the price get higher.

Well I think that the situation is like the 1920s...what put a end to that real estate boom was a major hurricane that wrecked the area. What I think will happen is that one CAT 3+ into Tampa, Miami, etc. will also start causing a mass exodus out of here.. just like the 1920s.

[GeneratorPower]

I think the free market will eventually cause wages to increase for service jobs. Policemen, etc, will have to have places to live. You can't get police officers to work for nothing. They deserve to have a decent place to live if they work a job like that, and they know that, so if Key West can't get cops, they'll have to raise the salaries. Then they'll have to raise taxes. It should regulate itself this way.

[Aquawind]

State Income Taxes...

[GeneratorPower]

County property taxes would be better in this case.

[gatorcane]

Generator, sure in a utopia it works like that. In order to afford the avg cost of a home in Palm Beach, you would have to make $116,000+ a year, according to a Palm Beach Post article I read - and that will get you a modest 3br and 2 bath - that is it. Also taxes and insurance (hurricane) is not even factored in to that value.

I don't seeing policeman making that much money.

[MiamiensisWx]

This is also a HUGE problem for teachers and heightens the immigration issue problems.

[gtalum]

State Income Taxes...

That will never happen. The state government is well in the black and local municipalities don't have the power to do it.

I also don't foresee the real estate collapse that boce chris keeps bringing up. There may, MAY, be a small decrease in property values. Maybe as extreme as 10%, but no more. Florida has something like a 1000 person per day increase in population. The 1920's land boom happened because everyon einvested in remote land but no one moved in.

That said, I do think the condominium market may fall significantly more than teh single-family home market. The condo market is rife with speculators, and sales have all but stopped.

[MiamiensisWx]

I don't think the real estate market will collapse, either; however, I expect these problems mentioned to continue and constantly surface.

[gatorcane]

I don't think the real estate market will collapse, either; however, I expect these problems mentioned to continue and constantly surface.

I don't see a collapse (anymore), I see more of a steady decline as interest rates rise. If a major hurricane hits, there will be more of a higher declivity, then it will plateau....unless salaries quickly catchup or interest rates drop - expect no real estate market for many years to come....perhaps even a decade out it may get better.

just remember for all homeowners that brag about how much thy have made on their homes without working extra for it -

there is no free lunch or free money

[Aquawind]

State Income Taxes...

That will never happen. The state government is well in the black and local municipalities don't have the power to do it.

I also don't foresee the real estate collapse that boce chris keeps bringing up. There may, MAY, be a small decrease in property values. Maybe as extreme as 10%, but no more. Florida has something like a 1000 person per day increase in population. The 1920's land boom happened because everyon einvested in remote land but no one moved in.

That said, I do think the condominium market may fall significantly more than teh single-family home market. The condo market is rife with speculators, and sales have all but stopped.

I hope your right. I hate filling out more tax forms..lol It sounds like a best case scenario and it's still hard to be positive if your part of the working class and stretched thin these days.. Moving might sound like a easy way out to some..