In Florida, school principals, real-estate developers and economic-development officials are scrambling to solve a troubling mystery: Where did the kids go?
Across a state long plagued by shortages of teachers and classrooms, school-enrollment figures show declines or no growth this fall. The Palm Beach County public-school system in south Florida saw its first enrollment drop since 1971 -- a 1.9 percent decline to 170,582 students. Broward County, surrounding Fort Lauderdale, lost 3.1 percent of its students. Growth in Orlando and Tampa has slowed to roughly half its previous rate. Overall, the number of students in Florida public schools now is expected to grow by just 30,000 students to 2.67 million, well below recent annual increases of about 65,000.
The reason: School officials say that even though it has cooled in recent weeks, Florida's overheated housing market -- with the median existing-home price up 90 percent since 2001 to $248,400 in August -- is pricing young families out of the state.
Ranking fourth in population among states, Florida remains one of the fastest-growing places in the country, adding an average of 1,000 new residents a day to its total of 18.3 million. But the state's tried-and-true formula of plentiful jobs, abundant sunshine and low taxes suddenly isn't enough to hold onto thousands of families as real-estate speculators and empty nesters are snapping up property, shrinking the supply of affordable homes for newcomers who traditionally pumped up school enrollment. And, despite being spared so far this year, there are signs of growing weariness following eight hurricanes that plowed into the Sunshine State in 2004 and 2005, causing insurance rates to skyrocket and some residents to move away before the next big storm hits.
Last November, Kevin and Christy Kilpatrick left Plantation, near Fort Lauderdale, for rural Lawrenceburg, Tenn., to escape south Florida's escalating living costs, congestion and hurricanes. In October, Hurricane Wilma knocked out their power and water for more than three weeks; the next month, they bought their four-bedroom Tennessee house on 10 acres for about $280,000 -- a steal compared with Florida real estate.
"We knew we couldn't afford to get what we wanted down there," says Mr. Kilpatrick, a 37-year-old voice-over artist. He and his wife plan to have children and decided "this would be a better quality of life for our kids."
While school officials say a pause in the state's breakneck enrollment growth will help them to catch their breaths after years of frenzied teacher hiring and building expansion, economic-development officials are concerned that businesses will be deterred from moving to or expanding in Florida because of high home prices and not enough workers.
Some Florida officials, though, insist that the surprising slowdown is a temporary blip, with school-enrollment growth in Florida poised to accelerate later this decade because of rising births and immigration throughout the U.S. In addition, the weakened housing market, including a 34 percent decline last month in sales of existing single-family homes in Florida compared with a year earlier, could bring some relief to families suffering from sticker shock. Florida is home to four of the 10 most-overvalued housing markets in the U.S., according to economic consulting firm Global Insight Inc. of Waltham, Mass., and National City Corp., a Cleveland bank.
"We will see the affordability of housing in Florida improve," said David Denslow, an economics professor at the University of Florida. "Much of Florida is still cheaper than New York, Boston, California and other areas."
Still, what's happening in Florida schools contrasts sharply with school districts in other U.S. metropolitan areas that have robust population growth. This fall, enrollment in the Wake County, N.C., public-school system, including Raleigh, rose 6 percent, or 7,388 students, to 127,767. School growth rates are holding steady in Las Vegas and surrounding Clark County, the country's fifth-largest school district. And enrollment in the suburban Atlanta district of Gwinnett County, Ga., increased by 5.1 percent to 151,903 students.
In Tampa, Shari Beaubien, principal at Chiles Elementary blames her school's 10 percent enrollment dip -- about 90 fewer students -- on the conversion of four nearby apartment buildings to upscale condominiums. That pushed out many young families, and few newcomers have moved in. When the principal called the property managers last month, she was told 515 units were empty.
When two apartment complexes in West Palm Beach for residents on public assistance became condos, enrollment at the nearest elementary school dropped by about 100 students, Palm Beach County Schools demographer Art Wittman says. In all, more than 12,000 rental units have gone condo, with a third of local housing now owned by investors or second-home buyers who don't have school-age children, he estimates. Last year, the number of Floridians between 4 and 19 years old rose 1 percent from a year earlier, its tiniest growth since 1991, according to Moody's Economy.com, a West Chester, Pa., research firm.
"In some new-home neighborhoods in Florida, there are more 'for sale' or 'for rent' signs than there are drapes in the windows," adds Jack McCabe, a real-estate consultant in Deerfield Beach, Fla.
More empty nesters and other property owners without school-age children isn't necessarily bad for local school districts and municipalities, which get to collect their property taxes without having to take in additional students. Economists note the longer-term concern is that these homeowners often don't support increased school spending and frequently oppose tax increases for education at the polls.
Debbie Terry, director of instructional staffing and recruitment for the Collier County school system in Naples, says the district is suffering a "double whammy" from steep real-estate prices. About 25 new teachers hired this summer later rescinded their contracts because they felt home prices in Naples were too high. Meanwhile, a growing number of more-experienced teachers have been selling their homes to lock in big profits made during the boom -- and then moving to less-expensive places like south Georgia. Collier County enrollment was essentially flat at 43,076 this school year.
Despite recent housing-price declines, including August decreases in 12 of 20 metro areas tracked by the Florida Association of Realtors, economic-development officials worry that real-estate costs remain high enough to make it hard for at least some employers to recruit workers and expand their businesses. Florida generally is a low-wage state due to its reliance on service jobs, particularly in tourism. Another area of concern is the slowing growth of Floridians between 25 and 59. That primary labor pool is expected to constitute 45.7 percent of Florida's population in 2010, down from 46.7 percent in 2000.
For schools across Florida, the consequences of declining or flat enrollment are immediate. Since state funding is based on student levels, local administrators are being forced to cut expenses and reassign teachers to different schools. No major layoffs are expected, though, because most school districts start the academic year with dozens of teaching vacancies that can now be eliminated. In Tampa, the enrollment drop cost Chiles Elementary three teachers. The Parent Teacher Association donated money to keep a secretary in the media center after that position was eliminated.
The unexpected changes are forcing some districts to reconsider building plans and proposals for additional taxes to pay for new schools. Palm Beach officials, for example, have postponed construction of two schools that are part of a five-year plan, Mr. Wittman says.
