It’s Simple Math

There’s a tsumani coming to Florida and we are not prepared for it.

Those were the startling words we heard last week from a well-known demographer at Leadership Florida’s annual meeting at the Grand Floridian in Orlando.

The “tsunami” refers to a wave of people who will be heading to the Sunshine State in the coming years to seek tax relief, better weather and quality of life, according to demographer Ken Gronbach, an expert who is often hired by Fortune 100 companies to predict trends based on population and other factors that drive sales and lifestyle decisions.

Grombach is bullish on Florida but he also cautions that the state has no idea what’s about to happen and is deficient in a number of areas including housing. We just don’t have enough to serve the needs of the people who will be seeking a new life in Florida.

Interestingly, it’s not the “millennials” who will be driving growth but the tail end of the baby boom generation —those born between the late 50s and 1964 that will be fueling the growth.

“You don’t need a crystal ball,” Gronbach told Leadership Florida, a non-profit that consists of community leaders from throughout the state. “It’s simple math. We can predict people’s behavior based on their age and by looking at the Census we can know the size of the market that’s coming.”
So what does that mean?
Well…

Florida’s will explode (with people)

Bigotry will end (future generations are free of bias)

China, Japan and Russia have big demographic problems that they cannot avoid.

China’s economy will implode (their one-child policy was a big blunder)

Europe will be forever changed (immigration will change its character)

Funerals will double (the party will end for boomers)

Marijuana will be bigger than wheat (Cheech and Chong were right)

“We can accurately forecast what’s next based on the rise and fall of populations,” he says. “But it’s often missed by smart people who don’t recognize the power of demography.”

Now this may sound a little depressing, but if you see Gronbach he’ll tell you that’s it not.

“I can’t see a single number that worries me,” he says talking about the United States. “We won’t run out of food or room…the future is bright.”
In fact, one of his most provocative statements is that he does not foresee a recession anytime within the next 20 years because of population growth and trends.

But, if you’re someone who is disturbed by growth, Florida may not be the place for you.

In fact, in our own little world we are seeing some interesting growth trends. According to the Census, Boca has reached a milestone of 100,000 people and Delray is now around 70,000 people. Both cities have experienced double digit growth since the last Census in 2010, Boca at about 18 percent and Delray at about 14 percent.

And according to Gronbach we have only just begun.

“I live in Florida half the time—and if you go in-season the elderly in Florida range from 75- to 95-years-old. Boomers right now are 54 to 73, so they aren’t even there yet.”

But they are just off shore and they are descending on Florida “like locusts.”

Let’s let Mr. Gronbach explain: “What is going to happen is you have a tsunami offshore because the people, the generation right in front of the boomers, which is called the “silent generation,” they were born 1925 to 1944 and there are just over 50 million of them that were born in the U.S., with no immigration during their start up and even during their tenure. That would further have complemented their generation. But, instead, they are tiny, the smallest generation of the last 100 years.

So people ask me, what is going to be influenced by the boomers? And, I say whatever is going to happen, whatever these people consume, whatever senior citizens consume, be it health care or elder care or death care [i.e., funeral homes, etc.], or cruises or whatever, will be dramatically enhanced by the boomer generation of 80 million people. They are right offshore. It is coming, people have been lulled into thinking that it has already hit, and it has not. The boomers will change anything and everything. It does not matter, there are so many of them it will be a case of rising tides lift all boats.”

According to Gronbach, we will be 25 million housing units short in the United States as the children of Boomers begin to move out of their parents homes.

Not part of his presentation– but certainly a factor– were the changes recently made to the tax code which limits the deduction of state and local taxes on our federal income tax. States such as New York, New Jersey, California and Connecticut are seeing an exodus of tax burdened residents to places such as Florida and Texas.

It is estimated that luxury properties in Florida cost a third less than comparable properties in New York, a stat that savvy developers are beginning to explore and exploit.

Ultimately, Gronbach’s presentation is a very positive one for the United States especially as we ramp up our competition with China, whose one child policy he describes as the single greatest demographic blunder of all time because it has created an aging society that cannot take of its young or old.

But like everything, growth has its plusses and minuses, especially if we don’t prepare.

At some point, we have to address traffic and congestion issues, infrastructure, climate change (mysteriously absent from his presentation) and a host of other concerns. We also have to address land use and have an intelligent conversation about how to limit sprawl which creates traffic and burdens our fragile environment.

Still, Gronbach’s “math” makes for intriguing discussion. We ignore the numbers at our own peril. It’s simple math.