The U.S. Census Bureau predicts that Florida will edge past New York into third place in population by 2011, while California and Texas remain in first and second places.
That's big news in the political arena — since it will re-shape distribution of seats in the U.S. House of Representatives — but it comes as no surprise to home builders. The Sun Belt's three biggest states have dominated housing production for 30 years. But the degree of that domination is also increasing, which seems to point toward severe challenges for builders in those states.Land price crunch?
If we look at the current pressure on land prices in hot markets across the Sun Belt, we can only conclude that it may be just beginning — since California, Texas and Florida will each gain more than 12 million people between 2000 and 2030, according to the Census Bureau study. That will account for 46% of total population growth. Texas may have room for all those people, but California and Florida will have to make room.
It's not just the Big Three that will face massive population growth. The whole Sun Belt is under assault, with 88% of population growth projected in the South and the West.
Arizona is projected to add 5.6 million people over the same period and North Carolina 4.2 million to round out the top five in population gains. That will push both of those sunny states into the top 10 in population, with Arizona rising from No.20 to No.10 and North Carolina from No.11 to 7. Obviously, the pressure will be withering to provide infrastructure as well as housing to meet the demands of such growth.
Meanwhile, the Northeast and Midwest face challenges of a different nature as the population continues to tilt south and west. Rust Belt states Michigan and New Jersey are projected to drop out of the top 10. The share of population in the Northeast and Midwest will decline from 42% in 2000 to 35% in 2030, while the South and the West's share jumps from 58% to 65%.
The Census Bureau's projections come from the Population Division, which bases its estimates on data from the 2000 census, fed into a mathematical projection model that assumes continuation of current state trends in fertility, mortality and domestic and international migration. In other words, things could change, but don't count on it — because these trends have been in place for some time, and just seem to be accelerating.
The projections indicate that the five fastest growing states over that 30-year span from 2000 to 2030 will be Nevada (114%), Arizona (109%), Florida (80%), Texas (60%) and Utah (56%).Population also aging
In 2000, each of the 50 states had more people under 18 than 65 and older. But in 2030, 10 states are projected to have more senior citizens than people under 18: Florida, Delaware, Maine, Montana, New Mexico, North Dakota, Pennsylvania, Vermont, West Virginia and Wyoming.
As the oldest baby boomers (born in 1946) become senior citizens in 2011, the population 65 and older will begin to grow faster than total population in every state. In fact, 26 states are projected to double their populations of senior citizens between 2000 and 2030.What does it mean for builders?
For one thing, these numbers tell us builders ought to begin now to correct one of the biggest shortcomings we see all across the country — a dearth of strategic planning. Building the same type of product, for the same demographic and psychographic profile of buyers, is not the way to make these population trends work in your favor.
If you build in the Sun Belt, we have to believe high-density housing forms are in your future. Stop complaining about the cost of land, and start looking at these as the good old days (that won't last). A few years from now, detached homes built eight to the acre may be the norm, not the exception.