Florida’s property reinsurance woes, U.S. visitors drive tourism industry, red tide lingers following Hurricane Ian, and more...
December 2, 2022 — This Week's Top Stories in Florida
Welcome to this week’s edition of Floridian Today, a newsletter about all things Florida — from politics, business, real estate, and climate. Reporting from the Sunshine State, these are the most important stories you need to know. To never miss an update, subscribe here:
Here’s the latest from Florida…
Florida’s property reinsurance woes
The Legislature will convene in a second special session this month as lawmakers work to address the continued problems within the state’s property-insurance system. One area that lawmakers will need to hone in on is reinsurance, which is essentially insurance for property insurers that helps these companies pay claims in the event of a major costly natural disaster event. Once a property insurers’ claims reach a certain threshold, reinsurance coverage is activated to offset expenses. Reinsurance costs have been driven up as storms have become more destructive and some reinsurers are withdrawing from the state as the expense of doing business has skyrocketed. According to one report by Gallagher Re, a reinsurance broking firm, reinsurance costs for Florida insurers has increased by as much as 50%. These expenses are transferred to homeowners through their home insurance premiums, where it can comprise nearly half of their premium costs. In the latest analysis by Fitch Ratings, overall reinsurance prices are expected to rise again in 2023, citing major disasters such as Hurricane Ian and the overall increasing trend of natural catastrophe claims. Category 4 Hurricane Ian, which devastated much of Southwest Florida in September, is estimated to have resulted in insured claims between $35 billion and $55 billion. Reinsurance rates are expected to increase by at least 10% in the next year, according to Fitch, and analysts express concerns that insurance companies will not be able to obtain all the reinsurance needed due to added regulations.
In Florida, insurers rely on reinsurance provided through the global private market and by the state’s Hurricane Catastrophe Fund, which is expected to total $10 billion in losses from Hurricane Ian. This far exceeds the $2 billion in state money that lawmakers approved to provide additional reinsurance coverage through the fund during the first special legislative session convened in May. As state legislators once again gather in Tallahassee to address the ongoing property insurance crisis, it is increasingly likely that additional tax dollars will be used to bolster reinsurance provided by the Hurricane Catastrophe Fund. However, lawmakers must look at making permanent reforms within the private market to provide stabilization and encourage insurance companies to do business in Florida, versus putting taxpayers on the hook for subsidizing a broken system.
U.S. visitors drive Florida’s tourism industry
The state’s tourism industry has rebounded solidly since the lows of the pandemic, but foreign visitors to the Sunshine State are not driving the record tourism levels. American tourists from other states are behind the fifth consecutive quarter of visitor growth over respective quarters in 2019, contributing to over 35.1 million Florida tourists in the third quarter of 2022. This is a 6.9% increase over 2021 and 8% above pre-pandemic levels in the third quarter of 2019. U.S. visitors have contributed to the growth as international travelers to the state has lagged behind pre-pandemic levels. Just over five million overseas tourists flocked to Florida in the first nine months of 2022, a 30% decrease from the same span in 2019 and visits by Canadian tourists are about 46% below 2019 totals. By comparison, the first nine months of 2022 saw 104.3 million tourists to the Sunshine State, a 15.3% increase over 2021 and 4.1% higher than the same period in 2019. 97.7 million of these visitors were U.S. tourists from other states – a net gain of more than seven million American travelers than in 2019. The 1.9 million foreign tourists to Florida in Q3 of 2022 is nearly 23% off from 2019, likely pointing to some apprehension of international travel amid fears of contracting COVID-19 dominating attitudes.
Red tide lingers following Hurricane Ian
Hurricane Ian made landfall in Southwest Florida on September 28 and while we were familiar with the devastation it has created onshore, problems still persist offshore along the coast. Since late September, from Lee County up to Sarasota County, a red tide bloom has been detected in the Gulf of Mexico and scientists believe nutrient-dense runoff created by Hurricane Ian is to blame. The heavy rains, storm surge, and flooding spawned by the category 4 storm has created nutrient pollution, causing the nutrients found in the soil and fertilizer from farms, fields, lawns, and septic tanks back into the Gulf of Mexico. In fact, following Hurricane Ian, red tide was detected at every beach in Sarasota County and nearly 100 water samples collected in November in Southwest Florida tested positive for the harmful algae. Red tide, known as karenia brevis, is an is a toxic concentration of microscopic algae that occurs along the coastline and kills fish, can cause respiratory irritation for humans, and results in a pungent odor along the beach. While scientists say hurricanes don’t create red tide blooms, they can promote environmental conditions that make it more widespread and intense, largely due to nutrient runoff. Beaches in the region are scattered with dead fish and the Florida Department of Health issued an exposure advisory this week in Collier County. In some cases, blooms can persist for over a year, but offshore winds can help drive the microscopic algae and contaminants away from the coastline.
Tired of Crime: Florida’s AG says people are flocking to the state because of its tough stance on crime
Florida Attorney General Ashley Moody, who recently won reelection in a landslide vote, says Americans from Democratic states are flocking to the Sunshine State because of its tough-on-crime approach. Moody, a former judge and federal prosecutor, said people are drawn to Florida's reputation as a law and order state and cited Gov. Ron DeSantis’ efforts to recruit police officers by providing $5,000 signing bonuses. "It's not rocket science. People are watching and they understand that leadership matters," the Attorney General said. Gov. DeSantis also signed legislation to combat organized retail theft, which Moody says will "make it easier to prosecute" criminals. Senate Bill 1534, which became effective on October 1, creates second-degree and third-degree felony retail theft crimes based on multiple retail thefts occurring during a specified time period in different locations. Someone who is accused of stealing 20 or more items, through five or more separate thefts within a certain period, can be charged with a second-degree felony. A person who steals 10 or more items, through at least five separate thefts within a specified period, can face third-degree felony prosecution. Moody said, “we respect our cops and give them the tools they need." "Be aware, if you move here, Florida is a law and order state, so if you're a criminal and you reside in Florida, you need to get out and other states need to do the same," she added. Despite the Attorney General’s comments, state CFO Jimmy Patronis has previously given a different reason for the mass migration to Florida, citing relative affordability in housing, low taxes, and business-friendly policies. Perhaps a convergence of the economic factors and public safety considerations are both driving the flow of new residents to the state.
Defying National Trends: Florida’s real estate market remains historically expensive
Across the United States, real estate markets are experiencing a decreasing trend in housing prices after seeing an unprecedented spike since May 2020 as higher inventory and climbing mortgage rates have somewhat curbed demand. In recent months, home values across the country have remained flat, but Florida’s real estate market has been immune to the national trends. Zillow says the major markets with the greatest year-over-year appreciation in home value were all in the Sunshine State – Miami at 23.2%, Tampa at 21.2%, Orlando at 20.9%, and Jacksonville at 19.8%. While Florida has seen a slowdown in housing demand since July 2022, it shouldn’t be confused with a market crash as prices remain high. Consider it a stabilization of prices and a correction of several factors that influence values. According to Redfin, the number of homes sold in the state decreased 26.1% year-over-year from October 2021 with 29,519 closed sales, the lowest point since May 2022 and a sign of a possible lull. And homes are spending more days on the market, indicating slowing competition. However, in South Florida, the Miami Association of Realtors recently reported that prices for single-family homes and condos in both Broward and Miami-Dade counties saw a 10% to 20% increase in October 2022 versus October 2021. This has defied increasing inventory, the slowing number of sales, and accelerating mortgage rates that have all historically contributed to flattening prices. In Miami, 2022 is on pace to be the second-biggest sales year on record behind last year. Florida saw the median sale price of a single-family home peak in May 2022 at $410,900, before modestly dropping months later to $392,500 in September 2022. Currently, the median sale price statewide for the month of October stands 14.2% higher year-over-year. Five years ago, in 2017, the average home price in Florida was $228,000.
Tampa Mayor Jane Castor files for reelection
In an unsurprising move on Monday, Tampa Mayor Jane Castor has completed paperwork for a second run to lead Florida’s third most populous city. Castor previously announced in January that she would run for reelection and made it official this week with the Hillsborough County Supervisor of Elections Office. The Democrat, who was the City’s former police chief, has led Tampa since her landslide election in 2019 and enters the race without drawing significant opposition. Castor has led through the COVID-19 pandemic and has overseen a major uptick in construction and development throughout the City, including billions of dollars in investment by private developers along the Hillsborough River. The Mayor’s campaign released a statement on her reelection bid saying, “Even while guiding Tampa through a pandemic, Mayor Castor implemented an ambitious strategy to Transform Tampa’s Tomorrow by upgrading long-neglected infrastructure, increasing access to affordable housing, enhancing workforce development, improving government services, and making resiliency and sustainability a central focus for Tampa. Tampa has become one of the most desirable cities in America,” the release added. Throughout her tenure, Mayor Castor has clashed with the City Council, including on the balance of power between the administration and council-members, hiring decisions, and on a climate action plan that would convert more than 50 million gallons a day of treated reclaimed water into drinking water or to replenish natural bodies of water. If reelected, Castor aims to make transportation, affordable housing, workforce development, and sustainability central to her focus in a second term.
Elon Musk backs DeSantis for president
Billionaire CEO of Tesla, SpaceX, and Twitter, Elon Musk has announced on social media that he would support Ron DeSantis for president in 2024 if the Florida governor decides to enter the race. Long speculated to make a run for the White House in 2024, Gov. DeSantis is viewed as a leading GOP presidential candidate and has growing support following a landslide reelection victory in November. "My preference for the 2024 presidency is someone sensible and centrist. I had hoped that would the case for the Biden administration, but have been disappointed so far," Musk said on Twitter. "As a reminder, I was a significant supporter of the Obama-Biden presidency and (reluctantly) voted for Biden over Trump," he added. If DeSantis decides to run, he’ll go up against former President Donald Trump, who announced his bid in mid-November and has gone on the offensive against the governor. DeSantis is set to release an autobiography in February, titled “The Courage to Be Free: Florida’s Blueprint for America’s Revival,” further adding to 2024 speculation.
Tampa Bay Rays will not return to Port Charlotte for the 2023 Spring Training season due to hurricane damage
Port Charlotte has hosted the Tampa Bay Rays for Spring Training since 2009, but damage sustained to Charlotte Sports Park as a result of Hurricane Ian in late September will force the MLB team to find a new home for spring games in 2023. Officials with Charlotte County and the Rays baseball organization have concluded that the stadium is not safe for players or fans and facility repairs could not be completed before Spring Training begins on February 25. Reports indicate significant damage in the parking lot and to sidewalks that limit overall accessibility to the ballpark. An alternative Spring Training site for the Rays has not been identified. The Rays and Charlotte County will work to create a plan restore the park’s conditions in a few weeks.
Pensacola’s Airport is among America’s most expensive airports to fly out of
Passengers flying out of Pensacola International Airport pay the highest dollar amount on airfare versus any other airport in Florida, according to CNBC, which ranked the 10 most expensive American airports to fly out of. In Pensacola, the average plane fare costs $462 and experienced a one-year increase of 51.28%, or a spike of $157 per ticket. Dane County Regional-Truax Field in Madison, Wisconsin, was ranked as the number one most expensive airport for passengers to fly out of in the U.S.
Ocala’s 1.8-mile Christmas light display opens
Guests in North Central Florida can enjoy a 1.8-mile drive-through Christmas light display at Ocala’s Florida Horse Park this holiday season until December 30. The Ocala Christmas Light Spectacular is organized by two local organizations – St. John Lutheran Church and The School of Ocala, and includes special visits from Santa Claus. Tickets cost between $20 and $30 per vehicle. Entry grants guests access to Santa Land on the weekends, as well as food trucks, train rides, games, crafts, and even ice skating.
Thanks for reading this edition of Floridian Today. To never miss an update, subscribe for free:
In the meantime, if you learned something or found this read interesting, please consider sharing it to grow our community!