High price of paradise in Florida Keys

Robin Boyle arrived in the Florida Keys two years ago, enthused about her new job and new life in paradise. Now she's moving to Michigan.

She imagined that she and her husband, who lived in Key West in the 1960s, would enjoy a slower pace before retirement. But the couple couldn't afford anything more than a trailer or apartment. When her husband's medical emergency required a two-hour helicopter ride to a Miami Beach hospital, she knew it was time to go.

"We thought we would love it," says Ms. Boyle, who is giving up her job as managing editor of the Marathon/Big Pine Free Press in Marathon, Fla., for the same job at a newspaper in Hillsdale, Mich. "We just can't afford to live here, but that is happening everywhere. Even doctors can't afford to live here. The whole middle class is leaving," she says in a phone interview.

In a state where growth is booming, the Florida Keys are losing residents. Monroe County, which comprises the Florida Keys, lost population every year between 2000 and 2005, dwindling by 4 percent to 76,329 residents, according to the US Census Bureau.

By contrast, up near Jacksonville, Flagler County was the nation's fastest-growing county during the same period, its population surging by 53 percent to 76,410 residents. Across the state, the increase has driven up land values and lured new businesses.

But in this tropical paradise, the traffic is thinner than in the rest of the state, and at least one elementary school in Key West is expected to close. The islands are also short of workers vital to the economy, including nurses and police officers, says Sonny McCoy, the county mayor, in a phone interview.

It's not that the carefree flip-flop and bicycle lifestyle of the Keys has lost its appeal, says Robbie Hopcraft, who owns a mortgage brokerage firm and has lived in Key West for 14 years. It's that it's too expensive for most Americans, he says.

The population decline in the Keys is the result in part of geography and growth management. A string of islands offers only so much land to build on. And to curb environmental damage and overcommercialism, and protect residents from hurricane property damage, the state and local governments have imposed strict building codes that have driven up the price of housing. But more worrisome to many residents is an upswing in hurricane activity that battered Florida in 2004 and 2005. Property insurance rates have skyrocketed since then, prompting many to pack up and leave.

The issues the Keys face could hint at what's to come in other coastal areas grappling with hurricanes and escalating property insurance costs, says Maureen Ogle, historian and author of "Key West: History of an Island of Dreams." She points to the 1920s, when the economy in the Keys was dragging long before the 1929 stock-market crash.

"What you see in Key West is a very compressed kind of microcosm of problems that unfold over a longer period of time on a bigger scale on the mainland," she says. "When the price of insurance goes up, it's going to affect a place like Key West a lot faster and harder" because its economy is so dependent on tourism. The Keys draw 3.6 million tourists and generate $2.2 billion a year, according to the Monroe County Tourist Development Council.

Mr. Hopcraft describes the high property insurance in the Keys as a crisis. His policy on his two-bedroom, 800-square-foot home has climbed to $8,000 a year. A year ago, he joined with other residents to establish a grass-roots lobby organization, Fair Insurance Rates in Monroe or FIRM.

"Most of the people here are working people. They have dive shops and charter fishing boats and lobster fishing boats, or they own their own restaurant or business," he says in a phone interview. "A lot of them are struggling."

Residents may soon receive some help. A new state law, which takes effect Jun. 1, is designed to reduce rates by putting more of the risk on the state and making more state backup insurance available to private insurers.

Yet many who work in the Keys can't afford to live there. In a county where home prices begin at $500,000, developers are replacing trailer parks and locally owned motels with high-end condos and hotels. Bob Dean, who owns a funeral-service company and has lived in the Keys for 55 years, subsidizes rents for four of his 19 employees in Key West, where rents range from $1,200 to $2,000 a month. Many other workers across the Keys are bused several hours a day from Miami.

To create more nearby affordable housing options, Monroe County leaders plan to offer county-sponsored housing for teachers, police officers, firefighters, and other workers, says Mr. McCoy.

McCoy, who was born and raised in the Keys, describes the population decline as a natural transition. "We're not too interested in a large population to begin with," he says. "It's a unique area, and that's what makes it so attractive and what makes it so important that all those restrictions are there.... We don't want to overcommercialize the islands because they're beautiful, and we want to preserve them for generations to come."