Robin Boyle arrived in the Florida Keys two years ago, enthused about a 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 of life before retirement. Florida home mortgage costs being what they are, however, the couple couldn’t afford more than a trailer or an apartment.

In a state where growth is booming, and the population is even supposed to double by 2060 the Florida Keys are losing residents. Monroe County, which comprises the Florida Keys, has lost population every year between 2000 and 2005, dwindling by 4 percent to just 76,329 residents.

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 almost all 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 it doors forever. The islands are also losing workers vital to the economy, including health care workers and police officers.

What’s behind the population drop? It’s not that the carefree lifestyle of the Keys has lost its appeal, says Robbie Hopcraft, who owns a Florida mortgage company and has lived in Key West for 14 years. It’s that it’s simply too expensive for most Americans.

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 upon which build, and strict building codes have also 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. Local property taxes and Florida home insurance rates have skyrocketed since then, prompting many people to pack up and leave.

“What you see in Key West is a compressed kind of microcosm of problems that unfold over a longer period of time on the mainland,” Maureen Ogle, historian and author, says. “When the price of insurance goes up, it’s going to affect a place like Key West a lot faster and harder.”

Hopcraft describes the Florida home insurance spike in the Keys as a crisis.

His policy on his two-bedroom, 800-square-foot home has risen 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 said. “A lot of them are struggling.”

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.

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

While a drop in new building permits indicates a slowing Florida real estate market, the situation is better in Pasco County (map) than in other nearby counties, according to today’s St. Petersburg Times.

A chill in May’s housing market sent Pasco’s year-to-date building permit growth into retreat for the first time this year (compared with this point a year ago). As demand cools and speculative investors back away, area inventories are ballooning. In west Pasco, they’ve increased sixfold from this time in 2005. In east and central Pasco, inventories have doubled.

In what may be the tail end of the stare-down between sellers and buyers, a buyers’ market may be ready to bloom.

Despite a statewide slowdown in home construction, Pasco County issued 3,106 single-family home permits through June of this year, according to the U.S. Census and county figures. This time in ‘05, 3,138 permits were issued. As of April, Pasco’s bellwether indicator was still defying nationwide and state trends, standing at 613 permits in April, leading last year’s figure by 162 permits.

In May, however, just 505 permits were issued, a drop from 700 a year ago. That’s still a small dip compared with deeper drops in the Tampa housing market, but the chill confirms fears of a spillover from a national cool-down. And it’s showing signs of creeping north.

• In Pinellas County, year-to-date figures through May 2006 are lagging by 144 permits.
• In Hillsborough County, 824 fewer permits were issued this year, comparing to the same time periods.
• Hernando County gained of 188 permits through May 2006, from the same period last year, but April brought a slight slowdown, with 38 fewer than the same time last year.

The slowdown follows a trend of bulging housing inventory that began last fall across the state. In Pasco, inventory ballooned from 800 resale homes and condos this time last year to 4,900 currently, said Jennifer France, a past president of the West Pasco Board of Realtors.

She blamed higher Florida home loan rates, as well as insurance premiums that have reached $2,300 for a modest $100,000 home — high enough to prevent first-time buyers from qualifying under lenders’ standard mortgage ratios. In parts of Pasco, there are just a handful of buyers a month, and six months’ worth of inventory to boot.

The trend may take its toll not just among real estate investors, but also in an industry that’s been key to the county’s economy.

“All those who got into real estate because of the easy money, you’re going to see a lot of Realtors leaving the market,” said Gregory DeLaRue, of Keller Williams Realty and president-elect of the East Pasco Association of Realtors.

The chill in the sector has crept across the state, having been noticeable in Orlando and the South Florida housing market for some time.

“It shows the changing marketplace,” said Jack McCabe of McCabe Research Co. “Every market has seen a drop in sales and an increase in inventory. Pasco is one of those.”

In the Tampa-St. Petersburg-Clearwater area, the first quarter saw a 23 percent drop from 11,740 sales of existing homes in the same period last year to 9,087, according to Florida Association of Realtors numbers. Pasco is not as severe, although this may be just preliminary.

“Their time is coming just a few months down the line,” McCabe said.

Pasco sellers are throwing out concessions to lure buyers that range from $2,500 to $10,000 in value, though agents are advising sellers to pay buyers’ closing costs rather than underprice homes. In parts of South Florida, incentives already range from $10,000 to almost $30,000, with broker commissions between 5-7 percent to help sway buyers.

First-quarter new-home prices pushed upward to $313,000 from $300,000 at the end of last year. That’s a slower rate of growth than we’ve seen in the past few years, and prices may level off or slip yet.

“It’s always several months later that they go down,” McCabe said. “The sellers and buyers are in a stare-down process. Once we get the inventory absorbed, we’ll see appreciation again. It will be real value, not the kind of speculator value we’ve seen in the last five years.”

For now, a buyer’s market beckons. Get out there and find the right Florida mortgage loan financing and make it happen.

The Florida State Legislature is mulling proposal to remove the special “Area of Critical State Concern” designation for the Florida Keys — an idea the Tallahassee Democrat decries as devastating to the state’s most imperiled and environmentally fragile region. The newspaper’s editorial criticizes the move and says the consequences of turning the real estate market loose on the Keys would result in catastrophe.

The Critical Area designation was first applied 30 years ago to allow the state to ensure that the development rules and their enforcement protected the statewide interest and investment in the Keys. Its purpose was to have the state partner with the Keys’ local governments to remedy many critical problems related to infrastructure, water quality, habitat preservation, threats of extinction, evacuation capabilities and more.

Many feel that the program is more important now than ever.

While Florida has, for the most part, held up its end of the bargain over the years, county government has consistently dragged its feet. The risk is great because local governments have been largely unwilling to fund land acquisition and infrastructure needs, or to enforce — against local real estate interests — development standards based around the unique ecological needs of the Keys (much like Everglades National Park).

Current efforts to protect and restore the Keys include an annual limit on new development, extra-stringent wastewater and habitat protection rules, and an annual program designed to improve infrastructure and management of the scarce remaining land. These regulations exist because Florida insisted on them despite local objections. Scarily, these measures are absolutely necessary — and may not even be enough if the Keys are to be saved.

State studies show the three critical issues in the Keys have reached dangerous levels:

1. Water quality
2. Habitat loss & degradation
3. Evacuation capabilities

If action is not taken, non-reversible damage to the Keys’ ecology and economy are the likely results. Yet the implementation of the improvements, regulation changes and funding sources needed to address the situations lag years behind. Some Florida Keys real estate owners, developers and politicians in the Keys have sought removal of the Critical Area designation so that the state could not longer insist on higher levels of protection or challenge permits issued in violation of adopted rules.

This year, despite the fact that the state recommended that the Critical Area designation be maintained, a bill has been filed to legislatively remove the designation. The results of this passing would be devastating to the Keys, and to the hundreds of millions of dollars worth of investment that all Florida taxpayers have made in the area over the years in the form of sensitive land acquisition, water quality improvements, planning, etc.

The Florida environmental conservation movement would certainly take a huge hit if this measure were passed. It is just one of many instances of the state’s sensitive ecology and burgeoning real estate industry colliding, and the fallout is never pretty. What we need are more Florida real estate developers who make conservation a priority, and realize that preserving the environment is central to maintaining our heritage.

Real estate values soared last year in the Upper Keys, but have shown signs of slowing down in the past few months, according to the Florida Keys News online. While upscale redevelopment projects continued their strong growth, a new word, “condotel,” became part of the everyday Keys lexicon. In both Key Largo and Islamorada, officials continued to spar over housing issues in what was often a contenious calendar year.

The “condotel” phenomenon caught fire in the Upper Keys as many properties began to change hands, one after another. Hobo’s, Kelly’s on the Bay, America Outdoors Campground, The Pilot House, Bayside Resort, Holiday Isle; the list goes on and on. As with many other areas of South Florida real estate, investors converged on the Keys, paying big bucks for properties they plan on redeveloping into upscale hotel condominiums — hybrids in which rooms or suites are rented out like hotel rooms, but are privately owned by investors.

• Lindback’s La Siesta Resort in Islamorada, a venerable landmark, sold for $27 million, destined to be converted into a ritzy condotel.
• Meanwhile, Holiday Isle was under contract for nearly $100 million, and soon it too will become a condotel.

A new developer in the area, Cay Clubs International (run by Dave Clark of Tavernier) became a major player. Before the year ended, the company had acquired an entire block in Islamorada south of the Tavernier Creek Bridge, Mangrove Marina in Tavernier, Bayside Resort in Key Largo, the Pilot House (also in Key Largo) and two exclusive properties in Marathon. It plans to put floating townhome communities on many sites.

Some Marathon and Monroe County officials balked at the plans, however, calling the homes unsafe and saying they do not comply with building regulations.

As the condo conversion movement rages on and the number properties sold to big developers grows, officials in Islamorada and Monroe County are increasingly concerned about the loss of the Keys’ working waterfront. Monroe County placed a nine-month moratorium on marina redevelopment, while the issue took on an even more poignant significance in Islamorada. The village that bills itself the “fishing capital of the world” began to wonder if its charter fishing fleet is on the verge of being phased out.

In September, the Monroe County Tourist Development Council issued a report on the condo craze. The study found that more than 2,076 units — a startling figure for the tiny Keys — have been targeted for conversion to condominiums or condotels since the beginning of 2004. That number equates to 20 percent of the Keys’ total hotel, motel, recreational vehicle and campground spaces. In the Upper Keys, 75 percent of campground and RV units are being converted, mostly to residential condominiums.

Officials throughout Monroe County and the Upper Keys are also mullingthe ongoing crisis in affordable housing. Local governments have thus far failed to partner in the construction of a single affordable home. Driven by high fuel costs, continuing increases in property values and skyrocketing hazard insurance rates as a result of hurricanes, the cost of Upper Keys housing continued to rise at an alarming rate.

Not all was a loss on the affordable housing front in the Upper Keys, however. In August, the Monroe County Commission purchased a parcel of land on Tavernier’s Burton Drive with plans to build 32 residences. Habitat for Humanity constructed two units in 2005 in Key Largo and has seven more planned, while the 52-unit second phase of Key Largo’s Tradewinds Hammocks also is ready to proceed.

In Islamorada, progress also was limited to the planning phase. The village partnered with the Middle Keys Community Land Trust, which builds and manages affordable housing projects, to obtain four lots in Plantation Key Colony, upon which it seven residences will be built. Zoning changes were made to allow duplex construction in the village, and the board is looking to encourage builders along the Overseas Highway to mix businesses with affordable housing units.