Phoenix Population Shifts Impact on Local Economic Growth

New Research Examines Impact of Population Shifts on Future Economic Growth

PHOENIX  – Despite speculation to the contrary, the population of metropolitan Phoenix appears to have remained unchanged or has dropped only slightly since 2007, meaning the area could be better positioned for recovery than has been widely perceived, according to new research from the Urban Land Institute’s (ULI) Center for Balanced Development in the West.

The implications of population shifts in the area, in terms of future housing needs, job growth, and economic viability, were examined today during a forum, “Real Demographics: Positioning for a Recovery in Today’s Arizona,” hosted by the ULI Center for the West and ULI Arizona. ULI is a global non-profit research and education institute dedicated to responsible land use; its Center for Balanced Development in the West focuses on improving urban growth patterns throughout the Western U.S.; and ULI Arizona serves the Institute’s members in that state.

The event centered around the release of Influx/Outflux: Metropolitan Phoenix, new research that evaluates the degree to which the population of Phoenix has fluctuated since the beginning of the recession in 2007. The report notes that while the state government’s 2007 population estimate of 4.2 million is probably high, the level it actually reached – it was measured at 3.9 million in 2005 — has likely not changed much, despite the housing market collapse, high number of foreclosures and precipitous job losses over the past two years. (The actual population total will not be known until the 2010 U.S. Census statistics are released.) The report was prepared to help guide plans for the area’s economic recovery and future growth.

Influx/Outflux suggests that a rebound in Phoenix will be reliant “not on an immediate resumption of rapid population growth, but on creating opportunities for those who have remained in the area,” said ULI Chief Executive Officer Patrick Phillips. “While another wave of real estate development is certain to come, a renewed emphasis on sustainable economic development would soften the sharp ups and downs in the real estate cycle and support ongoing population growth into the future.”

The report emphasizes the significance of pinpointing even small variations, either up or down: “Important decisions must be made during the coming year — in both the public and private sectors — that will depend on knowing how the population has changed. The difference between positive 1 percent and negative 1 percent population growth could translate into perhaps $1.5 billion in gained, or lost, income and sales tax revenues – and billions more in revenues for private enterprises,” Influx/Outflux report says. “In terms of land use, it could mean the difference between new housing demand on the order of perhaps 15,000 units or, alternatively, a 1 percent rise in total housing vacancy. The region’s decision makers cannot wait for data from Census 2010 to be released if they are to lay plans in anticipation of an economic recovery.”

The report is based on a review of three types of population data: population counts (an actual tally or survey); population estimates (statistical models including some types of U.S. Census Bureau information); and population indicators (including employment, births, deaths, undocumented immigrants, school enrollment, utility customers, and available housing and household size.)

Of these three main measurements, the population indicators offer perhaps the most up-to-date look at how the population is changing, the report explains. “They stand in contrast to population estimates that show steady and positive growth, as well as news reports that suggest significant population losses. Rather, these indicators show that the size of the region’s total population has probably remained unchanged from 2007 through the present.”

Among the indicators suggesting that the population has leveled:

• Employment – The jobs/population ratio at end of 2008 was 0.44, the lowest in 15 years. However, two-income families who have lost only one income are more apt to stay in the area and get by on one income than relocate.
• Births – Live births declined by 4.8 percent annually since 2007, but the birthrate is down nationwide as people adjust their plans because of the recession.
• School enrollment – Growth in student enrollment dropped to almost zero during the last two years.
• Utility customers – Virtually no growth in customer accounts has occurred since mid-2009, but no significant account cancellations have been recorded.
• Available housing/household size – While housing vacancies have risen due to economic hardship, so has the number of households “doubling up” and expanding to accommodate family members who have lost their homes.

If the 2010 Census data supports the contention that the population of metro Phoenix has leveled off, the area must adapt to a new growth dynamic vastly different from the 3 to 5 percent annual growth rate it experienced during much of the past four decades, Influx/Outflux says. “It will take sustained growth in the region’s base economy to reignite population growth, since there are already many more workers in the region that must be absorbed before the employment base can support new residents,” it states. “This means taking steps to create a regional economy where a greater share of business activity is dedicated to building wealth by producing goods and services that are globally competitive.”

The Influx/Outflux report was the result of ULI’s Influx/Outflux Initiative, a series of meetings hosted by ULI’s Center for Balanced Development in the West and ULI Arizona to convene a wide range of key data producers and analysts, including utilities, health statisticians, developers and educational institutions, to examine demographic trends in the region. All contributed data that collectively produced a composite measurement of change. The program is an example of coordinating ULI resources to create positive impact for land use decision makers in Arizona.

The complete report is available at www.uli.org/centerwest and arizona.uli.org.

Published on behalf of Urban Land Institute
The Urban Land Institute (www.uli.org) is a global nonprofit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the Institute has nearly 34,000 members representing all aspects of land use and development disciplines.

The mission of the ULI Center for Balanced Development in the West is to advance the work of ULI by providing responsible leadership in ensuring more sustainable urban growth patterns throughout the West. ULI Arizona began in 1984 as a means to expand ULI membership resources needed to support the Institute’s program of work in Arizona.

Technorati Tags: Arizona, economy, Phoenix, Urban Land Institute