Careful, East Valley. With apologies to Marty McFly, that forming line many think is leading to recovery instead is into an economic time machine that’s once again taking us back to the future.
It’s the same machine Arizonans have eagerly returned to after every economic downturn in recent memory: Set the controls to postwar Arizona, say (sorry, again, Marty), 1955, and — poof! — our old friends from Hallcraft, Allied, Suggs, John F. Long and the other great homebuilders of mid-century are there to greet us.
They built affordable, decent-quality homes, many of which are still standing and in darned good shape, to accommodate the head-to-the-Sun Belt growth boom that was the major support beneath Arizona’s economy for the remainder of the 20th century and into the 21st.
And whenever that economy went sour, community leaders vowed to diversify it as it rebounded so that when the next recession struck, the increased variety of financial infusion would have lessened that crisis’ severity, perhaps even its longevity.
But no sooner did the sun shine on us once more, back into the time machine we went. We had several other industries, but the old standby of growth always came through before. It’ll do it again, right?
Just as in former days, the indicators are once again showing growth as a ticket out of the economic pits, but this time it might be taking a different form.
Morgan Brennan of Forbes magazine reported in January that Phoenix’s position as the 8th fastest-growing American city was not expected by the magazine’s staff as it compiled its list of the top 20 of 2012.
“Hard hit by the bursting of the housing bubble, the desert metropolis is welcoming a fresh influx of newcomers, particularly from California and the Midwest,” Brennan wrote, predicting that Phoenix’s population would increase by 2.7 percent this year, the fourth-highest rate on that list.
Brennan quoted an expert, Lee McPheters of Arizona State University’s JPMorgan Chase Economic Outlook Center, as saying that the number of jobs here is increasing in the health care, warehousing, construction and service industries.
Sounds terrific, right? But here’s McPheters quoted by Brennan: “Interestingly, it’s younger people, ages 20-29, coming in now who don’t have a house to sell, are unmarried, that are the driver of growth here now,” he told her.
Young arrivals are a vital component to growth, but with no house to put on the market back home, it’s not quite clear whether they want a house to buy here.
What we have been learning about the next generation of families is that the Great Recession has taught many of them that a 30-year mortgage might not be the most desirable thing, both from a financial standpoint and from the outlook of a quick pivot to a new community to take advantage of.
Experts such as Toronto economist and futurist Richard Florida believe that such a situation could mean a potential rise in urban rentals as opposed to suburban purchases. This is certainly not a bad thing here in the Valley, but it would lack the same horsepower to ignite the rest of the economy that large-scale home sales always had.
Many of these new arrivals could be members of the “creative class” written about famously by Florida in his newly revised book, “The Rise of the Creative Class,” first published in 2002.
In an article published in The Atlantic last June, Florida talks about the criticism of his views when they first were published more than a decade ago:
“My ideas that the talented were beginning to favor cities over suburbs, that urban centers were challenging suburban industrial park nerdistans as locations for high-tech industry, that older cities were starting to regain some of the ground they’d lost to Sun Belt boomtowns, were widely derided when I first began to write about them,” Florida wrote. “Ten years later, they are taken for granted.”
Now, the suburbs aren’t exactly dormant.
This past week the Tribune’s Daniel Quigley reported that East Valley home prices are rising, from an average of $120,000 in November 2011 to $162,500 in November 2012. Quigley quoted another ASU expert, Mike Orr of the Center for Real Estate Theory and Practice, as saying he worries about the availability of homes as new ones aren’t being built fast enough.
So the siren song begins again. Come to Arizona and build homes. Come to Arizona and the sunshine in the gorgeous Sonoran desert. Live the resort lifestyle. These slogans sound virtually the same as they did in 1955, 1975 and 1995.
This is not to wish ill upon the home construction or real estate industries. They aren’t going away and will always play a major role in Arizona’s economic structure.
But our community leaders, financial experts, residents, must at long last listen to the experts, see the changes in the attitudes of the young, and step away from the time machine, because the past is no longer there to greet us.
We must plan a real future based on different economic pillars in addition to the proliferation of rooftops. New Arizonans should be always welcome. But we have to make sure they have jobs. Powerful as it is, the housing market has let Arizona down once too often for it to stand alone again.
Read Tribune contributing columnist Mark J. Scarp’s opinions here on Sundays. He can be reached at mscarp1@cox.net
Read Mark J. Scarp’s opinions here on Sundays. Watch his video commentaries at eastvalleytribune.com. Reach him at mscarp1@cox.net.
Cerulean posted at 10:25 am on Sun, Feb 3, 2013.
I agree [thumbup]
Leon Ceniceros posted at 10:32 am on Sun, Feb 3, 2013.
Mark,
Sadly, even though you speak the Truth. Our City Governments are dictated to if not lead by (Mesa for one)....the Construction Industry.
Apartments are a.....NO-NO.
Single family houses that no one can afford to even put a down-payment (20%) on are given the "Green Light".
Do these ex-Home Building Politicians even consider the huge population of Senior Citizens that don't want the responsibility or upkeep of a home. There are millions out there that don't want to move to a "sauna-humid" Florida but like the dry heat of Arizona.
Sadly, Mike, the answer is ....N.O.
The Mesa City Council barely was able to scrap up a majority to approve a Senior Citizen Apartment Complex in Downtown Mesa. It was relegated to a back street at that. Seniors don't want to live in a "crackerbox" trailor home either. They just want a small one-bedroom apartment that offers safety, affordability and companionship.
sockratties posted at 1:45 pm on Sun, Feb 3, 2013.
Mesa city planners have conflicting views of growth. On one hand they keep trying to make the "Fiesta" district viable (with taxpayers money and little contribution from developers) and push development of downtown main street (that can't compete with a covered free parking mall). On the other hand there is a mind-set of Mesa being a bedroom community serving Phoenix. Gilbert, Scottsdale and Chandler have managed to become their own cities with active city centers, fairgrounds, and downtown attractions. Glendale seems to have gone overboard and is in trouble.
I have seen Mesa development leap ahead after the installation of all those taxpayer bought street signs that tell everyone that the deserted malls behind the chainlink fences are in the new fantasy land of the Fiesta District with yet to be paid for street improvements (like taking away lanes of Southern Avenue) trees, walkways (to enjoy the 115 degree weather, and bus stops (because the light rail will run along Main Street in deserted downtown Mesa.
Rich posted at 9:28 pm on Sun, Feb 3, 2013.
Arizona is the land of boom and bust. Cotton, Cattle, Copper and Consumption, all that's left of that is Sun City. And that is what's really cool about it. After your Construction, what's the next "C" Mark? Hope I'm not too old to find that out.
Arizona Willie posted at 9:03 am on Mon, Feb 4, 2013.
socratties: the Light Rail has brought redevelopment to the blighted areas it runs through.
The biggest mistake they are making with Light Rail is they are only piddling around and building a mile or two at a time.
In the long run this drives up the costs as inflation increases prices.
There should be one massive project to extend the Light Rail all the way to Apache Junction, if not past the Superstitions where there are plans for homes for another 1,000,000 people.
Yes, it would be expensive, but it would cost far less to do it in one project than it will to do it in 30 projects over the next 60 years.
Nickle and diming things NEVER pays off.
KeithE4 posted at 12:33 pm on Mon, Feb 4, 2013.
Rich said: "Arizona is the land of boom and bust. Cotton, Cattle, Copper and Consumption, all that's left of that is Sun City. And that is what's really cool about it. After your Construction, what's the next "C" Mark? Hope I'm not too old to find that out."
The next "C" is already here. It's "Corruption."
Bingo6 posted at 1:10 pm on Mon, Feb 4, 2013.
What's cool about these unincorporated islands of the living dead ( retirement communities ) in a word nothing. It's high time that we eliminate all age based discrimination in these zombie lands and open them up to the living wage earners who have the desire to invest in a real viable future in this state.
Retirement communities are a vast wasteland with no future returns.
Rich posted at 7:42 pm on Mon, Feb 4, 2013.
Keith, that "C" followed the deaths of our founders, “Every revolution evaporates and leaves behind only the slime of a new bureaucracy.” - Kafka. If America is to survive, it has to trivialize government and handle it themselves. We did it well for a while, not so much lately.
sockratties posted at 11:06 am on Tue, Feb 5, 2013.
Individuals choose to live where the environment best fits their life style. While a person who works and plays in the city may prefer to live in Downtown Phoenix, families with children may opt for a suburban home with yard and nearby schools. Some who are retired prefer to live where transportation, health, recreation and shopping are tailored to their needs. As our population ages, which is statistically imminent, the number of people who are living longer will become an even greater percentage of the overall population. It makes sense that communities that cater to these preferences should develop. Retirement communities pay their own way and then some. Everyone lives somewhere. It makes sense that people with common interests and needs would form communities that meet their requirements. Those who would disparage such communities deny their own future.
sockratties posted at 11:09 am on Tue, Feb 5, 2013.
AZWillie... where is the water for a million more homes going to come from? The water table in this valley has dropped over 40 feet in the last 3 decades. Soon the water bill will exceed the mortgage.
Leon Ceniceros posted at 2:27 pm on Wed, Feb 6, 2013.
Most of the "jobs" today do not pay a sufficient salary that would support a family. much less a house payment.
Apartments are what is needed.in Today's Job Market. Nice one and two bedroom apartments like the ones that were built 15 years ago in the Power Road & Baseline area and to the South and East.
The ex-Home Builders and "nodding heads" in City Hall should start thinking "out of the box" and approve apartment building in East Mesa. No one in their right mind wants to live in the Fiesta Mall "ghetto" area with the gang-bangers and slum-dwellers.