Scarp: Step away from the time machine, Arizona - East Valley Tribune: Columnists

Scarp: Step away from the time machine, Arizona

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Mark J. Scarp is a contributing columnist for the Tribune. Reach him at mscarp1@cox.net.

Posted: Sunday, February 3, 2013 8:04 am | Updated: 4:24 pm, Mon Mar 11, 2013.

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

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