Downturn may slow predicted 'Sun Corridor' boom

2011-10-10T00:00:00Z 2014-07-15T17:52:04Z Downturn may slow predicted 'Sun Corridor' boomTony Davis Arizona Daily Star Arizona Daily Star
October 10, 2011 12:00 am  • 

With a "lost decade" hanging over the region's economy, the "Sun Corridor" from Prescott to Tucson will grow more slowly and draw at least 900,000 fewer people than originally forecast, experts say.

When the Sun Corridor idea first surfaced in 2006, planners predicted that what's known as a "megapolitan" area of 10 million people would exist there by 2040. The Sun Corridor is to be one of 10 megapolitan areas in the country.

Now, prominent University of Arizona economist Marshall Vest predicts that 8.5 million people will live in a slightly scaled back Sun Corridor consisting of Pima, Pinal and Maricopa counties by 2040. Robert Lang, a sociology professor at the University of Nevada-Las Vegas who helped coin the term Sun Corridor and offered the original 10 million prediction, now says those three counties, plus Yavapai County, will have 9.1 million people by 2040.

These reductions may seem like small potatoes for a region that now tops out at about 5.7 million people. Lang and Vest agreed that 9 million or 8.5 million people won't seem that much different than 10 million when it comes to growth-related problems and issues such as traffic congestion, school overcrowding, water and open space.

"Either way, it's more people than you have now," Lang said. "The state will be going from sort of a Maryland-sized state to sort of an Ohio-sized state. The question will be: Are you super big or just very big. Either way, you'll have very serious projected growth, one that the region has to address differently or suffer in the quality of life."

Vest, however, predicts that even the smaller population forecast will be a long time materializing because the hangover from the 2008 financial crisis and the subsequent recession have been so severe. Such economic indicators as building permits and nonfarm employment are not expected to return to normal levels until 2015 or 2016.

"The financial crisis that we're still working our way through could take a decade, if history is any guide," said Vest, director of the Economic and Business Research Center at UA's Eller College of Management. "Banks still aren't lending in this country, and Europe is now suffering a banking and sovereign debt crisis. Housing prices are still falling in the U.S.

"Confidence remains at recession lows, and there is little confidence in our political leaders' ability to make things better. In Arizona, population is not growing, and there are enough vacant houses to accommodate an entire decade of normal growth."

The number of single-family homebuilding permits statewide peaked in 2005 at about 91,000 - a number Vest said he doesn't expect to ever be exceeded. When the recession started in 2007, building permits had sunk to 48,000, and his forecasts call for 45,000 permits in 2014, 57,000 in 2015 and a more normal level of 61,000 in each of the following three years, he said.

Nonfarm employment statewide peaked at 2.68 million back in 2007 and was down by 11.7 percent to 2.366 million by the third quarter of 2010. The center's forecast shows that the peak job figure won't return until the third quarter of 2015, he said.

Lang was a bit more optimistic, saying that while the region could endure a "lost decade," it may be more like a lost half-decade if now-depressed housing prices in Tucson and Phoenix begin to make the region seem like a bargain to people living elsewhere.

"Phoenix boomed and busted, but that left the region a real bargain compared to Southern California," said Lang, who was director of the Metropolitan Institute at Virginia Tech University when he first wrote about the Sun Corridor.

"Southern Californians can't sell their house, so they are stranded for the moment. When they do sell, it's going for more than our housing in Tucson, Phoenix and Las Vegas.

"So when the economy is improved, assuming there is a pent-up demand, there would be some really good years of catchup" in Phoenix and Tucson, he said.

Even if construction doesn't come back to normal until 2015, this region could draw a lot of out-of-state migrants from people buying into the area's huge vacant housing stock, he said.

"A recovery for people building real estate is different from people seeking a bargain," said Lang, who is due to release a book on the Sun Corridor and nine other megapolitan regions in the country in November.

The region has been through down cycles before, such as the savings-and- loan crisis that killed the housing market from the late 1980s to about 1992 or 1993, he recalled.

"It looked pretty grim back then, but we came back. I think this is deeper, but we can also see the seeds of recovery," he said. "It's just that at the moment it hasn't benefited the region much."

By the numbers

About 5.7 million

Current Arizona Sun Corridor population

5,773,752

Maryland 2010 population

8.5 to 9.1 million

Predicted Arizona Sun Corridor 2040 population

11,536,504

Ohio 2010 population

Sources: U.S. Census, University of Arizona professor Marshall Vest and University of Nevada-Las Vegas professor Robert Lang.

A megapolitan area

• Combines at least two existing metropolitan areas.

• Will total more than 10 million residents by 2040.

• Constitutes an organic cultural region with a distinct history and identity.

• Occupies a roughly similar physical environment.

• Links large centers through major transportation infrastructure.

• Forms a functional urban network via goods and service flows.

• Creates a usable geography that is suitable for large-scale regional planning.

Source: "America's Megapolitan Areas," by Robert Lang and Dawn Dhavale, published by the Lincoln Institute of Land Policy in 2005.

Contact reporter Tony Davis at tdavis@azstarnet.com or 806-7746.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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