the new economy: preparing utah for the future · the new economy: preparing utah for the future....

The New Economy:Preparing Utah for the FutureUtah Intergovernmental Roundtable

Annual Summit

Arthur C. (Christian “Chris”) Nelson, Ph.D., FAICPPresidential Professor & Director

Metropolitan Research CenterUniversity of UtahNovember 4, 2009

America Grows200 million in 1968300 million in 2006400 million in 2034500 million in 2050

America adds 100 million people faster than any other nation except India and

Pakistan – But faster than China.

Source: Arthur C. Nelson, Presidential Professor & Director of Metropolitan Research, University of Utah.

Utah Poised for Rebound in 2009

Source: Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah.

Recovering from the Great Recession

National real estate median list prices as of September 2009 appear to have hit bottom at 78% of April 2007 price

More markets are recovering value; 10% fewer cities are experiencing decline

Nationally, inventories are stabilizing; reduced amount of new net inventory entering markets

Nationally, foreclosures, bankruptcies, pre-foreclosures, tax liens, sheriff’s sales still represent 47% of “for sale” inventory

[Center for Policy Research, Rutgers University (2009)]

Recovering from the Great Recession

1985–2003: Average 4% annual increase in prices2003–2005: 7–15% increase2007–2009: 0–10% decrease (from 2005 High)2010: Back at 4% increase

No significant real estate investment since January 2007; beginning to see comeback nationally

California experiencing a turnaroundFlorida continues to experience difficulty (foreclosures,

bankruptcies, other distressed — 76% of “for sale” inventory)


Housing Trends (Nationally) —Shorter TermHousing Starts Multifamily as a Share of Single-Family (%)

2.0M1.8M1.3M0.9M0.5M0.6M

Single-Family Sales1.3M

1.05M0.77M0.48M0.38M0.54M

200520062007200820092010

200520062007200820092010

17.018.623.031.523.616.6

Existing Home Sales6.2M5.7M4.9M4.3M4.3M5.1M

Housing Trends (Nationally) —Longer TermHousing Starts Multifamily as a Share of Single-Family (%)

1.0M

1.8M

2009–2012 = 4.0 million

2013–2017 = 9.0 million

16.5

20.0


Housing Unit Trends(Region/States)

2008-2040 Growth of Housing Units2008 2040 # % Change

United States 130.0M 186.4M 56.4M 43.4%

Northeast 23.6M 29.2M 5.6M 23.7%

Midwest 30.3M 39.3M 9.0M 29.7%

South 47.5M 72.7M 25.2M 53.0%

West 28.6M 45.2M 16.6M 58.0%

TOP 3 States (# Change) TOP 3 States (% Change)

Name Number % Name Number %

California 6.9M 49.2% Nevada 996K 98.0%

Florida 5.6M 70.5% Utah 819K 92.6%

Texas 5.6M 60.6% Arizona 2.1M 87.4%

— 50% OF HOUSING UNIT GROWTH IN SIX STATES —[Center for Policy Research, Rutgers University (2009)]

Employment Trends(Private-Sector Employment)

2008-2040 Growth of Private-Sector Employment2008 2040 # % Change

United States 114.6M 197.8M 83.2M 72.6%

Northeast 21.0M 34.2M 13.2M 63.0%

Midwest 26.7M 45.1M 18.4M 68.8%

South 40.6M 71.5M 30.9M 76.2%

West 26.3M 46.9M 20.7M 78.6%

TOP 3 States (# Change) TOP 3 States (% Change)Name Number % Name Number %

California 9.1M 67.2% Nevada 1.3M 138.8%Texas 7.5M 87.8% Utah 1.1M 115.3%Florida 5.9M 94.0% Arizona 2.4M 115.0%

— 33% OF PRIVATE-SECTOR EMPLOYMENT GROWTH IN SIX STATES —


2040

20402010

332 billionsquare feet





Source: Data from Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah. Image from Architect magazine, premier issue, November 2006.

Population Growth 2005-2040

Area 2005 2040 Change PercentWasatch 2.2M 4.2M 2.0M 90%Utah 2.6M 5.2M 2.6M 100%

Source: Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah. Numbers may not add or calculate due to rounding. Figures adapted from 2008 Economic Report to the Governor, Governor’s Office of Planning and Budget.

Residential Units 2005-2040

Area 2005 Growth Replaced Total %’05Wasatch 650k 720k 140k 840k 130%Utah 920k 920k 180k 1.1M 120%

Source: Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah. Numbers may not add or calculate due to rounding. Figures based on residential units per capita 2000 adjusted for declining household size, plus loss factor based on census analysis.

Employment Growth 2005-2040

Area 2005 2040 Change PercentWasatch 1.3M 2.5M 1.2M 90%Utah 1.5M 2.9M 1.4M 90%

Source: Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah. Numbers may not add or calculate due to rounding. Employment includes full- and part-time jobs as defined by BEA.

Nonresidential Space 2005-2040

Area 2005 Growth Rebuilt Total %’05Wasatch 600M 600M 1.0B 1.6B 270%Utah 700M 800M 1.1B 1.9B 270%

Source: Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah. Numbers may not add or calculate due to rounding.

Bottom Line Construction2005-2040

Residential $350 billionNonresidential $250 billionInfrastructure $100 billionTotal $700 billion


How Does It Grow?

Households are ChangingHousehold Type 1960 2000 2040US

HH with Children 48% 33% 26%HH without Children 52% 67% 74%Single/Other HH 13% 29% 34%

_________________________________________ UtahHH with Children 47% 38%HH without Children 53% 62%Single/Other HH 18% 22%


People Turning 65 Each Year[Figures in 000s]

Source: US Census Bureau – 65+ in the United States: 2005; Wan He, Manisha Sengupta, Victoria A. Velkoff, & Kimberly A DeBarros. December 2005.

1000

1500

2000

2500

3000

3500

4000

4500

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

Share of Growth 2000-2040US HH Type ShareWith children 14%Without children 86%

Single/Other 30%UtahWith children 25%Without children 75%

Single/Other 25%Source: Arthur C. Nelson, Presidential Professor & Director, Metropolitan Research Center, University of Utah.

“New Urbanity” Preferences

Source: National Association of Realtors, American Preference Survey 2004.

New Housing Market RealitiesSub-prime mortgages are historyAlt-A mortgages no moreFHA-like conventional mortgages king“Jumbo” loans expensive and difficultDemand for $1million+ homes has tankedMeaning

Smaller homesSmaller lotsMore renters

Shifting Tenure

Tenure 2006 2030 Change ShareOwner 480k 650k 170k 51%Renter 200k 360k 160k 49%Total 680k 1.0M 330k

2008-2020 = 2/3rds Renter Demand


Importance of Community Attributes

1. Housing type (23-26%)2. Neighborhood age/life stage mix

(20-24%)3. Public transportation options

(12-14%)4. Type of community (12-15%)5. Size of yard (11-12%)6. Open space (9-11%)7. Architectural design (5-6%)

Source: Adapted from Harris Interactive for Envision Utah

1

2

3

4

5

6

71/2 to 2/3 (55-65%)

Preferred Community Attributes

Housing type: Mix of single family homes & town homes

Neighborhood age/life stage mix: Mix of ages & stages

Public transportation options: Bus, Rail, TRAX

Type of community: VillageLot size: Variety of lot sizesOpen space: Active & passiveArchitecture: Distinctive

Preferred Combination

of 75% of Utahns

Source: Envision Utah based on Harris Interactive

Core Values = Urbanity

Well-Designed Communities and Core Areas= Density, mixed uses, renewability

Effective Transportation Systems= Density, accessibility, connectivity

Employment and Economy= Density, accessibility, connectivity

Sense of Community= Walkability, life-stage options, connectivity

Sustainability & ResilienceMinimums to be taken seriously:

10,000+ people per square mile.4,000+ occupied residential units per sq. mile.Average of 6,000 jobs per square mile with

centers 3-times this surrounded by areas 1/3rd this – walking, biking, Segway distance

400,000 square feet of retail + service space per square mile but with centers of 2-times this surrounded by areas of 1/2 this.

Not This

Day Break = 11,000 people per square mile.

Orenco Station =15,000 per sq.mi

The Opportunity

The New Promised Land?

Tear Up a Parking Lot,Rebuild Paradise

Large, flat and well drainedSingle, profit-motivated ownership

Major infrastructure in place4+ lane highway frontage “transit-ready”

Committed to commercial/mixed useCan turn NIMBYs into YIMBYs

Slide title phrase adapted from Joni Mitchell, Big Yellow Taxi, refrain: “Pave over paradise, put up a parking lot.”

Corridor Opportunities

Station Area

Opportunities

http://www.cnu.org/sites/www.cnu.org/files/R0012614.jpg

The FutureState Street

Wasatch New MetropolisDemand 2005-2040

1,310k total HH in 2040 up from 685k in 2005x 33% = 440k New Metropolis demand in 2040- 40k New Metropolis supply in 2010

= 400k net New Metropolis need625k HH growth 2005-2040

60%+ all new housing units must be in new metropolis options to meet demand of the 1/3 of HHs who want those options.

Top Planning Programs

THANK YOU

the new economy: preparing utah for the future · the new economy: preparing utah for the future....

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