Phoenix, America’s fastest-growing city for the third year in a row, covers 517 square miles in central Arizona.
City of Phoenix
A business-friendly environment, plentiful job opportunities and affordable cost of living have pushed Phoenix to the top of the list of the fastest-growing cities in the United States. Newly released Census data for city population growth shows that the South and West continue to have the fastest-growing cities in the United States. Phoenix was at the top of the list with an increase of 25,288 new residents.
Phoenix remains the fifth most-populous city in the nation with a population of 1,660,272. Rounding out the top five with the largest population increases were San Antonio (20,824); Fort Worth, Texas (19,552); Seattle (15,354); and Charlotte, North Carolina. (13,151).
Affordable housing, new business formations and job creations are luring Millennials to Phoenix, says Eric Jay Toll, communications manager for community and economic development for the City of Phoenix.
The Great Recession was a wake-up call for Phoenix. Service-sector jobs in hospitality, retail and construction were hit particularly hard. The downturn accelerated the growth of a strong technology-based market in the last decade that has revitalized the metro area’s economy. For example, bioscience and health care are big fields here. The workforce in bioscience increased by over 100,000 people from 2007, a near doubling of the workforce.
“We’ve been adding a lot of jobs in the advanced industries, manufacturing, business and financial services, technology, bio science and health care,” says Toll. “Those jobs tend to pay higher salaries, they are recession-resistant, and they now make up close to 60 percent of the metro area workforce. Before the recession in 2007, they only made up 48 percent of the Phoenix metro workforce.”
The promise of good jobs and good pay has attracted a diverse group of skilled professionals primarily 25 to 45 years old, many of whom are from other states or countries.
“The change in our workforce has made the market really attractive to people from outside the area,” says Toll. “Since the 2010 census, we’ve added around 680,000 new people to the population, and 385,000 of those came from outside the area, around the United States. And about another 180,000 came from foreign countries. The largest immigrant group into the Phoenix area has been from Asia, and Latin America is second. Technology and bio science jobs are drawing them in.”
The age demographics of Phoenix newcomers are primarily in the 25 to 45 age group. It’s the largest age group moving in based on 2017 data, says Toll.
Many entrepreneurs are creating businesses and helping revitalize the economy. Toll says the Kauffman Foundation has rated Phoenix as one of the top metro areas for start-ups and entrepreneurships for at least the last four years.
“There are number of fields that entrepreneurs are going into,” explains Toll. “We have a lot of bio-science startups. That’s because of an investment that Phoenix and our partners have made into what is called the Phoenix Biomedical Campus.”
One of Phoenix’s partners is the Translational Genomics Research Institute. TGen is a Phoenix-based non-profit organization dedicated to conducting groundbreaking research with life-changing results. It is affiliated with City of Hope, a world-renowned independent research and treatment center for cancer, diabetes and other life-threatening diseases.
Phoenix and its partners, the University of Arizona, Arizona State University and TGen have invested $500 million into developing the Phoenix Biomedical Campus.
“We have 10,000 science professionals who work in that area now, which is located in downtown campus,” says Toll. “We have commitments in the pipeline for development of new biomedical and primary healthcare facilities that have a value of $3.5 billion and will bring into play over 4.1 million square feet of facilities, and it’s over the next two years. To put that in perspective, when I say primary bioscience and health care, I’m talking about research facilities, educational facilities and hospitals. I’m not counting urgent-care clinics, medical office buildings or doctors offices.”
Toll says Phoenix benefits from reasonable taxes and a stable business environment. Downtown Phoenix is home to more than 300 technology companies in 2019 compared with 67 in 2012. Metro Phoenix also has benefited significantly from the growth in the financial services sector.
“In financial services, we’ve got American Express, including their technology center, Discover, USAA, Charles Schwab, Vanguard, Nationwide Financial, Allstate, Wells Fargo, Bank of America, Chase, PayPal, Paychex, Northern Trust Bank and Quicken Loans,” says Toll. “They all have huge offices, some with thousands of employees in each office.”
Vanguard uses its Scottsdale, Arizona facility as a mirror headquarters when weather conditions shut down their main headquarters in Valley Forge, Pennsylvania.
“A lot of companies are looking at Phoenix because we have no natural disasters, no earthquakes, no wildfires, no tornadoes,” explains Toll, jokingly adding, “We don’t have natural disasters unless you consider summer heat.”
Phoenix has more to offer beyond golf courses, including museums, city parks, hiking and mountain biking trails and performing arts venues.
“We get a big influx of people after a bad winter, and I think we’re seeing that this year,” says Toll.
Houston-based Medistar is readying Central Station for construction in late 2019. A 300-residential-unit multiple-use high rise will be a transit-oriented development in downtown Phoenix.
Medistar and Gould-Evans rendering
Phoenix is one of the few major metro areas where an average single wage, not household income, buys an average home. Compared with many other major U.S. cities, housing is relatively affordable in the Phoenix metro area, which is luring a growing number of new residents, especially Californians. Demand for apartments, however, is outpacing supply, which is pushing up rental prices.
“We’re starting to get significant high-rise developments in Phoenix with multiple-use retail on the ground floor,” says Toll. “Last summer, at one point we had more cranes over downtown Phoenix than they did in downtown Los Angeles. We have eight more high-rise buildings that will be breaking ground in downtown Phoenix before the end of this year. That will bring the total to 19 multifamily developments that have been built or under construction in a 24-month window. During the recession, we didn’t have any multifamily development. We went almost 10 years without any new major apartment buildings. So there’s big demand. When these new developments open up downtown, they are beating their occupancy projections.”
Phoenix is also seeing strong growth in residential infill development. “Parcels of land that have been undeveloped for decades are now starting to come out of the ground,” says Toll.