US Southwest Population Booms

Texas and California are losing jobs, as tax incentives and an expected higher quality of life lure workers to Arizona, Utah, New Mexico, Nevada, and Colorado. MAGNET REGION

JUST over a mountain from the sprawling capital city here, hundreds of red-topped houses glisten in clear, desert air. Phoenix's largest suburb - Ahwatukee - has sprung up seemingly overnight from what was just red dust and foothills only four years ago.

Two hours north, in the once uncongested Sedona/Oak Creek Canyon area, a traffic jam occurs at the corner of routes 89A and 17. Video stores and pizza parlors populate sprawling malls where majestic red-rock formations once cast shadows across shanties and cactuses. In Taos and Santa Fe in neighboring New Mexico, so-called "satellite cities" move toward completion. The proliferation of high-priced, gated communities reflect demand from a new generation of affluent buyers outside the second-poorest state.

Despite national recession, a real estate collapse, and the savings and loan crisis that saw dozens of local banks fail since 1989, the United States Southwest is taking on new residents at a terrific rate. The postwar population shift to the Sunbelt has slowed recently, but is still going strong.

During the 1980s, California, Arizona, Nevada, Utah, New Mexico, and Colorado took in nearly half the country's new residents and expanded at three times the national rate of 9.8 percent. Population grows rapidly

Though a tax-law change in 1986 dried up venture capital, and the savings and loan scandal slowed home building to a crawl, the numbers have continued to rise at twice the national rate since 1990. Drawn by open spaces, sunny skies, and the prospect of new jobs and a new life without conventional restraints, the area's latest influx will help the Southwest lead the US out of recession, observers say.

"Arizona, New Mexico, Nevada, and Utah will lead the West," says Phil Burgess, president of the Denver-based Center for the New West.

It is not clear whether population sparks job creation or jobs draw population, but there is some agreement that each is a catalyst for the other. Monied retirees who have been elbowing into retirement communities, for instance, bring demand for restaurants, retail and food stores, and health-care options. Less well-off immigrants from Mexico fill rather than create such jobs.

"Population increases in the Southwest have been the most outstanding demographic trend of the past 41 years," says Andy Grose, president of a demographic tracking firm, Westrends. "And it is expected to stay that way at least until the year 2000."

A Denver symposium of top Western economists last week drew up a list of reasons for continued growth.

* From within: International demand for high-tech products manufactured in the Southwest; national/global increases in tourism, the No. 1 employer industry in 9 of 13 Western states; tax climates that favor the creation of small businesses; and the prospect of more global trade through the North American Free Trade Agreement (NAFTA).

* From without: The downsizing of corporate US has cost 4 million jobs in Fortune 500 companies since 1980. The flight of white-collar workers from such yuppie bastions as New York City, Chicago, and Los Angeles has been exacerbated by the attraction of lower-priced homes in Southwest areas including Taos, Santa Fe, Summit County, Colo., and Park City, Utah.

"Bill Clinton take notice," Mr. Burgess says. "You may not need a program to jump-start the economy if you can create the situation that is hospitable to the start-up of new businesses."

Growing acceptance of fax machines, modems, and nonsite-specific professions such as consulting have become a major reason for population flight from major metropolitan areas. Texas, California losing out

The states hard-hit by recession, Texas and California, are another factor. Both states are watching businesses flee to Arizona, New Mexico, and Utah, lured by tax incentives and a higher quality-of-life. Throughout the Southwest, the string of cities luring such refugees has accelerated beyond larger centers such as Tucson, Ariz., Albuquerque, N.M., and Las Vegas, Nev., to smaller communities such as Arizona's Gilbert, Prescott, and Mesa.

The steepest growth has come in Nevada, where employment and population increases have led the nation for five consecutive years. Close behind is Arizona, which last year moved from 35th to 7th among US states in creating new jobs. New Mexico has also outpaced the average national job growth from 1989-1991.

"Arizona was one of the few states that didn't have negative growth during recession," says Bruce Sankey, director of communications at the Arizona Department of Economic Security. And true to many predictions, the state is coming out of economic doldrums ahead of most other states. After reaching an unemployment peak of 8.7 percent in January 1991, the state's joblessness had dropped to 5 percent by last July. Though commercial retail space still languishes at about a 20 percent vacancy rate, sales of s ingle-family homes jumped 30 percent in 1992.

Led by such moves as the transfer of 2,000 jobs at Hughes Aircraft from Pasadena, Calif., to Tucson, Arizona's labor force in December grew by 10,000 people, a rate four times the regular rate. After 19 months of year-to-year job losses, both November and December 1992 figures exceeded those of 1991.

"We are expecting to see higher and higher job growth throughout 1993," Mr. Sankey says. Growth regulation a big issue

Besides lifestyle shifts, the population growth is forcing new political dynamics and cultural clashes. Traditional urban/rural distinctions are fading. There are new battles lining up over government regulation of public lands, growth issues, and the environment. Water issues have become the focus of massive demonstrations in Las Vegas, Taos, and Santa Fe.

"The old Southwest is gone, swamped, exploited, and marginalized by the masses," says Joseph Wilder, director of the University of Arizona at Tucson's Southwest Center and a lifelong Tucson resident. Lamenting the displacement of American Indians and Hispanics by the new proliferation of suburbs, he says: " `Southwest style' is now a caricature projected from the minds of yuppies who parachute in to hang out in pseudo-pueblo revival houses."

In a major report to be released next month, entitled "The West Comes of Age: Hard Times, Hard Choices," Westrends chronicles the rise of problems associated with population growth - higher crime rates, increased violations of air-quality standards, legislative deadlock through the initiative process, and illegal immigration that drains social-service revenues but does not produce tax revenues.

There will be increased pressure to solve such problems on a regional basis with cooperative interstate strategies, observers say.

Failing that, the limited ability of government to assuage such concerns will provide its own checks and balances to more population growth.

"Clearly, new battle lines are being drawn," Mr. Grose says. Citing Nevada, traditionally the most pro-growth state but which in recent years has moved toward more moderation, Grose says: "Whereas, before growth was the answer to every problem, it is increasingly being questioned. That shows a significant change of attitude for the entire region."

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