Despite economy, Gilbert still fast grower

Growth-dependent Gilbert has suffered at the hands of the housing-driven economic downturn, but it's still growing faster than almost anywhere else in the United States, according to figures released Tuesday by the Census Bureau.

More than 10,000 people moved to town during the year that ended July 1, 2008, making it the fourth fastest-growing American community of more than 100,000 people over the past year. Yet the rate of growth has slowed.

The latest numbers equate to a 5 percent growth rate, a little lower than the 5.3 percent rate the bureau recorded for Gilbert between 2006 and 2007. It's still not as much of a decline as Queen Creek, which saw its growth rate cut almost in half.

Gilbert added more than 100,000 residents since the 2000 census, putting its population on July 1, 2008, at 216,449, an 88 percent increase. It remains the second fastest-growing city in the United States since 2000, behind McKinney, Texas.

Plummeting housing permits and their impact on town revenue have driven the Town Council to approve a quarter-cent sales tax hike to balance the budget, but Mayor John Lewis said Gilbert is continuing to see an uptick in construction activity, with at least 155 building permits for the month of June.

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"It's a good sign that there are more people coming to Gilbert, that it is still a preferred destination for families to relocate to," he said.

He said the town's continued expansion will help bring the resources Gilbert will need to rely on once it is fully built-out, which will probably happen in roughly 2025 with 330,000 residents. "We will not be the second fastest-growing city in the country at some point," Lewis said.

Town Manager George Pettit said the town averaged about 50 home-building permits per month the last few months, down from 250 at its peak a couple of years ago. Ideally, it would have closer to 100 per month in order to pay off bonds that back large growth-related projects, such as roads and utility plants. But 50 residential permits along with current business growth is roughly equivalent to that, he added.

Pettit said these types of unofficial figures released by the bureau provide useful historical information and serve as proof to business and economic interests outside the area about how fast Gilbert is growing. But they don't have much immediate impact.

"We're putting most of our attention on the 2010 census, because that's the number that determines our revenue-sharing totals," he said. The town is already coordinating with the bureau to get census information to the public, though the campaign won't begin in earnest until spring, just before the forms are mailed out.

Besides Gilbert, two other Arizona cities also were in the top 20 nationwide of rapidly growing communities of more than 100,000 since the last census: Peoria with a 45 percent growth rate and Chandler at 39.5 percent.

Overall, Arizona grew at a rate of 2.3 percent in the year ending July 1, 2008, compared with 2.8 percent the year before. And the state population is up close to 31 percent since the 2000 census.

Only a few communities bucked a trend toward recent slower growth, and several small communities actually lost population. Oro Valley managed to maintain its growth rate. And Phoenix actually posted an increase.

Valley economist Elliott Pollack blamed the slow growth rate on a slowdown in migration from other cities because of the jobs being lost in Arizona. He also said there is less illegal immigration from Mexico and other neighboring countries because of tougher employer sanctions law.

"Plus the people here legally also, the Hispanic businesses, are feeling the brunt of the slowdown in commercial and residential construction, tourism and other service industries," he said.

The slow population rate pattern is especially evident in what had been the "hot" growth communities of the first half of the decade, those in what had been the exurbs.

Pollack said this trend will further hurt retail sales and housing, both of which "are already hurting."

"When you add to that slowdown in revenues because people already here are spending less and slowdown from construction sales tax, it essentially means that there simply is going to be a period when cities are going to have to tighten their belt," Pollack said.

Five Arizona communities still managed to post double-digit population increases. But the communities with increases of at least 10 percent all are relatively small - Buckeye, Maricopa, Sahuarita, Somerton and Goodyear.