Study: Valley population flat since 2007

A study released this week by the Urban Land Institute says the Valley's population has remained virtually flat since the recession hit in 2007 - a first for any extended period in the metro Phoenix area in recent times.

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The report conflicts with estimates by the Arizona Department of Commerce and the U.S. Census Bureau, which conclude the Valley's population has continued to grow, though much more slowly than in the mid-2000s. It also contradicts anecdotal evidence that the Valley might have lost population since the beginning of the housing market collapse.

In 2007, the state government estimated the Valley's population at 4.2 million, although the study said that estimate might also be high.

The Urban Land Institute study, dubbed "Influx/Outflow: Metropolitan Phoenix," is based on a wider range of population indicators than used by the Commerce Department and Census Bureau, said David Stocker, research director for Urban Land Institute's Center for Balanced Development in the West, who wrote the report.

"The information is not perfect, but when you look at the trend lines, that (zero population growth since 2007) is the conclusion that is suggested," he said.

The issue is important because population estimates are used for distributing government funds to local jurisdictions and in determining how much local governments can spend. Also they are important for planning purposes by government agencies and private corporations.

"Important decisions will be made during the coming year - in both the public and private sectors - that will depend on knowing how the population has changed," the report said.

For example, in terms of land use, a difference between positive 1 percent and negative 1 percent population growth could mean the difference between new housing demand of about 15,000 units or a 1 percent increase in housing vacancies, the report said.

Among the indicators that the study said point to the population leveling off are:

Employment - the jobs/population ratio at the end of 2008 was .44, the lowest in 15 years, but two-income families that have lost only one income tend to stay in the area and get by on that one income rather than relocate.

Births - Live births in the Valley declined by 4.8 percent annually since 2007 as people adjust their family plans to the recession. Deaths in the Valley have also declined by 4 percent annually.

School enrollment - Growth in school enrollment dropped to almost zero during the last two years.

Utility customers - Data from Arizona Public Service, Salt River Project and Southwest Gas show that growth in customer accounts came to a virtual halt in mid-2009.

Available housing/household size - While housing vacancies have risen, so has the number of households "doubling up" and expanding to accommodate family members who have lost their homes.

Bill Schooling, state demographer for the Arizona Department of Commerce, didn't disagree with the report's finding, adding that estimating population is as much an art form as a science.

"They are possibly accurate," he said of the Urban Land Institute estimates. "What makes it even more artistic now is we are not in normal circumstances."

The Commerce Department estimated the Valley's population grew by about 4.6 percent in 2005, 3.5 percent in 2007 and 2.4 percent in 2008. The department has not yet released an estimate for 2009.

The U.S. Census Bureau has made similar estimates.

Schooling said the state's method for estimating population growth, which closely follows housing-unit growth, might need revising to take into account the greater complexity of migration decisions in economic hard times.

A consortium of state and local agencies is working with the Commerce Department to improve the methods for producing estimates, which could become effective after the official 2010 census, the Urban Land Institute report said.

The report said it's too soon to know if the population stall is just a "blip" caused by the economic downturn or the start of a new long-term growth dynamic for the region.

But it concluded that a "sustained" increase in the number of jobs will be necessary to reignite population growth "since there are already many more workers in the region that must be absorbed before the employment base can support new residents."

Only then is housing production likely to ramp up to a more normal pace for the Valley, the study said.