When do you graduate? Where are you planning on living next year? How long will you stay there?
The answers to those questions could determine whether or not you get a job or how much you will pay for a place to live, said Marshall Vest, director of economics and business research at the Eller College of Management.
Vest said a booming job market will be good for students who graduate in a month, but the market will be tougher on those who graduate a year from now.
Also, the Arizona housing market is at one of its worst points since the 1980s, which Vest said has made rentals the best deal for a living space.
But the housing market downturn has also pushed rents upward and the trend will continue, so Vest recommended finding a good house or apartment and signing the longest lease possible.
“”This is the largest decline (in growth) we’ve seen since the 1970s and 1980s.””
– Marshall Vest,
director of economics and business research, Eller College of management
“”The longer the better,”” Vest said.
A decline in the housing market is the main culprit behind what will be a larger recession across the state.
For years, Arizona lived in the popular imagination as a place immune to recessions in the national economy, a factory of jobs, houses and profit that would not slow down regardless of the rest of the country’s financial woes.
“”That’s a myth,”” Vest said. “”We are not insulated.””
Vest authored a study released last month called “”Slowdown Spreads Beyond Housing,”” detailing a statewide drop-off in home construction that will result in a larger recession.
Nine percent of Arizona’s total jobs, and 25 percent of new jobs, are in construction, Vest said. But those jobs are beginning to level off, and Vest said some workers will probably be laid off in the coming months.
“”This is the largest decline (in growth) we’ve seen since the 1970s and 1980s,”” Vest said.
Arizona’s coming recession will probably resemble those he referenced, Vest said, in that it will mean the state’s economy will level off but not necessarily decline.
Another study Vest worked on, headed by Tanis Salant, a research specialist in public administration and policy at the UA, concludes that more than 90 percent of Arizona’s state revenue comes from its cities and towns.
A majority of U.S. states do not have percentages that high, Salant said.
“”Clearly it’s the cities that are the engines of growth in this state,”” said Alberta Charney, another economics and business researcher who worked on the report.
Vest said Tucson accounts for about 16 percent of Arizona’s state revenues, but that number is continually dropping because of tremendous growth in the Phoenix area.
“”Phoenix is just a big elephant,”” Salant said.
Vest said Tucson and Phoenix continue to sprawl toward each other, so much so that he believes they will eventually be one contiguous megalopolis within 10 years.
But even now, Vest said Tucson has begun to function economically as a part of its larger neighbor to the north, so the city needs to look at what role to play in the state’s future.
Vest said Tucson could function as a gateway to Mexico and the rest of Latin America, or as a center of research anchored by the UA.
Councilwoman Karin Uhlich said she agrees that the city will maintain its position of importance due to both factors, and it also serves as the economic center for the southern region of the state.
“”Tucson will always play a pivotal role,”” Uhlich said.
Salant said cities and towns must make sure that they receive tax revenue from the state in the same proportion as they put it in, because if the state were to decide to redistribute the funds differently it would be “”shooting itself in the foot.””
Uhlich agreed, saying she thinks it’s “”absolutely critical”” for Tucson to make sure it maintains its fair share of state revenues.
One way Tucson could improve its prospects for growth is to streamline planning and zoning policies that have slowed larger developments, Salant said.
Neighborhoods play a big part in the decision-making process for where and when building projects happen, but Salant said it would be more conducive to growth to lessen the role of those neighborhoods when dealing with districts like downtown, which are vital to the city’s economic future.
Uhlich said she thinks city policymakers need to be more firm with their decisions to build, giving neighborhoods a say in how development happens, but not the final say in whether it happens at all.
During the last few years, the city has gone forward with more of these large-scale projects, while still getting “”valuable input”” from neighborhoods, Uhlich said.
