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RURAL BOOMTOWNS: THE RELATIONSHIP BETWEEN ECONOMIC DEVELOPMENT (c) Housing Assistance Council, 2000
Washington County, Utah Because of its natural and historical attractions, Washington County was able to sustain a three decade long boom triggered by incoming retirees (1970s), tourists (1970s to 1980s), and inmigrants from California (1990s). Due to its primary appeal as a retiree-attraction county, the economic growth in Washington came from service sector industries such as health (at the upper end) and food/beverage and retail (at the lower end). Since the majority of growth was in low-wage jobs, and since Washington County was virtually the only stable employment center in the region, the county attracted a population of young "boomer" families who were much more poor and in much greater need of affordable housing -- particularly rental. Even when the "boom" began to slow after 1996, there were still wait-lists for Section 8 rental units and housing costs have shown no sign of abating. History The preconditions for Washington County´s exponential growth were in place long before any settlers arrived -- in fact, long before any human beings had appeared on the planet at all. Eons ago, in the far southwestern corner of Utah, three geological provinces (the Colorado plateau, the Rocky Mountain Province, and the Great Basin) crashed together to create a spectacular, tangled and rocky landscape that would capture the imagination of people for centuries to come. Utah´s human prehistory covers more than 10,000 years, from the Archaic and Anasazi (Pueblo) peoples, up to the more recent Ute, Paiute and Navajo tribes. A large number of Southern Paiute archeological sites remain in Washington County, and the Shivwits branch of the tribe lives on tribal lands just west of the city of St. George. The first European arrivals to the area were a 10-man exploration team from New Mexico led by two Franciscan priests -- Fathers Dominguez and Escalante -- who kept detailed diaries on the geography, plant life, and indigenous peoples of southern Utah. Their writings paved the way for future explorations by mountain men (such as Jedediah Smith in the 1820s) and expedition groups (such as the Donner Party in 1846). When the founders of the Mormon church were assassinated in Illinois in 1844, their followers began a long trek to find a permanent home where they could worship freely. In May 1861, Brigham Young -- the Mormon prophet-colonizer -- sent 309 families from their farms in northern Utah to colonize the settlement of Tonaquint, which is now Washington County. Because many of the colonizers were originally from the American south, and because the area eventually became home to a thriving cotton industry (as well as wine and molasses), it became know as "Utah´s Dixie." In the 1870s, Brigham Young contracted with Union Pacific to build part of the transcontinental railroad, and railroad lines eventually connected many of the Utah settlements and mining towns to the territory´s capital in Salt Lake City. One of Washington County´s neighbors, Cedar City in Iron County, was a direct beneficiary of the railroad and became the hub of southwest Utah´s economic activity until the 1970s. From 1875 to 1880, Washington County´s Silver Reef mine provided more than $8 million in gold bullion that was shipped by Wells Fargo back east. The era also saw a number of social and economic experiments by the Mormons including the Zions Cooperative Mercantile Institution, and communal living sites in St. George called the "United Orders." The economy flourished, bringing with it the construction of monuments such as the historic courthouse (1870), the social hall and opera house (1875), the St. George Latter Day Saints (LDS) Tabernacle (1875) and the St. George LDS Temple (1877). In 1909, a giant canyon originally surveyed by John Wesley Powell was designated a national monument by President William Howard Taft. Originally the Mukuntuweap Park (after its native American name), the park´s name was changed to the Zion National Monument and the area was designated a national park in 1919. A one-mile-long tunnel was cut through solid sandstone in 1930 (at a cost of $2 million) and several improvements were made by the Civilian Conservation Corps (CCC) during the next ten years. The park, along with its future visitors centers, scenic overlooks and hiking trails, would become one of the main engines of Washington County´s economic growth in later years. The mining industry shifted from silver to copper and coal by the turn of the century. From 1900 up until the Depression era, southern Utah´s economic history was dominated by battles between coal mine owners and militant labor unions. In 1933, the United Mine Workers of America succeeded in unionizing the Carbon County coal mines; however, the following Depression years dealt Utah mining and agriculture a series of heavy blows. Severe droughts in 1931 and 1934, combined with high freight rates, decimated southern Utah´s economy. The New Deal era brought new life to the area with Works Progress Administration and CCC reclamation projects, and World War II brought an increased demand for agriculture and the location of war-related industries to the state. However, it was not until word got out about Washington County´s picturesque, temperate climate that the far southwest corner of the state started experiencing major growth. History relates that Brigham Young bought and renovated a home in Washington County, where he spent the last winters of his life. The area´s initial economic boom would be brought by older people in the twentieth century who, although not aware of it, were following the prophet´s example. Boom, Boom, Boom: Retirees, Tourists, and Refugees Unlike the previous three boomtown examples, Washington County´s economic boom has sustained itself for three decades. As a mature, nonmetro "retirement destination" county, 3 Washington County has not only enjoyed a sustained rate of growth, but it has also reaped a windfall from the multiplier effects of retiree attraction. Around the country as far back as the 1960s, factors contributing to early growth in retiree destination areas included better health, earlier retirement, and higher incomes for seniors, as well as desirable rural living conditions and natural attractions to draw them. In the early 1970s, Washington County was host to incoming flocks of "snowbirds" -- retired individuals who wanted to escape frigid northern temperatures to the temperate climate of "Utah´s Dixie." One 15-year resident of the county attributes its success as a retirement haven to two key events in the 1970s. The completion of highway I-35, which runs through St. George, made the city and its retiree attractions far more accessible to travelers and drew business revenues away from Cedar City. In addition, the St. George city council´s decision to build a nine-hole "executive" golf course paved the way for the area´s eventual status as a retiree golfer´s paradise -- with nine golf courses (seven municipally owned), three of which are championship courses and two of which are Utah´s "top two." Finally, the LDS Temple had always served as a draw for elderly Mormon Utahans wishing to live out their days in religious service. Even before the Interstate and the golf courses, Washington County´s emerging health care industry was available to met the demands of those in their "winter years," eventually expanding to include 11 nursing homes and the Dixie Regional Medical Center (DRMC) -- the county´s largest private-sector employer, established in the 1950s. The DRMC is now a 137-bed regional facility with a wide array of specialized services. Since the hospital is owned by a not-for-profit multi-hospital system, it is also able to provide quality health care to any patient, regardless of their ability to pay. The health care sector is virtually the only thriving service-sector industry in rural areas that pays wages comparable to the former industrial leaders, such as mining, oil, gas and machinery. The booming population of seniors has also brought a large demand for bargain retail stores such as WalMart, Thriftway, Harmon's and Kmart -- all among the top employers in Washington County as well. By 1984, Washington County had the highest percentage of persons age 65 or older in Utah at 14.6 percent (9 percent statewide). The overall result of Washington County´s longstanding attraction to seniors was that, as early as the 1970s, its growth was already outpacing much of the rest of the nation. In 1960, the population was just over 10,000 and in 1975, nonfarm jobs in the county totaled just under 4,500 positions. According to one interviewee, businesses around St. George consisted of "one gas station, one motel, and a fruit stand." By 1980, the county had more than doubled its population to 26,000 people. Hotel room tax records for Washington County indicate that its second boom came in the late 1970s and early 1980s in the form of the tourist industry. Retirement destination counties tend to stimulate tourist growth, simply because the amenities that attract seniors attract many other people as well. The wide-open spaces and geological wonders of "Utah´s Dixie" have made it a tourist super-magnet. However, it was not until the late 1970s that the combination of I-95 access and an effective marketing campaign by the newly incorporated Five-County Association of Governments began to bring in the travelers. By 1982, roughly 1.5 million people had visited Zion National Park, and by the end of the 1980s, the county´s population had shot up again to 48,560. The 1990s brought the area´s third boom -- the inmigration of a host of Californians seeking refuge from a sour economy, smog, earthquakes, floods, fires, and urban unrest. As early as 1990, 18 percent of Washington County's population had lived there for only five years or less and as of 1999 there are very few second generation residents of St. George. As the inmigrants settled down and became homeowners, real estate and mortgage companies thrived and finance sector jobs had expanded by 11 percent in 1996. The boom in homeownership and the constant waves of visitors produced a terrific gain in the transportation, communications, and utilities industries, which grew by 12 percent within the same year.
Great Service, Little Pay In addition to a higher senior population, Washington County also has a "bottom-heavy" population at its other end. Roughly 36 percent of both Washington County and Utah inhabitants were under 18 years of age in 1990, compared with only 26 percent nationally. A high share of persons on both ends of the age spectrum has meant that Washington County has a relatively small population in the "middle" ages. It also suggests that Washington County has a very high dependency rate, with a much smaller share of the population in the "working and earning" ages than is the norm. Without Dixie College, this segment of the population would shrink even more. The 1990 average monthly wage in Washington County was $1,562, which is substantially lower than the statewide average of $2,016. Nominal wages in Washington County have risen substantially over the last decade, up 55 percent from $1,005 in 1983. However, inflation-adjusted wages show that during the 1980s, the average "real" Washington County wage dropped steadily. Since 1990, the inflation-adjusted average wage has risen slowly. However, the 1996 adjusted wage of $996 still fell below the 1983 average of $1,009. The state as a whole has experienced the same trend. In 1996, the average wage in Washington County measured a little more than 77 percent of the average Utah wage. This lower than average wage is noticeable across all major industries. Wages in Washington County´s public sector are closest to the state average, while wages for mining show the widest variance. For most of the 1980s, Washington County wages averaged 74-76 percent of the state average. However, between 1993 and 1995, the gap closed, and then dropped again in 1996. Washington County´s average monthly wage ranks in the bottom half of Utah counties. The average wage in mining-dominated Emery County measures more than $900 higher than Washington County´s. The county´s heavy reliance on jobs in the retail trade (where wages tend to be low and jobs are often part-time) contributes to its low showing among all Utah counties. Additionally, household and family income are both lower than in Utah or the nation. In 1979, slightly more than 50 percent of the area´s households received less than $25,000, compared to about 40 percent for the state as a whole. In 1990, the average family income in Washington County measured 83 percent of the state average.
Housing Affordability As Washington County´s boom accelerated, housing affordability became a function of age as well as income. By 1990, the vast majority of householders were owners (71 percent out of 15,256), and their median age fell into the 55 to 64-year-old range. For renters, who made up the other 29 percent of households, the median age range was considerably younger -- 25 to 34 years old. Homeowners had also moved into their homes roughly a decade earlier than their renting juniors. In the 1970s, only 2 percent of Washington County´s 1990 renters had arrived, compared with 17 percent of the 1990 owners. A decade later, however, 93 percent of the renters had moved in, versus only 69 percent of homeowners -- most likely reflecting the increased demand for service sector labor that came after the arrival of Washington County´s seniors. In 1989, the overall poverty rate in Washington County was not very remarkable at 9.2 percent (compared with 10 percent nationally and 8.6 percent in Utah). However, young adults were not only more likely to be renters, they were also far more likely to be poor. Among 18 to 24 year olds, roughly one-third were below the poverty level. At the other end of the scale, senior citizens from age 65 to 74 were the least likely to be in poverty -- only one in 17. From 1970 to 1980, the total number of housing units built in Washington County had already jumped by 121.6 percent to 9,700 per 7,800 households and by 1990, the number of housing units had shot up again to over 19,523 per 15,200 households. Nonetheless, in spite of a housing surplus of thousands of units, housing officials in the county say that the cost of housing increased dramatically, making affordable housing almost impossible to find (much as it did in the rest of Utah). In addition, cost burdens hit those at the lowest end of the income scale the hardest. As of 1989, 24 percent of all renters (typically young families) had incomes of $10,000 per year or under; out of those, 67 percent (711 households) were paying 35 percent or more of their monthly income for housing. From 1992 to 1998, seven new affordable housing complexes have been built through the Low Income Housing Tax Credit program for a total of 464 units. The county also has a 30-unit public senior housing complex and 161 Section 8 units (with 68 reserved for elderly persons and persons with disabilities). From 1998 to 2004, however, 140 units will lose their HUD funding, and residents with vouchers may not have enough money to even afford subsidized units with meager service and retail wages. The median housing value for single-family homes in Washington County also shot up from $60,100 in 1980 to $78,300 ten years later. County officials speculate that the difference in California and Washington County home prices meant that the inmigrants could often afford upper-end housing that would still be far cheaper than any comparable housing in the sunshine state. By 1990, homeownership had become far more affordable for families in the low-to-moderate income categories, with slightly more than 50 percent of households with a gross income of $10,000 to $49,999 paying less than 20 percent of their monthly income for housing. Washington County´s triple boom had created a stable, affluent homeowning core. However, as with rental cost burden, homeowner costs disproportionately impacted extremely low-income families; 48 percent of households in the $10,000 or under bracket were paying at least 35 percent of their monthly incomes on housing. While county officials describe the county's annual job growth as impressive throughout the 1990s, in 1994 Washington County hit "super boom" status with employment expansion of almost 20 percent. However, since 1994, the job growth rate in Washington County shrank rapidly -- from 11 percent in 1995 down to 4 percent in first quarter of 1997. In 1995, Washington County had the third highest growth rate in the state of Utah, but dropped to fifth in 1996 -- even though it still had the fifth lowest jobless rate in the state at 3.6 percent. A large part of Washington County´s slow-down was due to the rebound of California´s economy in 1996; however, the county's net inmigration rate remained at 7 percent (with only 1 percent statewide). The Chamber of Commerce in St. George (the county seat) still sets the 1998 population at an all-time high of nearly 73,000, with 50,000 living in St. George alone. Projections by the Utah Governor´s Office of Planning and Budget project show the Southwest Service Delivery Area (SDA), which includes Washington county, will continue to have the highest employment growth rate in the state through the year 2000. In fact, the Southwest SDA is projected to create more new jobs than the Weber/Morgan or Davis SDAs, both of which are metropolitan districts. However, as with many fast-growing rural areas, most new jobs in the Southwest SDA will be provided by low-paying service industries (approximately 35 percent), followed closely by trade, with 25 percent growth. The service sector will no doubt be fed by the increasing number of tourists in the county. In 1995, tourists made roughly 2.4 million visits to Zion National Park, almost double the number of visits in 1982. Even though the population density of Washington County rose from 20 to 30 persons per square mile from 1992 to 1998, it still contained abundant open space (ranking far behind people-packed Salt Lake and Davis counties, at over 500 persons per square mile). Consequently, by 1996 hotel/motels made strong economic gains and trade produced the largest number of new jobs, up 730 positions -- almost half of which were in eating and drinking establishments. Building permits have followed the same basic pattern as the rest of Washington County´s economic growth. In 1995, over 2,000 dwelling units were approved. By 1996, the number had dropped to slightly more than 1,900. Most of the residential activity and inmigration occurred in St. George, which accounted for about half of the residential permits in 1996 -- the majority of which were for single-family housing. New residential valuation dropped by more than one-fifth between 1994 and 1995, and by 1996, property values in both new residential and nonresidential categories had declined with California´s rising fortune. As of 1998, there was still a long waiting list of families hoping to receive some sort of housing assistance. The county cut off its waiting list at 250 families, and believed that if they maintained an ongoing waiting list the number of families would have probably increased to about 1,000. According to Washington County´s 1998 affordable housing plan (mandated by the state of Utah), housing affordability has reached crisis levels. Federal income tax data for the area show that, out of a total of 22,499 households, 56 percent (12,189) are moderate-income and 38 percent (8,455) are low-income.4 However, the Washington County Multiple Listing Service shows that as of 1998, there are only 351 single-family residential units available to moderate-income households, and 148 units available to low-income households. In an even more vivid illustration, the plan relates that in the Bloomington Hills neighborhood, "only 10 homes sold for less than $120,000 during 1998, while 53 homes sold for more than $120,000."
Lessons Learned The benefits of "rural retiree attraction" as an economic growth strategy for nonmetro areas has been the subject of much recent study. As of 1990, 40 percent of retirement-destination counties were already located in remote rural areas, and another 50 percent were in nonmetro or metro-adjacent areas with populations from 2,300 to 20,000. In the 1980s, nonmetro retirement counties made up only one-fourth of all nonmetro counties; however, they contributed over half of the nonmetro population growth from 1980 to 1986. The tremendous power of retiree attraction as an economic growth engine is nearly indisputable. Incoming retirees stabilize areas with declining populations; they have higher incomes and spend more money locally; they add considerable amounts to the local tax base without competing with other residents for jobs; and their increased demand for retail services creates jobs for the young while their demand for medical services creates a well-paying health-care industry. As in the case of Washington County, retirement-attraction areas also trigger exponential growth in the tourist trade and attract affluent homebuyers from other states. On the down side, tremendous economic growth does not necessarily create terrific jobs and income. In fact, growth in retirement destinations has had the exact opposite effect. As of 1986, the average income of nonmetro retirement counties was 3 percent below the nonmetro average. In Washington County, the service sector (in spite of the lucrative health service industry) had created overwhelmingly low-paying food and beverage service positions. The majority of workers in these jobs were young "boomer" families (with an average of three children) moving in from other areas in southwest Utah, where the precarious mining industry made the city of St. George almost the only source of stable employment. Most importantly, retiree inmigration (and its later draw on affluent out-of-staters) made affordable housing virtually inaccessible, particularly for the young renters who make up most of the service economy workforce. Renters with less than $10,000 gross annual incomes are 11 times more likely to be severely cost-burdened than renters in the $20,000 to $34,999 range -- even though each made up roughly one fourth of Washington County´s total renter population. Although the majority of the county´s economic growth was anticipated to be in the lower-wage service sector, the majority of new homes built as of 1998 were single-family homes, typically well out of reach for a five-member "boomer" family living from paycheck to paycheck. The fact that the number of units built in Washington County shot up by 121 percent in the 1970s and an additional 100 percent in the 1980s did not have an impact on lower-income residents. ability to house themselves. In 1998, the county had applied to purchase a duplex development, to be managed by St. George, that would have up to 400 low-income senior housing units, and the 1998 affordable housing plan has called for extensive affordability measures, including:
However, the above figures demonstrate that, while a super-growth driven economy may well create adequate housing (in fact, an overwhelming surplus in Washington County’s case) vigorous government action in conjunction with the private and/or nonprofit sectors will be necessary to successfully house its junior residents.
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