Utah Ranks Among The Fastest Growing States In The Nation, Here’s Why

In Part One of a two-part series, we take a look at Utah’s booming economy and key drivers in the economic expansion. 

Utah’s economy is booming thanks to a combination of strong employment growth, a vibrant tech industry and collaboration between business, labor and government.

The Beehive State ranks among the fastest-growing states in the nation, with a 1.9 percent growth in population from 2017 to 2018 and is the youngest state in the nation with a median age of 30.5 years. 

Despite falling fertility rates, Utah continues to have the largest household size in the nation at 3.19. Ninety-one percent of the population in Utah lives in an urban setting and the population continues to diversify racially and ethnically.

Following the release of the July 2019 employment numbers for the state of Utah, the U.S. Bureau of Labor Statistics data shows Utah is ranked No. 1 for total job growth in the nation at 3.6%. In addition, Utah is ranked No. 1 for private sector job growth at 4%. For unemployment, Utah is ranked No. 5 at 2.8%, tied with Hawaii.

In 1997, the nonprofit Envision Utah launched an unprecedented public effort aimed at keeping Utah beautiful, prosperous, healthy and neighborly for future generations. The initiative brought together residents, elected officials, developers, conservationists, business leaders and other interested parties to make informed decisions about how the state should grow. Housing was one of the cornerstones of that vision. 

Utah was not growing very much through the 1970s and early 1990s, said Robert Grow, president and CEO of Envision Utah. “We began to grow very rapidly as our economy really started to take off. We had new industry clusters, including high-tech, that were growing. And because of that, the state and the public became very focused on growth in the ’90s.” 

Utah’s labor market includes approximately 1.6 million people, most of them concentrated along the Wasatch Front, a chain of contiguous cities and towns stretched along the Wasatch mountain range.

The state’s unemployment rate in October stood at a very low 2.5%. The Utah economy includes 1.5 million jobs, with 84% of these in the private sector. The pace of Utah job growth (2.8%) was significantly higher than the national average (1.7%) and every county but two–Duchesne and Millard–registered employment gains from February 2018 to February 2019.

The first major effort to bring the public and leaders of Utah together was from 1997 to 1999. To understand residents’ hopes for the future, Envision Utah conducted public values research, held over 200 workshops, and listened to more than 20,000 residents between 1997 and 1999. Grow was the founding chairman of Envision Utah, and from that initiative came a vision called the Quality Growth Strategy.

The strategy engages not only a broad range of stakeholders from the private, public and nonprofit sectors but also the general public.

“We renewed that vision at a much larger scale for the entire state with our governor in the lead starting in 2013 through 2017, and that vision is called Your Utah, Your Future, said Grow. “It has specific goals about housing and strategies, which are being implemented today. We didn’t wake up one morning and say we don’t want to be San Francisco, we don’t want to be San Diego. We’ve actually been working on this issue for more than 20 years to try and make certain that we do have affordable housing in the region for everyone.” 

Grow said Utah’s growth rate was stagnant through the 1970s to early 1990s, and then the state began to grow rapidly as its economy took off. “We had new industry clusters, including high-tech that were growing,” he said. 

Utah’s thriving tech sector is driving much of the state’s success, helped by its deep talent pool and relative affordability compared with other growing tech hubs. Proximity to other Western tech centers, the region’s large and growing talented workforce and lower real estate costs have spurred development of Silicon Slopes, the hub of Utah’s startup and tech community, and the University of Utah Research Park, also known as Bionic Valley, a bioengineering epicenter on the campus of the University of Utah in Salt Lake City. 

“The state and the public became very focused on growth in the 1990s,” said Grow, adding that “housing was one of the six major goals with housing affordability and availability and a set of goals and strategies to implement that.”

Probably the most significant impact of Envision Utah has been to help local cities and towns rethink the growth pattern. The original vision has been refreshed a number of times. 

“We’ve been working hard on this issue for about two decades,” said Grow. “That sort of set the stage for a lot of the things that have happened.” 

Utah’s home-building boom led the nation last year, adding homes and apartments at a rate nearly three times the national average. But economists say more is needed to reduce shortages and help lower current high prices that shut out many people from buying or renting.

“Affordability is still a serious issue, and it’s getting worse, although it looks like housing prices might be moderating a little bit,” said Grow.

Approximately 3 million people live in Utah. By 2050, the population is forecast to nearly double to 5.4 million. Grow noted that Utah has been one of the few places in the country where over 20 years the state undertook a significant effort to make certain there were jobs for everybody and that incomes were growing.

“The standard growth issues that were going on here when we set out to find answers as a region in 1997 are still challenges today,” said Grow.

He added, “Our first approach to housing has been a major effort here to make sure that the economy was functioning in an equitable way so that those who were in lower incomes could move to higher income levels and that people were not left in intergenerational poverty. That’s been one of the major efforts of the region overall with respect to housing is to help people who are already here and immigrants and refugees rapidly move up in this economy,’ said Grow, adding: “Some people have the perception that Utah is sort of a backwater when it comes to equity and immigration, and that’s not true.”

The original set of concerns — affordability, air pollution, teacher shortages — have not changed much because Utah has been a rapidly growing region. 

“The challenges then were we had new EPA air quality standards we needed to meet,” Grow said. “The traffic and congestion were getting worse. The cost of living here was going up including the cost we all share of creating new infrastructure as we were growing. Housing prices were rising. The city had some distortions in the way the real estate market was working based on how it divided up sales tax.” 

“There’s not a growing region in America that’s not currently having some housing challenges,” said Grow, adding that “we’re not any different except that we started working aggressively on this issue a couple of decades ago and are making significant progress.”

He said Utah has major goals and strategies it has been implementing over the last 20 years. 

For example, the state has been working to address air quality issues. Utah’s air is clean much of the year, but in many parts of the state, pollutants regularly exceed healthy air standards during the winter and also at times during the summer.

“We have a beautiful mountain range to collect the water, but it also stops the air from moving out of the valley in the wintertime,” said Grow, adding that “we have just gotten in compliance after three years.”

Utah’s unemployment remains at a near record low in Salt Lake City. Grow said, “We have the lowest unemployment in the country, and because of that people are coming here. People are staying here because there are good jobs. So keeping up with that housing market has been a challenge. We’ve been building more housing units in Utah than we’ve ever built before. But there are a number of things going on right now to help with that housing. One is the mix of housing has been changing, so we have a lot more multifamily opportunities. Another thing that has happened is our largest home builder, Ivory Homes, is working with the universities and is offering a major financial award and competition every year on how we can improve housing in the state. And Ivory Homes actually has a special program now to help school teachers, first responders and others find housing in the community.”

One of the biggest changes in the region is housing near a transit system. Grow said, “Our first approach to housing has been a major effort here to make sure that the economy was functioning in an equitable way so that those who were in lower incomes could move to higher income levels and that people were not left in intergenerational poverty. That’s been one of the major efforts of the region overall with respect to housing is to help people who are already here and immigrants and refugees rapidly move up in this economy,’ said Grow. “Some people have the perception that Utah is sort of a backwater when it comes to equity and immigration, and that’s not true.”

Grow said, “Since 2010, 43% of all new multifamily units built in the Wasatch Front have been built within half a mile of a rail station, which is about a thousand steps. So that means we’re building lots of housing which is transit-oriented development where people can have housing right near the station and be able to use the transit system and avoid using a car and lower the cost. Thirty-seven percent of new office buildings are around the transit system. We have sort of sea change in urban development because we have this fabulous transit system.”

Probably the most significant impact of Envision Utah has been to help local cities and towns rethink the growth pattern. Grow said, “Utah started out with a bunch of settlements, and those grew into cities, and eventually they grew together along the Wasatch Front. Rethinking those urban patterns, sort of recapturing the depth of our path, where we had sort of discrete cities and towns, discrete neighborhoods, has been a major effort over the last 20 years.

“One of the things that came out in the quality growth strategy was civic will to build a really good public transportation system. And so we built public rail faster than anywhere  in America over the last 15 to 20 years. We have a very good mixture of transit systems here. We have a major backbone of commuter rail system that’s 92 miles long that runs up and down the Wasatch Front. And then we have all these light rail lines that go off of it. We have bus rapid transit, we have street cars. People who come to Utah are shocked to see this fabulous transit system in what is viewed as a Western conservative state.”

In Utah, just under 30% of the average home’s budget is spent on transportation. Grow explained, “If you have two cars, and you’re at the median income, you’re talking about 30% of your budget, and so building this transit system has been aimed at allowing as many people who would like to to buy homes or live in places where they can use the transit system. They can use that portion of their budget so they can spend their money on other things, including houses.”

On Tuesday, Part 2 takes a look at a 4,000-acre master-planned community in Utah and downtown Salt Lake City amenities.