The Challenges and Opportunities of Growth in Metro Denver
The fast past growth of Metro Denver presents both challenges and opportunities.
Metro Denver is one of the fastest growing metro areas in the U.S., ranking 7th among the nation's 53 largest cities. This brings many opportunities to our communities and businesses, but the fast-paced growth also presents some challenges.
On Nov. 3, Vectra Bank hosted a Business for Breakfast event, along with co-hosts Sherman Howard and Rubin Brown . This event presented three highly regarded speakers to weigh in on the challenges and opportunities of our growing community, and what it means for the Denver metro area.
First to speak was Patty Silverstein, President of Development Research Partners and Chief Economist for the Metro Denver Economic Development Corporation. Silverstein discussed the status of key economic indicators for the state.
Nationally, job growth continues to strengthen. There have been 2.7 million jobs added nationally per year over the last three years, with an annual average wage increase of 3.1 percent per year in 2014 and 2015. While household debt has risen, individuals have also increased their savings rate to 5.8 percent, which is up from the 20-year average of five percent.
Overall, Metro Denver is growing, and fast. The population for 2016 is currently at 3.12 million, with an average growth of 50,000 people each year. Millennials make up the largest percentage of the population at 24 percent.
Colorado was the 5th fastest growing state for employment in 2015 and the number one state for in-migration in the country. That means we have strong employment opportunities that are attracting a skilled workforce.
The downside is, while our job market is attracting employees, median home prices are rising as well, with Denver being the 14th most expensive market in the U.S., and Boulder coming in 6th. Developers continue to scramble to meet the need for housing. Multi-family homes currently make up 54 percent of construction projects, up drastically from the 30-year average of 28 percent. Commercial real estate is the most active construction market in the downtown area.
Next to present was Brad Buchanan, Executive Director of Community and Development, City and County of Denver . Buchanan discussed how Metro Denver got to where it is today, where it's headed, and how planning can help us get there successfully.
A surprising fact, Buchanan said that Denver has a lower population density now than it did in the 1950s. Between 1950 and 1990, many residents moved out of Denver into the suburbs during a period of intense sprawl and transit failure. Cars made it easier for commuters to travel farther to work.
Since the 1990s and the advent of a public transportation system, more people have moved back into the city, with transit zones enjoying the greatest density in the city. In Denver density near transit is nine times greater than the regional average. On a positive note 43 percent of commuters now take public transit into downtown Denver for work, yet three quarters of people in the metro area still commute by driving alone. As of right now, Denver has created approximately 18,000 residential units, 5.3 million square feet of retail space, and 5.4 million square feet of office space within a half mile of transit.
The final speaker for the day was Joe Barela, Regional Workforce Director for Arapahoe/Douglas County . Barela spoke about the effects of growth in the workforce, including the city's growing diversity, retention strategies and some of the most impacted industries.
Barela told attendees that since early 2014, Metro Denver has been in what economists call a "full employment" labor market. This means that the area is ranked as a good place to not only work, but live and do business, and therefore attracts talent nationwide. Businesses are attracted to Metro Denver, expanded here, and entrepreneurship is on the rise. To remain competitive in a tight labor market, business leaders must work with the community to maintain a high quality of life and business friendly environment that keeps existing business, attracts new ones, and grows jobs.
Its successful in-migration playing a large role, metro Denver is the second most highly educated state in the country for residents with associate's degrees or higher. This means Metro Denver offers a highly skilled, educated and sophisticated labor force in a variety of fields.
The challenge for Denver is that 73 percent of workers with a postsecondary education were born somewhere else. While Colorado has a 77 percent timely graduation rate from high school, it's still 5 percent below the national average. And minority and low-income youth are even less likely to graduate from high school. The higher you go in education, the less time you will spend in unemployment, but many minorities do not acquire the level of education needed to take advantage of the economic opportunity and high quality of life in Colorado. This is a potential problem because according to the Colorado State Demography Office, nearly 50 percent of the labor force in Colorado will be minorities by 2050.
A solution to this lack of educational availability is to provide options other than traditional college, including skilled labor training and apprenticeships that provide a career path. Many opportunities exist in middle skilled jobs, such as welding, construction trades and engineering technicians.
Overall, the outlook for the Denver Metro area looks promising. The key for businesses will be to remain flexible to changing economic conditions, consider future workforce needs and resource development strategies and become an active voice in how the city plans for this future growth.