Utah County: Ground zero for the state’s burgeoning population growth

A cavernous mall filled with vacant stores on one of the busiest city blocks offered a nightmare scenario for Orem. When The Woodbury Corporation approached city leaders with plans to do a major revitalization of University Mall that mirrored similar mall redevelopments in Salt Lake County, they quickly embraced the idea.

Turning University Mall into University Place called for adding office buildings, new housing, a new park and additional retail space. The Woodbury Corporation wanted to reinvest $200 million into this 120-acre mixed-use redevelopment project. Orem passed a $500 million community development agreement (CDA) to back the project.

The transition to University Place is bringing some dramatic changes. The Orchard, a large outdoor park, replaced an empty anchor store. An office park with five buildings totaling 700,000 square feet is in the works. Upscale housing can be found on the east side of the mall campus at Aston Apartments, and other new apartments are on the docket. More restaurants and a hotel are also in future plans.

Full development of University Place is forecasted to add $412 million to the local economy and create more than 4,000 new jobs.

“What’s happened is it’s brought a sense of energy to the community,” says Orem Mayor Richard Burnst. “It’s brought a sense of excitement. Orem has a 25 to 50 percent lead-in on retail from other communities. That means many people from other places come to shop here.”

What is happening at University Place mirrors the transformation taking place all across Utah County. A growing number of businesses are setting up shop within the county and multiple communities from Lehi to Payson are in the midst of a housing boom.

A thriving hub for industry

Silicon Slopes has drawn the spotlight for driving Utah’s high-tech boom. But it isn’t the only industry in Utah County that is enjoying healthy growth.

Utah County added 13,471 jobs from August 2016 to August 2017, according to the Utah Department of Workforce Services. That’s a 5.8 percent increase over that 12-month period. Education and healthcare is the largest industry in the county, with Brigham Young University, Utah Valley University and Utah Valley Regional Medical standing out as the largest employers in this industry.

Significant gains are being felt in other industries. In March 2017 alone, five different industries added more than 1,000 jobs in Utah County with education, healthcare and social services (2,303) and trade, transportation and utilities (2,205) leading the way.

New business growth is also robust throughout the county. Through September 2017, for example, 181 new businesses have set up shop in Orem, 172 in Provo and 121 in Lehi since the start of the year.

“It’s a great place to live and a great place to play,” says Rona Rahlf, Utah Valley Chamber of Commerce president. “This is just kind of a magic moment that’s been building over time and just propelling the business growth here.”

One factor aiding business growth is the presence of two universities. BYU and UVU each have deep roots within many of the burgeoning industries. Both universities are doing their part by identifying what skills businesses within these industries need from their workforce and then creating curriculum focused on developing those skills.

Many BYU and UVU graduates are sticking around and creating a reservoir of talent for startups and more established companies alike. It is playing a critical role in turning Utah County into a magnet for any company looking to create a lasting footprint and a destination for people looking to carve out a career in these companies.

The University of Utah’s Kem C. Gardner Policy Institute projects the number of Utah County residents will increase to 1.6 million within the next 50 years. Organic growth from existing residents will fuel for three-quarters of the growth, with outside migration accounting for the rest. By 2065, an estimated 40 percent of new Utah residents will live in Utah County.

The rapid increase raises concerns on how to manage that growth. Building adequate infrastructure, transportation avenues and providing enough water to go around are critical issues that government and business leaders are facing now.

“Where population goes, so goes the business community to support that population,” Rahlf says. “I think we’re just starting to see the ramp up. That’s why I think there’s a little bit of concern to burn in the business leaders and our community leaders. How are we going to manage this growth? Are we prepared and what are we doing to be prepared?”

Planning for growth

Strong economic conditions create a strong demand in the housing market. That’s naturally the situation Utah County is in at the moment. Population growth means large swaths of open space is being gobbled up into expanding bedroom communities and cities.

More than 2,600 residential housing units were added in Utah County in 2016 alone. Demand is outpacing supply, however, and that’s reflected in home pricing. The median sales price for August 2017 was $277,350, an increase of 2.7 percent over the same month in 2016. And 5,941 homes were sold during the month, a 0.4 percent increase from August, 2016.

“When the market is good, you see this type of growth,” says Steve Caldwell, executive officer of the Utah Valley Home Builders Association. “I’ve seen ups and downs. We’ll have another recession or regrouping and it will cause problems and slow down again. But, right now, Utah in general is one of the healthier markets in the nation, and Utah County is probably the healthiest market in Utah.”

Caldwell says the UVHBA works with individual Utah County cities to try to reduce fees as much as possible, so that homebuilders can keep up with demand for new housing and residents can afford to purchase those homes. Some places, it can cost up to $22,000 before home construction even begins because of impact fees.

Construction costs and home prices are a concern, but Caldwell says the housing market in the county is still much more vibrant and affordable than many other parts of the nation.

“I know we have a really strong economy,” Caldwell says. “We have a really strong job market. There’s just a lot of opportunity with affordable housing and housing both. We have a really good balance or a really good mix of both custom homes and track homes that are going through the valley. It’s a very healthy market right now.”

Where to put housing and office space while preserving open space is an ongoing puzzle being pieced together by many Utah County communities. Some cities, like Provo, Orem and Lehi, are looking at creating more transit-oriented developments around potential mass transit hubs. They are also implementing strategies to create controlled development.

Orem, for example, passed a law preventing zones being changed to facilitate high-density housing along University Parkway, State Street, 800 North and Center Street. It slowed apartment building in those areas while the city figures out how to best develop along those major corridors.

Neighborhood plans have been implemented by Orem city leaders throughout various neighborhoods to manage growth. The city has worked to preserve open space in several areas by creating parks and limit high-density housing in areas where it would negatively impact existing neighborhoods.

“We’re looking to manage and balance the growth and that’s what we’re doing,” Burnst said. “We don’t want to be a community of just all apartments. We don’t want to be a community of just all car dealerships. We want to have a balanced approach to our community.”