Valley growth surges

March 11, 2005

DAWN De BUSK/Frontiersman reporter

With one-fifth of the state's population already rooted in the Valley, home construction continues to grow at a rapid pace. Also, since 2000, business growth has experienced a dramatic surge and Mat-Su residents are spending their money locally, according to economist Neil Fried, with the state Department of Labor and Workforce Development.

Palmer and Wasilla are capturing more of their sale dollars than in the past. In 2003, the sales-tax receipts for the two cities totaled $10.2 million.

"The Valley doesn't see a negative outflow of dollars," Fried said. "People are buying more stuff locally. And also, maybe, people are buying more stuff period. Anchorage has lost a lot of customers."

Anchorage is also losing space for future construction, making land and homes in Palmer, Wasilla and some of the outlying areas even more coveted. Not only are homes more affordable due to available space, but people desiring more acreage can obtain that in the Valley, Fried said.

A Mat-Su Borough-based single-family home costs $194,854, which is considerably less expensive than housing in Anchorage and Juneau.

"Housing remains one of the big attractions in the Valley," Fried said. "The Valley is where a lot of Alaskans choose to live, whether they work at Red Dog Mine, work on a platform in the Cook Inlet."

People choose to live in the Valley because housing is more affordable, because it's close to Anchorage without actually being in Anchorage, because of access to Anchorage's airport and because it allows for a certain lifestyle where residents are able to own more land and not have to look at their neighbor, according to Fried.

"We are experiencing one of the best housing years in the country in the middle of a 'recession,'" he said, adding that residents spend 40 percent of their wages on housing.

Besides housing spurts, the construction of hotels is building momentum in the Mat-Su while hotel construction in the rest of the state has slowed, he said. Bed tax revenues for the Valley were $897,885 last year. That number has been rising steadily since 1998, when the bed tax revenue was $280,209.

"Construction is the field that employs most people," Fried said, adding that is different than statewide statistics.

"It's amazing how quickly your landscape changes. I drove by the other day and there was this huge yellow building on the hill," Fried said, referring to the Mat-Su Regional Medical Center, which is being built near the Parks Highway and Trunk Road intersection.

The Valley's population crested over the 70,000 mark shortly after 2000, with 18 percent of the state's population residing here. In 2004, that percentage had risen to 20. Predictions are that the Valley's population could reach 100,000 by 2016. And another 15 years from now, in 2020, Mat-Su could be the home of more than one-quarter of Alaskans, according to Fried's statistics.

The Valley has also experienced vast leaps in business expansion, and the trend has helped keep Valley dollars in the Valley. However, that hasn't stopped residents from commuting to Anchorage or elsewhere, like the North Slope, for better-paying jobs.

"People who live here are attracted to work elsewhere because of wages," said Fried. "But, as time goes on, fewer people will have to commute outside of the Valley for work."

A service and retail boom occurred in 2000, and added 2,000 jobs to the Valley. The number of jobs in the Valley, as of last year, was 16,000. During the past decade, the employment growth in the Valley boomed, jumping upward by 67 percent. Anchorage's number of jobs rose 21 percent, which is a little above the national average of 15 percent.

Despite the business booms, jobs in the Mat-Su still represent only 5 percent of the employment opportunities statewide.

"Employment is a much smaller piece of the pie than population," Fried said. "But that number (5 percent of job statewide being located in the Valley) is going to change in the future. As population grows, the number of businesses will increase,

"People make that choice to commute," he said, adding that Valley residents who have moved from California or Seattle are used to commuting.

Another sign of growth is the number of registered vehicles on the road. The number of vehicles registered in the Valley has outpaced population growth. More than 80,000 vehicles are registered with Division of Motor Vehicles, he said.

"The roads are more crowded. More so than homes. More so than jobs," Fried said, adding he didn't have any concrete reason as to why this trend is occurring. "Those are just fun statistics."