NCPA - National Center for Policy Analysis


May 6, 2005

Phoenix, Ariz., may lack many of the desired accoutrements of historic great cities - grand boulevards, a plethora of inspiring architecture, seething bohemian districts - but it does possess one of the most critical assets, a growing middle class, says Joel Kotkin, an Irvine Senior Fellow at the New America Foundation.

It is here that Phoenix, not the much ballyhooed "cool" cities like Portland, Seattle or San Francisco, shines as an urban beacon.

Two key elements drive Phoenix's middle-class growth: affordability and an expanding economy.

  • Cities that make local critics swoon, like San Francisco, are effectively wiping out their middle class.
  • In that city it takes an income well over $150,000 to buy a home; less than 10 percent of locals can hope to purchase a residence at today's prices.

On average, Phoenix families are several times more likely than those in San Francisco, Boston or New York to own a home. Simply put, the essence of the middle-class dream is becoming increasingly difficult in many of these cities, says Kotkin.

Housing affordability is one of the factors that make Phoenix such a magnet for the aspiring middle class. During the late 1990s, for example, the region enjoyed among the largest net in-migrations of educated people from the rest of the country, according to the U.S. Census Bureau and demographer Bill Frey of the Brookings Institute.

Over the past two decades Phoenix also became a major destination for immigrants, with the foreign-born population more than tripling during the 1990s.

These two migrations are distinct in terms of their education levels and skills, but they both reflect the aspirational appeal of this region. "People vote with their feet," notes economist Elliot Pollack.

Source: Joel Kotkin, "Phoenix's affordability, economy draw middle class," Arizona Republic, April 24, 2005; and "Phoenix Rising: A City of Aspiration," Goldwater Institute Policy Report #204, April 27, 2005.


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