PHOENIX — Colin Jordan, a 32-year-old software salesman, lists various predictable reasons for his move to Scottsdale from the San Francisco Bay Area. He likes sun and golf and lower income taxes. But beneath all that is something bigger, which is the feeling that Arizona has welcomed him in ways that California — where he grew up — did not.
There are certain expectations you come into after graduating from college and getting a $90,000-a-year job, and one is that you won’t be paying $1,800 a month for a bedroom in a backyard cottage, which was what Mr. Jordan was doing in the Bay Area. He liked living near his childhood home and working at a tech company in the nation’s capital of innovation. But not if there was no path to what he considered a middle-class life.
“I knew for sure I’m never going to own a home,” he said. “So I talked to my girlfriend, and that was our defining moment. I said: ‘I want to buy a house and start a life. Will you move with me?’”
People like Mr. Jordan — now married and living in a four-bedroom house in Old Town Scottsdale — are a big factor in Arizona’s economic boom, a decade after it was hit hard by the recession. They are also part of a changing political identity that has given the once-solidly conservative state, now home to more than seven million people, a more purple-hued electorate.
On Tuesday, Arizona Democrats will help choose a nominee to face President Trump in the general election. The more significant test will come in November, when Arizona and its 11 electoral votes could tip Democratic for the first time since 1996. Its emergence as a swing state is a reflection of its changing economy.
With the coronavirus outbreak casting a shadow over economic prospects everywhere, it is hard to say what the near future will bring for Arizona. But it is clear how far it has come.
A decade ago, the state was grappling with foreclosures, bank failures and scores of empty subdivisions. Its unemployment rate peaked at 10.9 percent, about a percentage point higher than the nation’s. Today jobs have recovered, and the state is back to building seemingly every kind of development, from high-rise apartments and condominiums in the urban core to golf-course-adjacent ranch homes in the exurbs. (Mr. Jordan’s place, which he and his wife bought for $480,000, has a monthly mortgage payment only slightly higher than their rent in Redwood City. And it has a pool.)
From 2012 to 2018, an average of about 250,000 people per year migrated to Arizona from other states, with the largest contribution coming from California, according to an analysis of census data by Susan Weber for the demographic research site SocialExplorer.com. This is why it costs around $1,000 to rent a U-Haul truck heading from Orange County, Calif., to Phoenix, but only $100 to rent one to go the other way, according to John Burns Real Estate Consulting.
On the surface, adding new people and new subdivisions is the same thing the Arizona economy was doing as the real estate bubble inflated. But the nature of Arizona’s growth — and the kinds of workers it has attracted — has changed.
In the previous cycle, the economy consisted of “building homes for people who build homes,” said Scott Smith, a former homebuilder who served as the mayor of Mesa and is now chief executive of Valley Metro, the Phoenix region’s public transportation authority. The recent expansion, on the other hand, is marked by the growth of finance and technology companies that employ people like Mr. Jordan.
The number of finance jobs in the Phoenix area is up 25 percent since its pre-recession peak in early 2007, compared with 5 percent nationally, with companies like American Express and J.P. Morgan opening or expanding local offices, according to Moody’s Analytics. Technology companies have expanded their head count by about 30 percent in that time, while construction employment is still 24 percent lower than its peak before the recession.
“Our economy has been diversified like I have never seen in my three decades in business,” said Greg Vogel, chief executive of Land Advisors Organization, a land brokerage firm in Scottsdale.
If construction and subprime loans were symbolic of the state’s last boom, this time the image would be offices like WebPT, which makes software used by physical therapists and rehabilitation specialists to manage billing and medical information. Over the past decade the company has grown from a handful of people working out of subleased office space in coffee shops and architectural firms to a 500-person operation with headquarters in a downtown Phoenix industrial space that used to be a tortilla factory.
Inside there are the typical tech office touches like standing desks, Nerf guns, a commitment to dog-friendliness and conference rooms named after booze (margarita, gimlet, old fashioned, mojito). Heidi Jannenga, a co-founder of the company and its chief clinical officer, has a skateboard in her office and a nameplate that exhorts others to Do Epic Stuff, only it doesn’t say “stuff.”
“The ecosystem was nonexistent when we started,” she said of the environment for tech companies. “But we now we’re starting to have the density, which is really exciting.”
Despite its impressive job figures, Phoenix’s growth comes with a wrinkle, which is that the new tech and finance jobs are concentrated in positions that tend to pay less than is typical for these industries, noted Marc Korobkin, an economist with Moody’s Analytics. The average finance job in Phoenix pays about $77,000 a year, compared with about $110,000 nationally, according to Moody’s. The typical tech job pays $80,000 to $85,000, compared with $110,000 to $115,000 nationally.
Yelp, the business-directory and user-review site, is based in San Francisco but has moved hundreds of lower-paid sales and customer-service jobs to the Phoenix area. The company’s California and Arizona offices look similar — cramped cubicles, free candy — but where the San Francisco headquarters have an engineering-heavy work force and the cerebral quiet of headphone-equipped employees staring intently at computer screens, the 1,200-person Scottsdale operation reverberates with the din of sales representatives on phone calls while channeling their stress and ambition into imaginary baseball and golf swings.
The luxury of feeling relatively affluent is what Phoenix is selling to people as well as companies. A typical home in the Phoenix area is valued at about $293,000, below the national median of $306,000, according to Redfin, a national real estate brokerage. In addition to lots of flat and open land, a light regulatory environment makes it easier to build enough homes to meet demand. In the fourth quarter of 2019, builders in Phoenix were on a pace to build three times as many units — 14.6 per 10,000 residents — as the Los Angeles region, according to the Census Bureau.
The state has so much new housing, in so many different places, that it defies a particular type. In downtown Phoenix and in Tempe, home of Arizona State University, there are skyscrapers over light rail and a taste of the urbanist dream. About a mile from Arizona State along the light-rail tracks, Culdesac, a developer based in the Bay Area, is building a car-free development in a region known for sprawl.
At the same time, if you drive 40 miles west to an 8,800-acre planned community called Verrado, you see a more stereotypically Phoenix development. Verrado, which sits amid a rocky, shrub-covered landscape that is being steadily consumed by homes in various shades of tan, is in the town of Buckeye. Buckeye had about 7,000 people in 2000. Now it has 75,000 — along with new schools, new Starbucks cafes, new Taco Bells and homes in every stage of completion.
Unlike the dense living in Tempe, Verrado marks a revival of the exurbs that were hit hardest by the recession. The project’s developer started listing homes in 2004, and sold just over 500 that year. Then the housing boom collapsed, and it sold 87 in its worst year. But Verrado has steadily recovered, and in 2019 had its best year yet, with 602 homes sold.
While downtown-style living tends to attract young people with no children and old people with grown children, Verrado is a place for people in the thick of rearing children, people who think that “as much fun as it was to walk to get a beer, life has changed, and I want a backyard,” said Dan Kelly, the general manager.
With a growth rate second only to Nevada’s, Arizona is expanding its political clout and poised to become more Democratic. Newcomers arriving for cheaper housing and tech jobs are not the only cause of the shift but emblematic of it, said Ruy Teixeira, a senior fellow at the Center for American Progress, a liberal think tank.
The most recent example of the change is Kyrsten Sinema, the first Arizona Democrat elected to the Senate in 30 years, who won by 2.4 percentage points in 2018. (Hillary Clinton lost to Mr. Trump in the state by 3.5 points in 2016.)
“You have white noncollege voters being replaced by a significant white college-educated population,” Mr. Teixeira said. “There is a lower cost of living and relatively dynamic economy, so people are moving there because opportunities are good. And people growing up in the state are staying and becoming more educated. You put those things together and it favors a liberalizing trend.”
Purple is not blue, however. In her short time in the Senate, Ms. Sinema has carved out a reputation as a centrist whose more moderate positions have irked some Democratic colleagues. Then there is Mr. Jordan, the recent arrival from California.
He grew up as a Democrat, and like many Californians who move to Arizona, he initially felt strange in a place where people fly Trump flags and many stores post an open-carry firearm policy. But he also left home for a reason, and has come to wonder about the role of California’s liberal politics in creating the conditions that pushed him out. Now he describes himself as a moderate exhausted by the extreme ends of both parties.
“The gun thing is a little shocking, and I’m definitely a Democrat on social things like gay rights,” he said. “But when I go back to the Bay Area, I hear a lot about taxes and how San Francisco has become a war zone. And I don’t want to bring that with me.”