Visitor numbers, home prices and revenue from tourism are on the rise, while the disparity between median incomes and housing costs continues to widen, according to a new report compiled by the Moab City Manager’s Office.
The economic report for the third quarter of 2015 provides details on the economic health of the city and county with statistics on job growth, real estate, new construction, new businesses, area visitation and traffic trends.
Moab City Manager Rebecca Davidson said the report is provided for anyone interested in economic indicators in the Moab region who doesn’t have time to research each of these areas of information.
Davidson said her office compiled the report from multiple sources. In the future, she plans to release a new report each quarter in order to keep tabs on the pulse of the economy, as well as to identify challenges the community faces.
“We clearly have the idea that tourism is rising,” she said. “But we still have work to do on affordable housing.”
The latest report notes record-breaking numbers at Arches and Canyonlands national parks, as well as increased numbers of traffic on Main Street, which doubles as U.S. Highway 191.
“Highway figures alone show an increase in visitation,” Davidson said.
The report also tallies job losses and gains. According to the report, more than 200 jobs in leisure and hospitality services were added in 2015, up from 57 in the third quarter of the previous year. By contrast, employment in the fields of mining, construction and government saw combined losses of 53 jobs.
Utah Department of Workforce Services senior economist Mark Knold said that job losses in oil, gas and mining were due to the drop in oil prices and mostly revolved around drilling, production and support for oil wells.
Losses occurred in some of the highest-paying jobs, especially mining, where salaries average $5,800 a month. Jobs in the leisure and hospitality services average around $1,600 a month and are often seasonal in nature, which contributes to Grand County’s higher-than-average unemployment rate of 5.6 percent, according to Knold.
Knold said that employment levels in Grand County can fluctuate by as much as 1,500 between mid-summer and mid-winter, or between 3.5 percent and 18 percent respectively.
“This powerful unemployment ebb and flow can be smoothed out by seasonally adjusting the unemployment rate, but the end result is that even then, the county’s unemployment rate is higher … because of the strong seasonal composition of the Grand County economy,” Knold said. “Its winters have built-in high levels of unemployment.”
Grand County Community Development Director Zacharia Levine said that he commends Davidson for initiating a quarterly economic reporting system, and that it could serve as an effective tool for intra-departmental communication between the city and the county.
“Tracking economic development over time is important, and quarterly or half-yearly reports will help us keep an eye on how the local economy is evolving,” he said.
Levine said the report offers a mixed bag of indicators, specifically with regard to residential and commercial construction values, number of homes sold and the overall cost of housing.
“The number of single family homes bought and sold is up significantly over 2014, but these numbers say nothing about who is selling and who is buying,” Levine said. “Prices are skyrocketing, which leads me to believe that a fair number of homes are transferring into the hands of buyers outside of Moab.”
Levine pointed out that there is a huge gap between the median/ average home price and the buying power of a median/ average wage earner in Grand County. The report lists a median home price of $290,000 and an average list price of $351,000 in May 2015.
“The average income for a family of four in Grand County is $45,888 a year,” Levine said. “This puts them in the range of about a $155,000 house.”
Although commercial construction values were roughly the same in 2014 and 2015, Levine said that one hotel – the Homewood Suites by Hilton that is currently under construction on Main Street – accounts for most of the more than $17 million in commercial building permit valuations this year.
Another commercial building permit has been issued for Entrada Subdivision on 400 North near 500 West. This development has 48 overnight-stay units.
A final development is the Valley View Subdivision, which will provide residential housing along the Mill Creek Parkway near the Cinema Court apartments.
Moab Area Travel Council Director Elaine Gizler said the additional visitor rooms will help the county increase revenue through the Transient Room Tax (TRT). TRT revenues by the end of October 2015 were up by nearly $700,000 from the same time in 2013, and showed an increase of more than $150,000 over 2014 levels.
TRT funding is a 4.25 percent tax assessed on all lodging. Two-thirds of the first 3 percent are mandated to be spent on continued promotion and maintenance of the Moab Area Travel Council. The rest of the TRT money goes to county departments that are eligible to receive it under Utah statutes.
“Based on the current trend this year, TRT revenue will likely contribute more than $2 million to the county’s general fund,” Gizler said.
Grand County Council vice-chair Chris Baird said that TRT funding has relieved some of the tension on the general fund. Moreover, he said, the council has been able to up the county’s contribution to the development of a Utah State University-Moab campus, which he sees as key to the community’s economic diversification.
“Experimentally, we also set aside some TRT funding for an affordable housing mitigation fund,” he said. “We’re not sure yet if we can legally use TRT funding for affordable housing, but it is currently being reviewed by the county attorney.”
Baird said that the county is also working to revamp the land use code in 2016 to reduce barriers to affordable housing, but that government was never intended to be a land developer.
“If the affordable housing issue is to be solved, we’ll need the private sector to get some affordable housing built,” he said.
Baird said that while growth in tourism is strong, and that TRT revenue has relieved tension on the general fund, the city and county are beginning to experience capacity issues.
“Traffic, crowding, sewer and housing issues are lagging behind the boom of hotels and other tourist-related businesses,” Baird said. “We’re at a point where I believe we will begin to see diminishing returns – both economically and in quality of life – if we don’t begin to round out the community and establish a better way of accommodating growth in tourism, while also facilitating some diversity.”
Data show strong growth, but wages fail to keep pace with housing costs
Traffic, crowding, sewer and housing issues are lagging behind the boom of hotels and other tourist related businesses … We’re at a point where I believe we will begin to see diminishing returns – both economically and in quality of life – if we don’t begin to round out the community and establish a better way of accommodating growth in tourism, while also facilitating some diversity.