Phoenix: The lure of innovation brings thousands of new arrivals a year
This story is part of America's Evolving Cities, a USA TODAY Network project that takes a close look at four regions across the country and their unique paths to success — and how residents have benefited or suffered along the way.
Construction cranes dot the downtown Phoenix skyline, bringing hundreds of new housing units to the urban core of the city where vacant lots stood for years. Arizona State University students fill the coffee shops and streets between classes as self-driving cars pass by.
The energy and attraction of downtown is in stark contrast to the view of two decades ago, when the city center became a ghost town after government workers went home for the day.
Downtown, which didn't even have a full-size grocery store until 2019, now boasts a huge presence from all three public Arizona universities, including a planned medical school. Two professional sports teams call downtown home, and more than 2,000 new apartment units will hit the market in the next year.
The changing tapestry of downtown Phoenix mirrors the growth of the city as a whole, which has added population faster than almost any other large U.S. city in the past decade. In that time, Phoenix surpassed Philadelphia to become the fifth-largest city in the country.
The population is growing, and a burgeoning food and entertainment scene is taking shape. And a willingness to embrace change has made the area a hub for innovation. On average, 280 more people moved to Phoenix than left it every day last year.
They seek more options for food, entertainment, jobs and housing — and demand more of the city's infrastructure.
Homebuilders added 38,310 new housing units in 2024 across Maricopa County, more than any county in the nation, according to census data released in May.
Phoenix has reinvented itself time after time, mostly out of necessity. Developing in a desert requires proactive water planning. More than 100 years ago, Roosevelt Dam, about a two-hour drive northeast of the city, helped tame the Salt River, and the state now also gets more than a third of its water from the Colorado River.
Living in a place where temperatures consistently top 110 degrees can seem impossible to an outsider, and access to places to cool off can be the difference between life and death. It has given Phoenix a reputation elsewhere as an inhospitable place, but there's much more to it.
Aside from the natural obstacles to the city's success, economic devastation from the Great Recession forced Phoenix to embrace new industries and diversify its economy.
It also meant putting the city on the cutting edge of emerging technologies, including some that seem futuristic.
The city, like much of the region, has embraced driverless cars earlier than any other. It has the largest contiguous operating territory in the world for Waymo, the industry leader in autonomous vehicles.
Leaders are already plotting the next step. Phoenix Mayor Kate Gallego said the city and state are working on a plan for advanced aerial transportation, meaning creating locations where aerial vehicles — flying cars — can take off and land. Arizona's first Advanced Air Mobility Summit was held in Scottsdale in 2024, where attendees discussed electric-powered aircraft that could take off and land vertically. The development of such craft would position Phoenix on the cutting edge for transportation advancements.
Relative affordability, year-round sunny weather and outdoor recreation drive many people to move to Phoenix. Residents can enjoy a two-hour drive to see snow in the winter but can sip a drink on a patio nearly all year or hike some of the biggest urban parks in the country without seeing the skyline.
Years of marketing the Phoenix area as a favorable place to do business seems to be paying off. The city's economy, once over-reliant on housing construction and tourism, has grown and diversified, making it more resilient.
The growth of major industries, especially the arrival of Taiwan Semiconductor Manufacturing Co., which is building a $165 billion plant in north Phoenix, has put the state on the map more than ever for international investment. Nearly a quarter of the companies working with local business development authorities are international. That's up from about 10% before 2010, said Chris Camacho, president and CEO of the Greater Phoenix Economic Council.
Development around TSMC near Loop 303 and Interstate 17 will also bring more business and residential growth to the area. A $7 billion development next to the semiconductor campus in its early stages and huge swaths of open desert are moving through the urban planning pipeline.
"The numbers are unheard of," said Greg Vogel, CEO of brokerage Land Advisors Organization. "I'm not aware of anywhere in the world with this much capital being expended" within a few thousand acres, of which TSMC occupies 1,128.
Jeff Patz moved to Phoenix from Florida two years ago to take an engineering job at TSMC.
"I see my future here as I look out the window," he said from the sprawling tech facility.
The 29-year-old enjoys hiking with his dog and wife in the mountain trails in and around the city. He also likes tubing down the Salt River, a major water source for metro Phoenix, and appreciates the Bohemian-style nightlife of a monthly outdoor art fair called First Friday, near downtown.
While new jobs and cutting-edge industries have boosted the economy, some areas of the city have been slower to benefit.
In Maryvale, the west Phoenix neighborhood that comprises the densest of the city's villages and youngest by population, growth and change are happening gradually. The area, which has a majority population of Latino residents, finds itself grappling with cultural and political changes and gentrification.
Desert Sky Mall, a community gathering place in Maryvale, has become known as a hub for Hispanic-owned businesses and specialty stores that cater to the diverse community, which has grown to include African, Southeast Asian, Arabic, and Persian-owned businesses.
"The diversity that this mall has is so valuable," Eva Garcia, the owner of two businesses in the mall, said.
The South Central Extension of the Valley Metro light rail system is expected to bring billions of dollars in investment to south Phoenix, an area long overlooked by planners and developers. It has quickly become one of the fastest-growing areas for new housing.
After a history of redlining and housing discrimination in the southern stretches of the city, it remained one of the most affordable neighborhoods in Phoenix. But that, too, is changing as new housing developments push up prices.
'With light rail, there's definitely some opportunity for change when it comes to housing,' said Victor Vidales, a real estate agent who lives in south Phoenix and is a member of the community group SoPho Convening. 'We are missing the middle housing, particularly for multigenerational families, but there's still a lot of vacant land available.'
Growth in metro Phoenix has felt exponential, and some have noticed the growing pains that come with more people on the roads and new development in neighborhoods. Other challenges, like maintaining the availability of water and power, and educational attainment remain ongoing challenges.
In north Phoenix near Desert Ridge, residents have had to grapple with the approval of an unpopular commercial development, pitched as a way to expand access to groceries and restaurants in an area that has seen rapid residential growth.
Customers of Arizona Public Service, Arizona's largest power provider, set power usage records in both 2023 and 2024. The growing demand highlights the need for a diversified, robust power supply, while prolonged drought and a growing population have meant water planning is paramount to sustaining development.
Keeping cool is a matter of life and death. According to Maricopa County, 602 people died from heat-related issues in 2024, and eight more deaths are under investigation. That is more than 10 times the number of people who died from heat-related issues in 2014.
Securing water and having the infrastructure to supply it will be crucial in determining how the city will develop.
'If you talk to a water expert and they tell you this is not a unique, unsettled moment (for water) in history in central Arizona, they're lying to you,' Cynthia Campbell, director of policy innovation for the Water Innovation Institute at Arizona State University, said. 'It is a slightly unsettled time. But we're not in crisis. We're not running out of water.'
And maintaining a qualified workforce to fill the jobs coming to Arizona also stands as a possible barrier to growth.
As the city continues to attract top companies, the state's education system has come to a crossroads.
Experts warn that if Arizona does not see more people going to college or trade school, Phoenix could expect less future economic growth than it has grown used to. Fewer than half of all Arizonans have some level of higher education, whether that be a college degree or professional certificate.
That could have serious implications for Arizona's and Phoenix's economy, said Rich Nickel, who serves as the president of Education Forward Arizona, a local education advocacy group. If the state does not see more students heading to college or trade programs soon, Phoenix's economy could lose momentum.
'Phoenix is kind of in a once-in-a-lifetime situation,' Nickel said.
Those barriers, some leaders and economic development professionals say, will need to be addressed, and quickly, to keep up the fast clip of growth the region has seen in the past decade.
'Continuing to develop the infrastructure that will accommodate the region's population growth and increase in advanced manufacturing will be pivotal to the next stage of the economy,' Camacho said. 'Ensuring utilities and the power grid remain modernized, continuing our history of smart water usage and conservation, and expanding our transportation corridors will allow greater Phoenix to reach its potential as an international center for advanced technology and manufacturing.'
Corina Vanek covers development for The Arizona Republic. Reach her at cvanek@arizonarepublic.com. Follow her on X @CorinaVanek.
This article originally appeared on Arizona Republic: Phoenix: The lure of innovation brings thousands of new arrivals
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Newsweek
3 hours ago
- Newsweek
California Faces Housing Crisis: 'No One Is Buying Homes'
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. After four consecutive months of year-over-year inventory increases, California is now solidly a buyer's market, which means the supply of homes is greater than the demand for properties in the state. That is happening in part because, as real estate analyst Nick Gerli put it, "no one is buying homes in California." Home sales in the Golden State are hovering just below the lows of the Great Recession, according to a recent report by as sky-high prices and elevated mortgage rates keep buyers on the sidelines of the market. Why It Matters The California housing market experienced great changes during the pandemic, when the rise of remote work allowed many homeowners to relocate from metropolises—such as San Francisco and Los Angeles—to smaller nearby towns or leave the state entirely. While the state saw a slight dip in home prices in early to mid-2020 compared to a year earlier, home prices quickly rebounded and have continued rising steadily until now. Historically high home prices are now playing a crucial role in keeping demand low in the state, together with mortgage rates still hovering just below the 7 percent mark and growing economic uncertainty linked to the effects of President Donald Trump's tariffs. A general view of a home for sale in a residential neighborhood in San Jose, California, on August 15, 2024. A general view of a home for sale in a residential neighborhood in San Jose, California, on August 15, To Know According to data from there were 73,160 active listings in California in May, the highest number since October 2019—before the pandemic homebuying frenzy further shrunk supply in the state. "The rate that housing inventory has been rising for the state is on par with that of the nation. At the national level, inventory of homes for sale rose more than 30 percent year over year in May, which is in line with the double-digit increase for the state of California," Oscar Wei, the deputy chief economist at the California Association of Realtors, told Newsweek. "Active listings typically increase during this time of the year as the period from April to August is considered the spring homebuying season. Homes are being bought during this time frame as many buyers want to settle down before schools start. As such, active listings usually increase month over month from March to April and from April to May," he said. "The growth pace in active listings is slowing down, however, and the level of supply could reach a plateau sometime in June." Several California cities were also among the 50 most populous metropolitan areas in the U.S. with the biggest imbalances between sellers and buyers in April, according to a recent Redfin study. These included Riverside (61.3 percent difference), Sacramento (44.9 percent), Los Angeles (44.8 percent), Anaheim (38.7 percent) and Oakland (36.2 percent). This should be great news for prospective homebuyers in the state who, as in the rest of the country, have been struggling with limited inventory for the past few years. But according to the data, buyers aren't showing up for these listings. The state reported about 25,100 home sales in April—up 1.6 percent from a year earlier but "down 20 percent from the long-term average and 40 percent below the pandemic peak," according to Gerli, the CEO and founder of the real estate platform Reventure App. "Economic uncertainty and elevated mortgage rates, which make costs of borrowing high, are primary factors that keep housing demand/home sales at low levels in recent months," Wei said, adding, "Insurance availability and affordability are also having a negative effect on home sales." Gerli wrote on X, "This crisis in homebuyer demand is now causing home prices to drop." Last month, according to data from Reventure App, home values in California fell by 0.42 percent from March, the fourth biggest decline in the U.S. "It was the fourth straight month where values declined," Gerli said. "The reason prices are now dropping is because the low demand is being combined with a rise in listings," the real estate analyst added. "Inventory had been low in California for much of the last couple years, but now it's spiking." Despite the recent downward pressure on prices in California, the cost of buying a home remains high—much more than many can afford. Home values might be dropping on a monthly basis, but they are still rising year over year. In April, the average home value of a typical California home was $796,255, according to up 1.3 percent from a year earlier. The median sale price of a California home was $854,700 in the same month, up 0.2 percent from a year earlier, according to Redfin. Five years earlier, in April 2020, a typical California home could still be bought for $571,000. The numbers of homes sold with a price cut—at 34.8 percent of all sales—are on the rise, up 10.2 from a year earlier. However, the numbers of homes sold above list price, at 40.3 percent, is decreasing and was down by 9.7 percent in April year over year. What People Are Saying Oscar Wei, the deputy chief economist at the California Association of Realtors, told Newsweek: "Buyers are waiting for the costs of homeownership to come down. That could mean lower mortgage rates or lower home prices. Mortgage rates should slowly decline and will likely moderate slightly by the end of the year." He added: "The market may have already seen the peak price for the year and could soften in the next few months. Buyers could also be waiting for some clarity on the market direction, as consumers remain concerned about how tariffs and the ongoing trade tensions could affect the economy and their personal finances." Hannah Jones, a senior economic research analyst at said in a recent report: "Home price growth accelerated in California during the early days of the [COVID-19] pandemic, driving the state's median listing price to new heights. High home prices and rising mortgage rates put homeownership out of reach for many would-be buyers." Real estate analyst Wolf Richter wrote in a recent report: "The problem is demand in California. It has essentially collapsed. New listings aren't that high. But because the inventory of homes for sale doesn't sell, and new listings are added to it, the total piled up." Real estate analyst Lance Lambert wrote in a recent report: "More California housing markets are climbing out of that inventory deficit. And if the current trajectory holds, California could soon be out of its Pandemic Housing Boom era inventory hole." Redfin Senior Economist Asad Khan said in a recent news release: "The balance of power in the U.S. housing market has shifted toward buyers, but a lot of sellers have yet to see or accept the writing on the wall. Many are still holding out hope that their home is the exception and will fetch top dollar. "But as sellers see their homes sit longer on the market and notice fewer buyers coming through on tour, more of them will realize that the market has adjusted and reset their expectations accordingly." What Happens Next Experts now expect home prices to dip slightly across the country by the end of the year, including in parts of California. Zillow expects prices to fall in 31 cities in the state, including San Francisco (projected -5.2 percent), San Jose (-3.8 percent), Sacramento (-3 percent), Los Angeles (-1.2 percent) and San Diego (-0.7 percent). According to Wei, home prices should begin to come down from the record high set in April as we enter the second half of the year. "Seasonality will play a role in the price moderation, and an increase in housing supply will also relieve some upward price pressure," he said. "We expect price crops across the state to be mild but the changes between months could appear volatile in some areas because of their low number of observations. In general, we still expect a mild single-digit year-over-year increase for the year as a whole for the state and most regions."
CNN
4 hours ago
- CNN
Musk fires up the robotaxi hype machine as his MAGA spotlight dims
Elon Musk has two key strengths: a bottomless well of money and an unmatched ability to hypnotize Wall Street with promises of a whizz-bang technological future. He's starting to run into the limits of both. On the hypnosis front, Musk is busy hyping the tentative launch on June 22 of Tesla's long-awaited robotaxi pilot program in Austin, Texas. Tentative, Musk said, because the company is being 'super paranoid about safety.' When even Musk says the date is iffy, do not hold your breath. The guy can deliver a game-changing EV, to be sure, but many of his more ambitious projects are notoriously behind schedule. In the meantime, Alphabet went ahead and began a taxi service using driverless Waymo cars in 2020, and now provides 250,000 paid rides a week in San Francisco, LA, Phoenix and Austin. (It is still a money-losing operation, sure, but the losses are essentially a rounding error for the tech behemoth.) If playing catch-up on robotaxis were Tesla's only problem, that'd still be a tall order. But the company is trying to usher in the future of transportation at the same time it is doing damage control on its reputation. What began as a kind of aspirational luxury car brand popular among well-to-do liberals has, for many, become synonymous with its erratic, authoritarian-adjacent CEO. Musk's MAGA turn wasn't the only reason Tesla sales started tanking globally, but it certainly didn't help. Chinese competitors have been eating Tesla's lunch in key markets around the world. The Cybertruck is — relative to Musk's original high-flying predictions — a flop, and the rest of the company's lineup is dated. Some disappointed drivers say they can't offload their Teslas because demand and resale prices have fallen so dramatically. In sum: Tesla, whose stock (TSLA) has tumbled 30% since its all-time high in December, needs its robotaxi event, whenever it happens, to really knock investors' socks off. Of course, in the past, Musk has been known to lean into the flash and somewhat gloss over the substance. Last fall, Tesla shares fell 9% the day after its 'Cybercab' unveiling, which offered few details about how Tesla plans to improve its still-unfinished 'Full Self-Driving' tech and featured robot staff that, unbeknownst to people who attended, were being operated remotely by humans. The Austin event will be a 'proof of concept exercise, not a rollout or a testing of a commercial asset for sale,' GLJ Research analyst and prominent Tesla critic Gordon Johnson said in a note this week. Part of the Musk mystique has to do with just how unfathomably rich he is — like, how could he possibly fail with all that wealth? And to be sure, Musk's money affords him a boundless budget to buy just about anything and sue just about anyone, in perpetuity. But Musk's foray into politics has shown that even Muskian wealth has its limits when Elon Musk is involved. For example, Musk dropped nearly $300 million on campaign spending for Donald Trump and other Republicans last year, only to blow up his relationship with the president a few months later with a series of outbursts on social media. He shelled out $44 billion on Twitter with the intent of building it into some kind of 'everything app' — an internet hub for commerce and a global town hall. The platform saw an exodus of users and advertisers as Musk took down speech guardrails, and it now more closely resembles the notorious message board 4chan. Musk's $20 million gamble on a conservative candidate for the Wisconsin Supreme Court was seen as a test of his newfound political power. But that one also backfired, putting Musk and his unpopular DOGE layoffs at the center of the narrative and enabling the liberal candidate to secure a 10-point victory. Bottom line: After torching Tesla's brand with his MAGA turn, Musk went and did something even more unthinkable and turned on Trump, straining (if not dooming) his status as 'first buddy.' Musk is now in damage control mode, and he's reviving an old playbook, revving up the self-driving hype machine, for a bit of redemption. 'He's got a problem,' President Trump told CNN's Dana Bash last week. 'The poor guy's got a problem.'
Yahoo
4 hours ago
- Yahoo
Robotaxi wars: How Waymo got the edge on the competition, and Tesla (so far)
'We are being super paranoid about safety." That's what Tesla CEO Elon Musk said after revealing the company's robotaxi test would start on June 22, later than expected, adding that the date could 'shift' beyond that. Meanwhile, betting site Polymarket lists only a 30% chance that Tesla (TSLA) launches the service before July, highlighting Musk's rosy predictions on self-driving that have been constantly pushed back. While Tesla is on the verge of starting a new chapter for the company, Alphabet's (GOOG) Waymo has been quietly racking up mile after mile, trip after trip, providing actual paid robotaxi rides to customers in San Francisco, Phoenix, Los Angeles, and Austin — where Tesla's test will begin. At stake is a huge opportunity for companies like Waymo, Tesla, and others. Goldman analyst Mark Delaney estimates the market for traditional ride-hailing in the US is worth approximately $58 billion currently, but could be worth more than $330 billion by 2030, with robotaxi-type services pushing the industry forward and reducing costs by — among other factors —not requiring a human driver. Waymo has an early lead, and it seems a big one. Rivals like Argo AI and GM-backed Cruise are gone, leaving only smaller players like Zoox (backed by Amazon), China's Pony AI (PONY) and WeRide (WRD), and of course Tesla. Waymo (before it was even called that) started off as an in-house startup as part of Google's X initiative way back in 2009. After some testing and securing of permits, the project officially became Waymo in 2016, and it started testing its Pacifica hybrid vans kitted out with cameras, LIDAR laser sensors, and radar. In 2018 Waymo and Jaguar paired up, using the British automaker's I-Pace EV for its testing; these are the vehicles most users are accustomed to seeing. Waymo's combination of vision, radar, and LIDAR, which the company calls its 'multimodal' approach, has the company claiming it has the best, and safest, robotaxi solution. Since 2020, anyone in a service area can download the Waymo app and hail a fully autonomous car. Waymo says it has the most robotaxi miles driven and that the company performs around 250,000 trips a week. A Waymo spokesperson said that the company has not yet seen a vision-only system that can achieve the levels of safety its current system has achieved, asserting that multiple sensors with overlapping fields of view are the best solution. Experts tend to agree. 'Waymo is undoubtedly the leader in autonomous driving technology, with their self-driving software (SDS) being widely regarded as best in class,' said University of San Francisco engineering professor William Riggs, an expert in autonomous technology. 'They have been around the longest, had patient capital and have the most miles on the road proving that self-driving tech works.' Riggs believes Waymo's software strategy combined with its diversified sensor suite, along with its manufacturer partnerships such as Chrysler, Hyundai, Zeekr, and Toyota, allowed Waymo to maintain a strong presence in the market and adapt to different vehicle platforms. Autonomous expert Katie Driggs-Campbell of University of Illinois' Grainger College of Engineering agrees. 'Initially, I believe their strength came from the computer vision/learning and compute expertise from Google,' Driggs-Campbell said, noting that Waymo has now 'blended real-world experience, recorded data, and simulation [generated] data to form a reliable system.' Waymo also touts its safety record, as well as how open it's been with data. 'We have an incredibly rigorous safety framework in place, and our safety record speaks for itself,' Waymo's spokesperson said, adding that the company has been voluntarily sharing safety performance data with the public, which goes beyond regulatory requirements. Waymo's approach could not be more different from Tesla's, and that has contributed to the dominant lead it sees currently. Tesla did not immediately respond to Yahoo Finance when seeking comment. But per Musk biographer Walter Isaacson, Musk was enamored with Tesla's vision-only, neural network-powered self-driving system when it was presented to him. He deemed it superior to Tesla's prior system, which ran on millions of lines of code using a rules-based system fed by data coming from radar and LIDAR sensors. Tesla's current FSD (full self-driving) and robotaxi software use only a vision-based system powered by a neural network 'brain' that is constantly training itself using videos collected by millions of Tesla vehicles. (And as opposed to Waymo, Tesla has reportedly asked the city of Austin to block release of safety records related to its robotaxi launch.) While Waymo holds a big early lead, what could stop the pioneer from growing more could be its operations and manufacturing ability. Riggs believes building vehicles at scale remains a significant hurdle for Waymo. 'Currently, they operate between 700 and 1,000 vehicles in their major markets and are producing roughly 1,500 vehicles annually. This relatively modest production volume could become a bottleneck for scaling their operations further,' he said. The other challenge for startups like Waymo in general versus Tesla is that their costs per vehicle are higher. Waymo's self-driving tech and sensors reportedly cost $100,000 plus the cost of the vehicle itself (for example, the Jaguar I-Pace retails for $73,875 in the US). While some of those costs have come down, scaling to new cities and providing enough vehicles to take on Uber, for example, will require more than the 1,500 vehicles currently produced a year. Tesla, meanwhile, has the ability to produce 2 million or more EVs a year, which include the hardware necessary for its FSD and robotaxi software. Tesla also has millions of vehicles on the road that could be converted for robotaxi use, though that would require the company's Hardware 4 autopilot software, which only started rolling out in early 2023. 'AI runs off of data. Waymo is trying to close that data gap with more sensors per vehicle; Tesla is looking to win with more vehicles with targeted data specific to their vision-only approach,' said Ken Johnston, vice president of data and analytics at tech consulting firm Envorso and former exec at Ford and Microsoft. 'Companies like BYD and Tesla also cannot be ruled out, as they continue to innovate and expand their capabilities in this space,' Riggs added. Xiaomi is also testing autonomous driving in China, but the company has suffered from safety issues in early trials. Johnson is bullish on Tesla's robotaxi offering, but the company faces a big challenge in surviving its safety test. Uber's self-driving unit and GM's Cruise could not overcome high-profile accidents. Testing the service without any accidents in a semi-urban environment is not easy. And unlike Waymo, Tesla is under federal investigation for its autonomous software. It also still needs to provide NHTSA with answers to how it plans to roll out its robotaxi program. Meanwhile, Waymo is plugging along, adding more cities to its list of current operations, with Atlanta, Miami, and Washington, D.C., coming online in 2026. Being backed by Alphabet helps too, giving Waymo capital runway for growth, investment, and long-term community outreach. Waymo's technological lead and strong backing from Alphabet clearly have the service in pole position. But this race is far from over. Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram. Sign in to access your portfolio
