Metropolitan Las Vegas Challenges and Opportunities

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1 Metropolitan Las Vegas Challenges and Opportunities Nevada Vision Stakeholder Group Mark Muro February 11, 2010

2 Why Brookings Mountain West cares Challenges and emerging opportunities

3 One reason is growth Metro Las Vegas grew by 17 percent between 2000 and 2007 (or 2.5 percent a year!) Population growth by county, 2000 to 2007 More than 10 percent decline Zero to 10 percent decline 0.01 to 10 percent increase to 20 percent increase More than 20 percent increase

4 One reason is growth Since then, however, growth has slowed to precipitously and for now has turned negative 80,000 60,000 40,000 20,000 Metro Las Vegas will likely record a net loss of nearly 18,000 people this year 0-20,000 Source: U.S. Census Bureau Population Estimates data and metropolitan Las Vegas estimates for 2009 from Applied Analysis

5 Another is the invention here in the Mountain region of new urban forms

6 And we re here because you re at ground zero of the world economic crisis

7 In this regard, there is growing consensus the nation s economies need to reposition The rebuilt American economy must be more export-oriented and less consumptionoriented -Lawrence Summers, Director, National Economic Council Getty Images

8 And indeed, consumption is down nationally and the savings rate is rising Personal consumption expenditures Savings rate Source: Bureau of Economic Analysis, 1947 Q Q1

9 And yet, this is problematic given Vegas and so Nevada s hyper-dependency on consumption 60% 50% 53% 46% Share of metro private sector GDP from food, drinking, leisure, hospitality, construction, and real estate 40% 30% 20% 38% 34% 26% 25% Metro average (27%) 22% 21% 17% 10% 0% Source: Bureau of Economic Analysis

10 In fact, Las Vegas exports very few hard goods beyond consumption Value of exported goods as a share of gross metropolitan product, % 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 6.8% 10.0% 2.8% 1.1% 6.1% 8.9% Metro average 2.5% Source: International Trade Administration and the Bureau of Economic Analysis

11 All of which means:?

12 Why Brookings Mountain West cares Challenges and emerging opportunities

13 To help places assess their standing, we have developed a Blueprint for American Prosperity

14 The Blueprint is a deep-going prosperity analysis framework and federal policy agenda for metros

15 According to the Blueprint, true prosperity depends on achieving three types of growth Productive growth that boosts innovation and productivity and so generates quality jobs and rising incomes Inclusive growth that fosters a strong middle class by addressing the training and education needs of an increasingly diverse population Sustainable growth that promotes sensible urban form, reduces resource consumption and emissions, and protects the environment

16 To achieve these goals, the nation must leverage four key assets and improve regional governance Infrastructure Innovation Human Capital Sustainable, Quality Places + Improved governance networks

17 So how is Las Vegas doing?

18 Vegas faces serious challenges but it also has momentum Infrastructure Innovation Sustainable, Quality Places

19 Like the other Mountain metros, greater Las Vegas is underserved by interstates Las Vegas and Phoenix are the largest two adjacent metros not served by an interstate highway I-15 linking Las Vegas and LA offers only two lanes each direction in some places Source: Federal Highway Administration

20 Greater Las Vegas and the rest of the megas are also undersupplied with intercity rail The lack of rail service between Las Vegas and cities such as Los Angeles and Phoenix results in long travel times on strained highways

21 And yet, Mountain Megas has helped reenergize discussions of I-11 Source: Maricopa Association of Governments

22 A high speed rail link with southern California is now in the mix Source: U.S. Department of Transportation

23 And McCarran International Airport remains a world class asset The hub ranked as America s 6th busiest airport in 2008, just behind fifth-place Denver and ahead of 10th-place Phoenix Source: Airports Council International

24 Challenges Infrastructure Innovation Sustainable, Quality Places

25 R&D is a critical driver of innovation and productivity but Vegas conducts little of it Top 100 Metro Average: 0.43% Share of total employment in R&D, % Denver- Aurora, CO 0.13% Las Vegas- Paradise, NV 0.07% Phoenix-Mesa- Scottsdale, AZ 0.15% Salt Lake City, UT 0.12% Tucson, AZ Source: Analysis of 2005 Census data by Ned Hill

26 Patenting rates remain low U.S. average (33.0) San Jose CA Albuquerque Colorado Springs Denver Las Vegas Phoenix Salt Lake City Tucson Utility patents by city per 100,000 people per year, Source: U.S. Trade & Patent Office

27 Partly as a result Las Vegas remains pretty weak in critical green export activities Percent green exports 2.0% 1.6% 1.2% 0.8% 0.4% 0.0% Green Export/GDP (Left) (U.S. average: 2%) 10% 7% 7% 5% 6% 5% 6% 0.10% Green Jobs/All Jobs (Right) (U.S. average: 6%) 12% 10% 8% 6% 4% 2% 0% Percent green jobs Source: Brookings analysis of 2006 data from County Business Patterns and U.S. Census Foreign Trade Office. Green data are from the Michigan Department of Energy, Labor, and Economic Growth

28 And yet, Las Vegas productivity continues to outstrip most regional competitors $120,000 Denver $100,000 $80,000 $60,000 Metro average Las Vegas Phoenix Tucson Colorado Springs Albuquerque $40,000 $20,000 Salt Lake City $0 Source: Gross Metropolitan Product data from Moody s Economy.com

29 The convening-hospitality-gaming sector remains a world-class source of export income and innovation

30 And natural assets, focus, and convening power are building new sectors

31 Challenges Infrastructure Innovation Sustainable, Quality Places

32 Climate change has heightened water supply questions Source: U.S. Bureau of Reclamation

33 And while natural growth constraints have fueled relatively dense development, policy choices have left the region auto-dependent and poorly linked

34 And yet, a strong, dense job core represents an important starting point Ninety percent of Las Vegas area jobs are located within 10 miles of the city center Source: Elizabeth Kneebone (Brookings, 2009)

35 Radical new urban design is beginning to retrofit the autoscape

36 Huge strides are being made on other aspects of sustainability, such as water Southern Nevada Water Authority per capita gallons of water use per day Source: Southern Nevada Water Authority, Water Resource Plan 2009

37 And the region has shifted faster, and farther, toward renewables than anywhere 8% 7% 6% Share of total energy consumption from renewables 5% 4% 3% Nevada California 2% 1% 0% % U.S. Source: Energy Information Administration

38 Partly as a result, Las Vegas s carbon footprint remains below the national and regional average Million metric tons of carbon emitted per capita, U.S. metro average: Colorado Springs Denver- Aurora Las Vegas- Paradise Phoenix- Mesa- Scottsdale Salt Lake City Tucson Source: Shrinking the Carbon Footprint of Metropolitan America (Brookings, 2008)

39 In short, Las Vegas faces the future with significant promise if it uses its time well

40 For More Information Mark Muro Washington Director, Brookings Mountain West Fellow and Policy Director, Brookings Institution (202)