Pittsburgh vs. Phoenix, pt. 1

Just staying ahead of the wave of Pittsburgh-Phoenix comparisons that will be flowing over the next week, it is worth asking what is there to compare? No matter how you slice it, you would be hard pressed to find two more dissimilar regions in the US. Phoenix may have been the fastest growing region of the country in recent decades if not for most of the 20th century. Pittsburgh, however defined, was not. The question then becomes what is the cause of Phoenix’s growth and our decline. All sorts of things are regularly debated as the factors affecting regional growth. Taxes, infrastructure, human capital and talent, proximity to markets, and weather would be just a short list of what determines the economic competitiveness of a region. I wish I could boil it all down to one reason as many want to do all the time.

Without looking it up, I would bet Phoenix comes in well below Pittsburgh by most measures of tax incidence, whether personal or corporate. Is that the cause for the disparate recent histories of the two regions? Maybe, maybe not. With debate over regionalism and government always popping up here, is it important that the 3.9 million people of Maricopa County are represented by all of 24 municipalities compared to the 130 in Allegheny County with just over 1.2 million residents? Allegheny County is regularly measured as one of the most fragmented local government structures in the nation, Phoenix I am guessing is closer to the other extreme again. Where do you start if trying to draw causality?

Maybe history matters. In most of the century when Pittsburgh was producing ever more iron, coal, coke and steel for a growing nation, the greater Phoenix area resembled the surface of the moon more than anything else. When the Homestead Steelworks alone experienced strikes of tens of thousands of workers in the 19th century, Arizona was barely a territory, Maricopa County had a resident population measured at under 11K total population (barely above 1 person per square mile) and the City of Phoenix proper would have likely fit into Market Square. Makes you wonder what the recent trends for Pittsburgh would be if it could start from scratch and not be anchored by innumerable brownfields and all the other costs and legacies of an industrial past that had to decline from its peak.

Maybe we will dig into the comparison a little more over the next week. Beyond the efficacy of 3-4 defenses that is.


12 Responses to "Pittsburgh vs. Phoenix, pt. 1"

H.O. Blues said... 1/22/2009 12:58 PM

A great run at the surface differences between not only the cities but their respective regions as well. One is a city literally forged from of the geographic and social terrain, the other a city that was painted on a nearly blank canvas by post industrial developers. I would also take a close look at the historic, social and ethnic composition of the areas as the human terrain of the two cities is probably just as varied and just as important. What fun!

Anonymous said... 1/22/2009 4:24 PM

I have a theory.

Phoenix (and Las Vegas, Tampa, the OC, etc.. for that matter) is the poster child for a failing experiment. When post-industrial cities like Pittsburgh went into decline, much the population moved to sunnier climes with burgeoning industries. Mainly, these industries were the business of selling houses to people who want to live in the desert (it’s a dry heat) and not pay much in the way of state and local taxes. On one hand a desert is a great place to build a big city. Land is cheap, cheap, cheap and zoning restrictions, NIMBYism, and site prep are virtually non-factors. It’s easy enough to throw down some blacktop, widen the pipes to the Colorado River and let developers come in and build shiny, new neighborhoods, commercial districts, and so on. Labor is also inexpensive and flows across the border.

But deserts have their own challenges, and if something should come along to ruin the Rube Goldberg Real Estate Perpetual Motion Machine™, those challenges are exacerbated. Phoenix is a Libertarian-minded place. Many of the communities in the Phoenix area have enjoyed an easy tax burden for a long time by cashing in on growth. As long as people keep building and moving in, tax rolls grow and the municipalities can afford police, sewage systems, new schools and so on. The low, low taxes kept ‘em turning dirt for a long time and everybody was happy.

The assumption was that everybody in the country wanted to live in an exburban McMansion and that trend would never change. Gasoline would always be cheap, Seinfeld and Friends wouldn’t show a entire generation of Americans that urban living wasn’t all bad, commuter exhaustion would never be a factor, and what’s a water rights lawyer? I have long suspected that the housing bubble had a real moment of burst, and I suspect it happened in Phoenix or OC or Vegas. A developer clipped the ribbon on a new round of McMansions somewhere and nobody showed up to buy. Or at least not with the same enthusiasm that people had heretofore possessed. The developer found that the houses he built were not going to sell for what he thought and lowered the prices. Pop! Sub Prime mortgage holders please step to the plate to get hit with a pitch, regular mortgage holders, you’re on deck!

Whether or not I’m right about that, Phoenix is now losing population (http://www.azcentral.com/community/phoenix/articles/2009/01/12/20090112phxpopulation0107.html). Bond ratings are (http://phoenix.bizjournals.com/phoenix/othercities/jacksonville/stories/2009/01/19/daily6.html) tanking too. And yet they still need to pay police, maintain all that blacktop (at today’s prices youch!), and perform all the other functions of government. As the tax base shrinks, even if it’s only for a bit, the municipalities are going to have to raise tax rates. And each empty house or shuttered mall begets another it seems. By the time housing prices stabilize in the Phoenix area, there’s going to be a lot of excess housing stock. The days of slash and burn development are likely at an end, or at least on a very long hiatus, so the party isn’t going to start back up again once the economy rebounds. Instead, Phoenix area communities will be maintaining too much infrastructure with too few people to support it, all paying higher taxes to prop up the city-that-was. Sound familiar?

In 10 years they’ll be trying to privatize the parking authority to pay off legacy costs.

Well, probably not, but it’s something to think about.

Bram Reichbaum said... 1/22/2009 6:26 PM

The thing I first thought of is that Pittsburgh is a city that *needs to exist*. It is at a confluence of rivers, and stands at a cultural crossroads of the nation. Even before there was Pittsburgh, *something like* Pittsburgh existed.

Phoenix just kind up randomly up and happened. Sure it grew when it was the It City, but that passes and there's no particular reason for it to stick around.

Anonymous said... 1/23/2009 9:56 AM

Also, "It's a dry heat" only matters so much when it's 106. For me, Pittsburgh's weather is one its selling points. Extreme cold is like a two to four week thing, extreme heat is rare, and you can keep plants alive with very little watering.

Mark Rauterkus said... 1/23/2009 10:49 AM

Dry heat matters even when it is 106F as some need to breathe every minute.

The nice weather of Pgh is what it is -- but it isn't a 'tipping point' in the sales process.

Libertarian minded gets a mention, but only within a larger statement. Humm...

For me, I think AZ with McCain and Keating. Its LA with the beach but not the ocean.

Contrast: Booms. Water. River cities of the region. Gated communities.

Ever been the the biosphere?

BTW, with gated communities, the police demand is reduced. Private security costs increase. But, investment(s) are sheltered to a degree.

Anonymous said... 1/23/2009 11:08 AM

All good points, RG. I'm not the alarmist that James Kunstler is, but I do think that the Southwest in general, and Phoenix in particular, will have big water supply issues in the next 50 years, barring some weird invention by which we can cheaply manufacture water out of the air.

And for all the talk about Pittsburgh's shrinkage and Phoenix's growth, which is all true enough and fair game for discussion, I'd still point out that Pittsburgh is still a very dense city -- 5,500 - 6,000 people per square mile, compared to Phoenix's 3,000. We might be (ok, we ARE) going in two different directions since the 1950s, but people always seem to forget just how dense Pittsburgh is, and just how small it is in terms of square miles. Not that those numbers mean much outside of themselves, but there are still a lot of people squezed pretty tightly into the little slice of land, considering we're a dying city. Among American cities larger than 300,000, we're still in the top 20 interms of density. It may be apropos of nothing, but there ya go.

Anonymous said... 1/23/2009 6:48 PM

Hi there. Good insights. As a metro Phoenix resident and lover of the Sonoran Desert I want to correct you on one thing: The area has never looked like the surface of the moon (at least, not in the last 500 million years). While many folks from greener parts of the country think "wasteland" when they think of a desert, our desert is actually one of the most biologically diverse places on Earth. The Sonoran Desert that hasn't been developed yet is lush, full of color and bounding with life. Also, keep in mind that 500 years before white folks moved in, the hardy Hohokam people lived here for 1,000 years without the benefits of air conditioning, union membership -- or even a spacesuit.

Schultz said... 1/23/2009 10:24 PM

"Phoenix just kind up randomly up and happened. Sure it grew when it was the It City, but that passes and there's no particular reason for it to stick around."

Bram - that is a ridiculous statement. Have you ever visited Phoenix? That area is friggin beautiful. And it didn't "up randomly up" happen, or whatever you were trying to say there. Phoenix came about in a similar manner as Pittsburgh - it just happened about a century later.

Someone mentioned the dry heat. I have golfed in Phoenix in the middle of July. It was 110, very hot, but golfing in the dry heat is much more comfortable than golfing in the humid summers here in Pittsburgh and anywhere I have golfed in the southeastern US.

Anonymous said... 1/25/2009 10:14 PM

I wasn't implying that 'dry heat' isn't an improvement over moist heat. I'd just don't much care for either.

Also, I interpreted Bram's statement "Phoenix just kind up randomly up and happened" a bit differently. I thought Bram's point was that Pittsburgh is where the largest city in Western PA was pretty much bound to be whereas if you re-ran history a hundred times, the largest city in AZ might be 25 or 50 miles away from where Pheonix, just by chance.

Mark Rauterkus said... 1/25/2009 10:24 PM

Re-run history and Wilkinsburg and East Liberty might have blown the socks off of downtown.

West End too -- had it not been 'dry.' (speaking of dry heat, giggle)

Downtown's density is due (in very large measure) to a few waves of land value taxation policy. Each time the tax shifted more to land, new booms followed.

Could happen again too.

Anonymous said... 1/26/2009 9:19 AM


I'm sure that if you re-ran history with different tax policies, Wilkinsburg could be something like a close-in Cranberry and East Liberty could be something like Squirrel Hill, but I very much doubt you'd change the downtown that much. Unless your re-running of history leaves this region unsettled until after the development of the auto, you are going to have the densest development along the river because that was the only way to cheaply transport bulk goods. As other methods of transportation became available, they ran to downtown because there was already so much fixed capital there.

Schultz said... 1/27/2009 7:36 PM

Also, I interpreted Bram's statement "Phoenix just kind up randomly up and happened" a bit differently.

It sounded to me like he was describing Vegas!

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Updated September 2020:

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