Moving West: But not very far, and not very fast.

Moving West: But not very far, and not very fast.

By Rob Jafek, Principal | Boomerang Capital Partners, LLC

Last month, we looked at some of the ways Phoenix is developing in the article "There Is More Than One Phoenix."That concluded “Phoenix is not one bet, and it really never has been. There are several, and right now they are moving in different directions.”I got to wondering more about that and spent a bit of time out west. Driving to and through Buckeye, it feels obvious that the center of Phoenix is moving west. Massive master-planned communities, industrial projects, logistics corridors, and freeway expansion create the sense that the Valley’s future now lies beyond Loop 303. At the same time, north Phoenix has its own gravitational pull. TSMC and the semiconductor ecosystem forming around it have become one of the most important economic stories in Arizona. Meanwhile, the Southeast Valley continues to add housing and employment at a scale that would define most metropolitan areas on its own. So, where is Phoenix actually going? And when?

One useful way to think about the question is through the concept of a centroid. A centroid is essentially a weighted center of gravity. If you plotted every housing unit in the Phoenix metropolitan area on a map and weighted each location by the number of homes there, you could calculate the mathematical “center” of the metro. That center shifts over time as development occurs.

The common assumption is that Phoenix’s centroid must be moving rapidly west because the most visible growth stories today are well west of the historic Phoenix-Scottsdale-Tempe core. But when I modeled housing-weighted centroids over time, the surprising result was how little the center actually moved. The metro expanded dramatically, but the centroid moves very little (currently right about 32nd and Indian School)

Why doesn’t the centroid move? Metropolitan areas accumulate housing stock slowly over decades. New development matters, but so do the millions of existing homes already spread across central Phoenix, Mesa, Tempe, Scottsdale, Chandler, Glendale, and the rest of the Valley. Even very large projects take time to have a material impact on the math. Teravalis may eventually reshape the western edge of the metro, but a decades-long project does not suddenly outweigh the accumulated housing stock of an established metropolitan area. And the density matters.Verrado way out west may have 12,000 units going in, but that’s about what Scottsdale, Tempe and Phoenix will collectively add over the same period. And Teravalis certainly pulls the centroid west, but only by a few miles; the core remains the core.

The reason Phoenix still feels like it is moving west is that people experience the margin of development, not the cumulative stock. The visible frontier of growth today is undeniably westward. But at the same time, the Southeast Valley never stopped growing. Mesa, Chandler, Gilbert, and Queen Creek added enormous amounts of housing over the last three decades. That eastern and southeastern growth offset much of the westward pull.

That shift has consequences. Phoenix is likely signing up for more traffic, longer trip distances, and more suburb-to-suburb commuting patterns. Housing can be built quickly. Employment ecosystems develop more slowly, and infrastructure often lags both. That creates long transition periods where rooftops arrive first, jobs follow later, and transportation systems struggle to catch up.

At the same time, there is a positive side to this evolution. Phoenix is no longer dependent on a single employment corridor or one dominant economic center. Its metropolitan structure has broadened substantially over the last thirty years. The next phase of growth will likely include continued outward expansion, but also significant redevelopment and infill. Aging retail centers, older office properties, and underutilized corridors across the urban core will increasingly become redevelopment opportunities. The main outlines of the metro are probably already in place. What happens next is less about Phoenix moving in one direction and more about a large metropolitan area learning how to function as a mature network of interconnected centers. And much of the outline is already filled out.