Like the East Valley, Ahwatukee is teeming with prosperity, according to a recent economic analysis of ZIP codes across the country – though that affluence is not evenly distributed throughout the region.
The Economic Innovation Group, a bipartisan public policy organization, recently released “The 2017 Distressed Communities Index,” which analyzes a range of economic factors in communities across the country and ranks ZIP codes and cities using a cumulative distress score.
Ahwatukee ZIP codes ranked well in the study as 85044, 85045 and 85048 are listed as some of the most prosperous in Phoenix. The ZIP code 85045 is the most prosperous in Phoenix with a distress score of just 0.1, according to the study.
The poverty rates in all three Ahwatukee ZIP codes are below 7 percent and housing vacancies in the community are similarly low.
Ahwatukee also benefits from an educated workforce with high incomes as the median income in 85044, 85045 and 85048 are between 139 percent and 239 percent of the state median income.
The factors the group took in to account include poverty rate, median income ratio, percentage of the population over 25 without a high school diploma, and percentage of adults between 25 and 64 not working.
It also looks at community-based factors like housing vacancy rate and the percent change in the number of jobs and businesses in the community between 2011 and 2015.
“The big dividing line at the city level tends to be an old and new question,” said John Lettieri, EIG co-founder and senior director for policy and strategy. “The places that are newer and faster growing tend to be more prosperous…the older, slower growing cities tend to be at the lower end of the prosperous spectrum.”
EIG then classifies communities as prosperous, comfortable, mid-tier, at-risk or distressed based on the distress score.
Prosperity in ZIP codes tends to coincide with active business growth.
“At the community level, (we are looking at whether) places are seeing business growth or business decline,” Lettieri said. “At the center of this question is do you have growth or decline in your stock of businesses.”
ZIP code 85045 saw businesses in the community increase by over 24 percent between 2011 and 2015. That was by far the largest growth in the area, though 85044 (4.4 percent) and 85048 (8.5 percent) also showed growth.
The increased business presence coincided with employment growth as 85045 saw employment jump 32.7 percent during the same time period. Employment in 85044 and 85048 grew by 20.8 percent and 3.7 percent, respectively.
Overall, the study found that 52.3 million Americans live in economically distressed communities. That represents one in six Americans, or 17 percent of the U.S. population. By comparison, 84.8 million Americans live in prosperous communities.
While the average state has about 15.2 percent of its population living in a distressed community, Arizona has 24 percent, it said.
Ahwatukee is not the only prosperous community in the East Valley, according to the study.
Gilbert and Chandler outranked haughtier locales like Scottsdale, San Francisco and Seattle on the report’s list of the most prosperous large cities in the country.
Arizona and California were the only states with three municipalities listed in the top 10 on the most prosperous cities ranking.
Gilbert ranked No. 1 on the list with a distress score of just 2.1 and 99.9 percent of its population living in what the report deemed prosperous ZIP codes. The low score was driven by the town’s under-10 percent poverty rate, low housing vacancy rate and booming employment numbers.
Gilbert ZIP code 85298 saw businesses increase by over 70 percent and employment jump 205 percent between 2011 and 2015. The median income in Gilbert ZIP codes is between 150 and 192 percent of the state median income.
Chandler ranked fourth on the list with a distress score of 10.6 and 64.9 percent of residents living in prosperous ZIP codes.
The majority of Chandler ZIP codes show a poverty rate of 10.3 percent or lower, though 85225, the largest ZIP code, with 73,155 residents, has a poverty rate over 18 percent.
Despite the higher poverty rate, other measurables in 85225 fall in line with the rest of the city. The ZIP code has a median income higher than the state median and saw employment and business presence grow between 2011 and 2015.
The housing vacancy rates across all Chandler ZIP codes are under six percent.
The report also signaled out Arizona Congressional District 5 – which includes Gilbert, Queen Creek and parts of Chandler and Mesa – as the eighth most prosperous congressional district in the country.
Only 0.5 percent of all residents in the district live in distressed communities while 61.4 percent live in prosperous communities. By contrast in the 9th Congressional District, where Ahwatukee is located, 15.1 percent of the population live in distressed ZIP codes and 24 percent live in prosperous ones.
EIG defines prosperous communities as those with a distress score of 20 or below, which ranks in the top fifth of all ZIP codes included in the study.
While the majority of the ZIP codes in the East Valley are considered prosperous or comfortable, those designations are by no means a blanket designation for the region.
Mesa, for example, has six ZIP codes that qualify as prosperous or comfortable, meaning they have a distress score of 40 or lower.
The city also has five ZIP codes that fall under the at-risk or distressed designation.
Mesa’s second most populated ZIP code, 85201, is also its most distressed with a score of 84.2. That ranking largely stems from its poverty rate of 25.2 percent, which is nearly 10 points higher than the national average of 15.5 percent.
One way a city like Mesa can promote the growth of prosperous communities is by encouraging home-grown businesses that “have skin in the game,” EIG co-founder and Executive Director Steve Glickman said.
He added that Mesa currently underperforms in this area versus the state as a whole.
“You have to be an attractive location for entrepreneurship in general,” Glickman said.
Unsurprisingly, the most prosperous ZIP codes in Mesa are on the east side of the city and include 85212, 85209 and 85207.
Leading the way is 85212, home of residential and employment hubs like the Eastmark masterplanned community and Phoenix-Mesa Gateway Airport. The ZIP code has a distress score of 11.6 and a poverty rate under 10 percent.
The study also raises questions about equity and access to prosperity. The Mesa ZIP codes with the highest minority populations are also those with the worst distress scores.
The ZIP codes in Gilbert were less diverse than its East Valley counterparts.
“A place can appear prosperous because it is not accessible to lower or middle-income people,” Lettieri said. “Part of this is (showing) how you got there and how you can allow access to lower and middle-income people – how you can connect places and people so you are sharing that prosperity.”
Prosperous and distressed communities in the same region also should work together to develop strategies to improve overall regional prosperity, Lettieri said.
“(Gilbert and Chandler) are interconnected economies with Mesa and Phoenix…(when there are) distressed areas amidst prosperity, that calls for a new connect agenda “ Lettieri said.
He added that distressed communities need to “Connect their fate with the more prosperous areas, (because) the most poisonous thing for a distressed area is being disconnected.