Aspen’s big chill: the economy
GLENWOOD SPRINGS ” The two engines that superheated the economies of Aspen and western Colorado for most of this decade are getting chilled by the national economic meltdown, two experts said Friday.
Second-home development has already tumbled and activity will continue to be slow for the foreseeable future, according to Jim Westkott, the senior demographer for the state of Colorado.
And the frenetic pace of drilling for natural gas in western Garfield County will likely level off because of the economy and infrastructure limitations, said Ben Alexander, associate director of a nonprofit research group called Headwaters Economics.
The men were featured speakers at the annual State of the Valley conference hosted Healthy Mountain Communities in Glenwood Springs on Friday. Healthy Mountain Communities is a Roaring Fork Valley-based nonprofit that helps governments in the region identify issues and solutions.
Westkott said tourism in the Roaring Fork Valley will be hurt by the national economic climate and that a recession will result in the loss of some jobs in the retail and service sectors. Second-home development “will slow considerably,” he said.
Inflated real estate prices haven’t deterred aging baby boomers from gobbling property in Aspen and other mountain paradises in recent years, Westkott said. Their influx and the jobs they create through demands for service have spurred explosive growth in western Colorado.
The drastic drop in second-home development has convinced Westkott and his staff to reconsider growth projections. They don’t believe Eagle and Pitkin counties will grow as fast as they projected as recently as last year ” although both counties will continue to grow.
He said the baby boomers will flock to places like Aspen and Vail once the economy improves, and that the current slump creates no reason to panic. “You don’t need to go off chasing bucks,” Westkott said.
Garfield County’s growth will remain closer to projections due to the energy-based economy, he said.
“Natural gas will continue to create some new jobs and population growth, but its development is currently limited by pipeline capacity out of the state,” Westkott said. Alexander said demand is flat for natural gas and that prices, while volatile, have dropped in recent months. That suggests that drilling activity might level off. Western Garfield County has been “ground zero” for the energy boom this decade, along with the area around Pinedale, Wyo., he said.
That boom has created problems. There are more jobs than workers in western Colorado, Alexander noted, so any new openings essentially require the region to import workers. The resort economies of Aspen, Snowmass Village, Glenwood Springs and Vail are competing with the gas patch for workers.
“If you’re not a drug addict you can get a job if you want a job,” Alexander said.
The energy industry pays well, but other fields haven’t kept pace. That makes it difficult to hire essential community workers like teachers and police officers, let alone maids and restaurant workers.
The creation of well-paying jobs and importation of workers has driven up housing prices and the overall cost-of-living in the area. The lack of affordable housing that has long plagued the Roaring Fork and Eagle valleys has now spread to the Grand Valley and places like Rifle, Alexander said.
Meanwhile, Garfield County has done little to diversify its economy, making it susceptible to a bust, according to Alexander.
“A slowdown on the West Slope wouldn’t necessarily be a bad thing,” he said. He stressed that he wasn’t promoting job loss or financial hardship for anyone. He believes a cooling off would relieve some of the market forces like the lack of housing and competition for jobs. “It may afford a little breathing room,” he said.
Westkott concurred. “This will bring things down to earth and in the long-term it’s probably a good thing,” he said of the economic climate. Like Alexander, he urged leaders in western Colorado to use the reprieve as a time to plan their communities’ futures.
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