Utah's attractive business climate bodes well for pandemic recovery

By Brice Wallace

Utah has several attributes that make it attractive to outsiders — including those with businesses — whenever the COVID crisis passes.

That’s the conclusion of a pair of speakers at the recent Newsmaker Breakfast at the Kem C. Gardner Policy Institute. Joel Kotkin, author and presidential fellow in urban futures at Chapman University, and Wendell Cox, senior fellow at the Urban Reform Institute, see Utah with potential advantages — especially in contrast with Los Angeles and other parts of California — for continued economic growth.

“I think it’s very hard to ask somebody to locate a business, particularly in many of our big cities on the [West] Coast, where the taxes are high, regulations are high and the public schools are completely dysfunctional and you never know what’s coming next,” Kotkin said.

In Los Angeles, he said, businesses often say that high taxes and burdensome regulations are among the problems but even worse is “the attitude of the regulators.”

“Like a businessperson would say to me, ‘If I go to the city of Los Angeles, they are looking for some way to put me out of business or make me feel bad. When you go to Utah, if I’m a company and I have 50 employees and I’m going to move from Irvine, let’s say, to Salt Lake City, I am sure that the city officials or the county officials are going to welcome me,’ and that, I think, is maybe as important as anything else,” Kotkin said.

“I think it’s a question of welcoming, and I think that’s one of the great advantages of a culture like Utah, that even if you’re not part of the majority religion, you’re still going to be welcomed, you’re still going to be treated well, and if you bring good jobs, you’ll be included.”

Utah’s strengths also include a dispersed and family housing pattern that fits the current trend of millennials and others shifting from the cities to the suburbs, pro-business policies leading to both high-paying and mid-level job growth, public engagement that is a key advantage in a crisis, and a church culture and family focus that is critical to a pattern of overcoming troubles, they said.

“This idea of communal self-support and mutual support is critical in any kind of crisis,” Kotkin said.

Utah has fared relatively well during the COVID pandemic in part because it is less dense than other metro areas, even in Salt Lake City, they said. That means fewer people are being infected and dying than in other cities. Cox cited Centers for Disease Control and Prevention statistics showing Utah being No. 45 among states for COVID death rates. Among metro areas, Ogden, Provo and Salt Lake City all had lower rates than similar cities. The rates in Utah counties is below half of the national average.

“It’s a good environment for COVID, as it were,” Cox said. “COVID is not good, but Utah has done very well.”

Denser cities, meanwhile, have been hit the hardest, but it’s not just because of simply more people. They feature enclosed spaces without adequate ventilation, such as transit vehicles, crowded elevators and high rises without windows that open, they said.

Utah fits the trends of people moving out of cities and into suburbs as millennials and others — with children and changing priorities — seek to live in single-family homes. Many people outside Utah have fled inner cities due to increases in crime, “increasingly lunatic politics” and law enforcement troubles, Kotkin said. The suburban life has proven to be even more attractive during the pandemic, they said.

“In COVID, if you’re in a lockdown and if we’re going to see future lockdowns, which is not beyond the pale, what you’ll find is, you’re a lot better off with a house with a back yard than you are in a one-bedroom apartment if you’re locked-down,” Kotkin said.

Likewise, working from home already was a growing trend but the virus impacts have broadened its appeal.

But Cox warned that increased housing costs could become so acute that it could hamper Utah’s attractiveness to outsiders.

“This is something that we believe you really need to be looking at because, at the moment, you could well get strong migration from elsewhere in the country, but that could come to a close pretty quickly if this housing affordability continues to deteriorate,” Cox said.

Still, both men were bullish about Utah’s economic future.

“Keep doing what doing and begin to understand that your intrinsic strengths are great strengths,” Kotkin said. “Look at yourself and look at what’s happening, and see if can build on your strengths.”