Reported population decline sends ripples through business community

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RENO - Reports that Nevada's population growth stalled - and possibly has even been thrown into reverse - came as no big surprise to many Northern Nevada businesses.

But the findings by the U.S. Census Bureau and the State Demographers Office provided factual confirmation to support the strong hunches of businesspeople who have struggled with declining markets.

The Census Bureau estimates that Nevada's population grew by 1 percent from mid-2008 to mid-2009.

State Demographer Jeff Hardcastle, meanwhile, estimated that Nevada lost 1 percent of its population - roughly 28,000 people in the past year.

After releasing his preliminary estimates of a declining population, Hardcastle pulled them back for a fresh look. The new numbers, he says in a note on the State Demographer's Web site, will be available this month.

Less scientifically, Allied Van Lines says its shipments of household goods into Northern Nevada were about equally balanced between in-bound and out-bound loads during 2009.

Allied said it moved 98 families into Reno, Sparks and Carson City, and moved 92 families out of the region.

George Shoenberger, whose Shoenberger & Shoenberger Inc. manages 650 apartment units in the region, says apartment owners have suspected for months that the region's population may be declining.

"My sense is that people are moving out of town," Shoenberger says. "If there aren't enough people to go around, we'll have vacancies."

Vacancies in some smaller apartment complexes, he says, are running as high as 25 percent. Owners are scrambling to reduce rents and throwing in incentives such as free television sets to retain existing renters and attract new ones.

"The apartment market has been impacted dramatically," Shoenberger says.

Kenneth Blomsterberg, who brokers apartment-complex sales for Marcus and Millichap Real Estate Investment Services Inc. and invests in Reno-area multi-family housing projects, says rising joblessness is a key factor.

"They just can't find any work," he says of hundreds of apartment tenants in the region. "They're moving out."

That marks a dramatic turnaround from three years ago, Blomsterberg says. Then, jobs were plentiful, apartment complexes were full and rents were rising.

The labor force in the Reno-Sparks region during November stood at 225,100 - a decline of 4,500 potential workers from a year earlier.

But Bill Anderson, the chief economist for the Nevada Department of Employment, Training and Rehabilitation, says no one should jump to a conclusion that all of those workers left the region.

Some of them, he says, have simply given up the search for work and no longer are counted by statisticians as part of the labor force.

For retailers, the combination of stagnant or declining population figures with falling disposable income during the recession can play out in two ways, says Kelly Bland, a senior vice president and specialist in retail at NAI Alliance in Reno.

Store owners either must resign themselves to lower sales per square foot, Bland says, or the number of square feet of occupied retail space must decline.

"We've seen a drop in occupancy in shopping centers," Bland says. "People are already feeling that."

And taxable sales figures in Washoe County have fallen dramatically since the autumn of 2008, although Bland notes the rate of decline is beginning to moderate.

Even before the Census Bureau and State Demographer's reports, some retailers were trying to figure how apartment vacancies could be rising at the same time that hundreds of homes stood vacant in the region. One explanation: Folks had doubled-up in apartments to save on rent or moved home.

"But that didn't explain the entire thing," says Bland. "It would not come as a surprise that we lost population."

The president of the Reno-Sparks Association of Realtors says the group keeps an eye on population trends but doesn't find the current situation alarming.

The region's underlying assets - its location and its business climate - will continue to be attractive to businesses, retirees and others, says the Realtors' Ken Amundson.

But he says the long-term health of the economy and the return of a growing population depend on efforts to create more jobs in a diversified regional economy.

"People go where the jobs are at any give time," Amundson says.