An aerial photo taken April 15 shows the Strip. Economists say Las Vegas will continue to grow bigger and richer while remaining largely reliant on casino gambling over the next 20 years. REVIEW-JOURNAL Las Vegas Valley Water District and Southern Nevada Water Authority General Manager Pat Mulroy sits with a historic photograph of a pioneer woman with a sign asking not to waste water in her office Tuesday. Photo by K.M. Cannon. The boom goes on Las Vegas' continuing population explosion is driving developers and residents to outlying suburbs, ranging from Pahrump in Nye County to the Arizona area south of Hoover Dam. Residents, who cannot afford increasingly expensive single-family homes in the Las Vegas Valley, will be forced to live in multifamily housing or commute from homes in nearby areas, analysts say. Developers are creating new communities in places like Coyote Springs Valley northeast of Las Vegas, and near Dolan Springs, Ariz., as well as enlarging communities, such as Mesquite and Logandale. Industrial projects, such as warehouses, are expected to be built near the planned airport in the Ivanpah Valley near Jean and Primm. While the federal government can sell additional land for private development, other areas are set aside for recreation, wildlife or Air Force use. Graphic by Mike Johnson. An aerial view shows homes in Summerlin, a perennial leader in growth among the various sections of the Las Vegas Valley. REVIEW-JOURNAL Homes under construction spring up against the backdrop of the Sheep Mountains in Aliante, north of the Las Vegas Beltway and west of Aliante Parkway, in July. REVIEW-JOURNAL

A 1955 Life magazine cover article asked readers: Las Vegas -- Is the Boom Overextended?

That magazine cover now hangs on the wall of the office of Las Vegas money manager David Ehlers.

Ehlers, chairman of Las Vegas Investment Advisors, likes to show new customers the cover as a warning to those who might doubt Las Vegas' ability to sustain its often-times explosive growth rate.

"Since the 1950s, people have been underestimating the growth in Las Vegas. Nobody has experienced the rate of growth that we have experienced," said Nick Braybrooke, director of resources for the Las Vegas Valley Water District.

UNLV economics professor Thomas Carroll was once a doubter.

Carroll, who is predicting a 5.7 percent local growth rate this year, arrived in town 19 years ago when Las Vegas' megaresort boom was getting under way, and for each of the past 19 years Nevada has been the fastest growing state. He and Keith Schwer, director of UNLV's Center for Business and Economic Research, "looked around and said this can't continue."

But it did.

Over much of the past 50 years, Southern Nevada's economy has been speeding forward with only short economic slowdowns.

And economists and analysts generally believe Las Vegas will continue to grow even bigger and richer while remaining largely reliant on casino gambling over the next 20 years, in part because of the city's history and current trends.

Local experts and industry leaders, however, also see some changes in the making.

They anticipate a larger suburban area that sprawls from the Arizona side of Hoover Dam, along Interstate 15 south of Las Vegas, to Pahrump and Mesquite as more local workers show a willingness to drive farther to work so they can live in outlying areas where single-family homes are more affordable.

But they also foresee a boom in high-density urban housing that is expected to change the city's skyline as more people, both local and wealthy outsiders, buy primary and secondary homes in the towering high-rise projects that are going up on the Strip and elsewhere.

Much of the city's future growth is expected to be spurred by its rapid population gains, currently running at about 4,000 people per month. The population of Clark County was 48,000 in 1950; today it's an estimated 1.75 million, according to local governments.

A major reason for that growth is simple: Las Vegas creates more jobs than most other areas in the country.

With Nevada's unemployment rate routinely lower than both California's and the nation's, Southern Nevada's job creation machine acts "like a giant vacuum cleaner, bringing people in here,"Ehlers said.

Las Vegas' population isn't just growing; it's growing more wealthy, too.

Between 1994 and 2003, the number of individual taxpayers in Nevada who reported $200,000 or more in adjusted gross income increased to 19,683 from 7,279, a whopping 170 percent increase.

Not only did the highest wage earners increase in total numbers, their percentage among the total number of taxpayers also leaped. The highest-income taxpayers in the state represented 1.89 percent of all taxpayers by 2003, up from 1.01 percent in 1994.

It's not just workers who are moving to Las Vegas, though. Retirees make up a sizeable part of the population gains here.

" Retirees don't want to die where it's cold, " Ehlers said, suggesting that many of the city's new amenities, including fine restaurants, are helping to entice retirees to move here.

Economics plays a part in many retirees'decision to move here, too.

In the case of California and some other high-priced states, retirees can sell their homes and buy a new one in Las Vegas and still have cash left over, he said.

"If Las Vegas' future is debatable, where are 100 million (baby boomers) going to go? " Ehlers asked.

Other experts agree with that assessment, although they differ in their opinions on just how many of those baby boomers and others will end up here in the next 20 or so years.

The estimates range from as low as 2.8 million Clark County residents by 2024, according to Nevada state demographer Jeff Hardcastle and Las Vegas-based Restrepo Consulting Group, to as high as 3.2 million by 2025, according to the Center for Business and Economic Research at the University of Nevada, Las Vegas.

The differences in the projections result because different economists use different economic models to make their forecasts.

UNLV's Carroll, who also owns Las Vegas-based consulting firm Carroll & Associates, believes the university's economic research center underestimated this year's population growth by 1.6 percentage points because it relies on data from Regional Economic Models Inc.

While the REMI data is sophisticated, it was designed by economists in Massachusetts and is intended for a more mature economy such as that state's, he said.

Although Las Vegas' economy is maturing, it isn't there yet, he said.

"It's not like any other place," he said, explaining that because there are no comparable cities, the best projections on local growth rates are "all seat-of-your-pants."

Pat Mulroy, general manager of the Las Vegas Valley Water District and Southern Nevada Water Authority, complained that she and her staff have been forced to scramble to meet underestimated growth in recent years because of reliance on Schwer's forecasts.

To solve the problem, she intends to get forecasts from other analytical groups to consider and contrast with the center's forecasts. "I think in the long term, Keith is going to be right," Mulroy said.

Ehlers thinks Wells Fargo, which expects an average annual growth rate of 3.8 percent, will be closer to the mark 20 years from now.

The county's minimum annual increase in population since 1988 was 4.24 percent in 2002, and the maximum was 8.4 percent in 1991, he said. The county population grew by an average of 6.6 percent yearly in the 1980s and 8.6 percent in the 1990s.

"If we look at today's forces for growth in addition to the historical ones, meaning the development of downtown and more corporate and service activity, it is difficult to imagine that the population and employment growth won't be at least equivalent to the lowest growth over the last 20 years or so," Ehlers wrote in an e-mail. He did express short-term concerns about housing prices, however.

Of course, Southern Nevada's biggest "force for growth"remains its gambling and tourism industry, and everyone agrees it will continue to be the biggest spur for future growth.

The easiest-to-spot indicator is the number of tourists coming to Las Vegas.

The Las Vegas Convention and Visitors Bureau reported 37.4 million visitors came to Las Vegas last year and forecasts that the total will reach 43 million by 2010, said Kevin Bagger, research director. The bureau counts 134,000 hotel and motel rooms in Las Vegas today and expects 23,441 additional rooms to be built by 2009, he said.

The projected room count also doesn't include another 10,000 planned time-share units and condo hotel rooms that will be occupied by tourists, he said.

Industry officials and others say the adult fantasy world that casino operators have spent billions of dollars building here will continue to draw tourists to Las Vegas even though casinos are becoming more common around the globe.

"Las Vegas sets itself apart from the other gaming areas of the country and the world. It does it on a scale that nobody else can match," Anderson said.

"It is certainly light-years ahead of any resort community in the United States and, for that matter, in the world,"said James Murren, president of MGM Mirage.

"I don't think that they'll have an opportunity to provide what we have in terms of the total resort experience," Murren said, referring in particular to Macau's developing casino industry.

Others, however, say there are things that could threaten Las Vegas' dominance in the gaming and tourism industry, thus hurting its growth prospects.

Jeremy Aguero, principal analyst with Applied Analysis, is one observer who believes that Macau, Indian casinos in California and casinos in other areas will become much more competitive with Las Vegas, especially as cash-strapped states continue to expand their casino offerings as a way to boost their revenues.

Online gambling, already a multibillion-dollar industry, also is threatening to undermine Las Vegas' dominance, he said.

Last year, more than 1,800 Web sites accepted about $7 billion in wagers, with the market expected to grow to $18.4 billion by 2010, according to BetonSports.com.

A terrorist attack on Las Vegas would be crippling, of course.

Aguero, however, is more concerned about a terrorist attack occurring in some other large venue, such as a sports stadium in Atlanta. His reasoning is that if people become afraid to congregate in those kinds of places, they also might grow wary about the possibility of an attack on casinos.

With the terrorist attacks of Sept. 11, 2001, local visitor volume fell to 14 percent lower in September 2001 from the same month in the previous year, according to the Las Vegas Convention and Visitors Authority.

For all of 2001, the total number of visitors slipped 2.3 percent, although the visitor dollar economic contribution increased 0.14 percent, before adjusting for inflation.

Las Vegas didn't break its 2000 visitor record until last year, but visitor spending was 1.4 percent higher even in 2001, when the terrorists attacked, than it was in the previous year.

Others see a number of other problems that could put a damper on growth.

UNLV's Carroll, for instance, cites "serious labor productivity"issues as a major concern.

At the center of the problem, as he explains it, is the willingness of local government officials to rely on developers to build key infrastructure such as roads even while those same officials insist on regulating businesslike operations such as taxi and limousine services rather than leaving them to free-market forces.

Boston, he notes, has about 750 limousine companies, while Las Vegas has only 15 because of a local regulatory system that allows licensed operators here to challenge any new applicant for a license.

"The fact is you've got four cab companies in town. They'll come when they feel like it," Carroll said, noting a recent survey finding that many visitors who said they wouldn't return to Las Vegas frequently cited transportation problems getting to and from the airport.

"We have this myth of being a competitive economy, but in fact Nevada is one of the most regulated states in the country because it's all based on the gaming model," he said.

Other problems Carroll cited as possible drags on Las Vegas' economy include housing that's becoming too expensive for many workers and a weak education system.

Water, however, "might be the ultimate constraint on growth,"according to Anderson, the economist at Wells Fargo.

Mulroy promises that her water agencies can and will provide Southern Nevada with all the water it needs for growth for the next 20 years and beyond.

"Southern Nevada will always have enough resources 40 to 50 years out," she said, predicting that Western states soon will start talking about building desalination plants to take salt out of seawater so it can be used by farmers and residents.

"We'll have built facilities into rural Nevada (by 2025)," she said.

Carroll does see problems because of the way Nevada handles its water. The state of Nevada owns the water that hasn't been permitted but, unlike Phoenix, Las Vegas doesn't have an agricultural base from which to purchase additional water supplies.

Nevada has the smallest allocation of the seven states that draw water from the Colorado River, and Las Vegas is the only metropolitan area in those states that doesn't import water.

Water importation will be key, Mulroy said.

"It's the only way metropolitan cities in the West can develop because no one spot has enough water to meet both the agricultural needs and the urban needs," she said.

The federal government's plan to establish a waste disposal facility for spent nuclear fuel at Yucca Mountain, about 100 miles northwest of Las Vegas, presents another risk to the local economy, some analysts say. An accident during transportation of nuclear waste through Las Vegas would send property values plummeting along the route, according to one study.

Another study suggests that property values in Nevada could be impacted as soon as the government begins transporting radioactive waste through Nevada, even before any possible accident.

A national recession also could pinch the area economy. "Looking forward the next 20 years, it's likely we'll have another recession, and it likely will be tied to energy," Aguero said.

As evidence, he points to the gasoline crisis in 1981, when local visitor numbers slumped 1 percent.

Still, visitor spending actually increased one-half of a percentage point before accounting for inflation during the same period, which might reflect a decision by vacationers to take relatively short and inexpensive vacations to Las Vegas rather than more expensive trips to more distant destinations, Aguero said.

The analyst says the state could reduce the impact of higher fuel prices if it encourages a shift to alternative fuel sources instead of fossil fuels, such as natural gas and oil. Otherwise, "we're all going to be paying in excess of $5 (a gallon for gasoline) by the mid-2010s."

Another step that state and local officials could take to alleviate future slowdowns such as the one following 9/11 would be to encourage further diversification of Southern Nevada's tourism-based economy.

Leisure and hospitality, a category that includes recreation, casinos, hotels and restaurants, provided 34 percent of the jobs in 1995 but only 30 percent of the total for the area this year, according to the Nevada Department of Employment Training and Rehabilitation.

"It does look like Las Vegas is diversifying its brand to some extent," Wells Fargo's Anderson said.

Nevada Development Authority Chief Executive Somer Hollingsworth says his agency's diversification efforts have helped stabilize the Las Vegas economy since 9/11.

But even though the development authority gets compliments from many for its efforts, others say that not enough is being done and, indeed, that the challenge might be insurmountable.

Carroll, for one, said the local economy is not diversifying sufficiently because the population lacks expertise outside of the gaming industry.

As a result, "we're never going to become a Southern California megalopolis. I don't see us growing much beyond 2 to 3 million."

George Smith, a former Nevada Development Authority chairman, said the authority "will probably never be a significant diversifier of the economy."

The problem, he said, is that it's hard to diversify an economy when developers such as Steve Wynn, owner of the Strip's newest megaresort, Wynn Las Vegas, add 9,000 new casino jobs in a day.

"We've kept pace," he said of job diversification. "It's a miracle."

Las Vegas' diversification efforts could be hampered further by its increasing problems with housing affordability because nongaming businesses can locate their offices and plants in other Western states with lower housing costs, said John Restrepo of Restrepo Consulting Group.

Real estate prices are soaring in part because of federal and local land sales practices, he said. Specifically, the Bureau of Land Management controls the number of auctions of federal land each year, and local governments control the amount of land sold in those auctions, Restrepo said.

Dennis Smith, president of Home Builders Research, doubts that such politicians and government officials will keep pace with the demands of growth. The supply of land needs to be increased so that prices will come down to affordable levels, he said.

Otherwise, "there's not going to be that many people that can afford to live here," Smith said. Growth "will hit a wall."

"That, I guess, is what the environmentalists will call controlled growth," he quipped.

The rising cost of housing worries companies that are already here, too.

"I'm hoping that we don't price ourselves out of the market,said Michael Yackira, chief financial officer of Sierra Pacific Resources, parent of Nevada Power Co.

"When we need to attract good people to this city from out of the city, one of the first things they look at is housing."

Despite the worries, most analysts believe Southern Nevada will beat the odds and confound its naysayers once again.

"Las Vegas, at least for five to 10 years, looks like it will be one of the top economic performers in the country," Anderson said.