It’s no secret that many city dwellers fled to rural and suburban areas after the pandemic hit the U.S. in early 2020.
But new data from the U.S. Census Bureau released last week reveals that many of them have stayed, putting down roots in smaller, highly walkable cities and more affordable suburbs.
As Americans settle into their new digs, some of the reasons for that exodus—from runaway housing costs in major cities to work-from-home opportunities that unshackle white-collar workers from their offices—are becoming more clear.
And as remote work becomes a permanent option for many people, the migration away from major coastal cities could reshape the American economic landscape for years to come.
An “emerging tier” of “livable, affordable” cities like Boise, Idaho, and Austin, Texas, were growing before COVID—and that growth sky-rocketed during the pandemic, said Dr. Greg Howard, assistant professor at the University of Illinois Urbana-Champaign’s Department of Economics.
“That’s what the new data is confirming,” Howard told Fortune. “It’s looking more and more like it’s going to be a long-term trend, encouraging people to live where they want to live—not just because that’s where they have a job.”
‘I want to get out of the city’
What kicked off an urban exodus over the past few years is obvious.
“In the early part of the pandemic, people panicked that COVID was going to kill you if you lived in a dense city—New York was the first city to get totally whacked,” Chris Leinberger, a professor emeritus at George Washington University’s Center for Real Estate and Urban Analysis, told Fortune.
It was later revealed that urban density was not linked to the spread of COVID, according to the Johns Hopkins Bloomberg School of Public Health. In fact, a 2020 study by one of its researchers found that denser counties tend to experience fewer COVID deaths—“possibly because they enjoy a higher level of development, including better health care systems.”
But as white-collar workers stayed away from their offices en masse, their thoughts turned to how little space they had during work from home, according to Leinberger.
“In 2020, a fair chunk is saying, ‘I want to get out of the city, and I want to have more space,’” Leinberger said. “The reality of needing space at home, to work from home—that’s real.”
The data dovetails with this line of thinking. Major U.S. counties including Los Angeles County, Calif.; New York County, New York; and Chicago’s Cook County, Ill., lost between 102,000 and 185,000 residents each from April 2020 through July 2021. This trio comprised the three U.S. counties with the largest population decline by number (versus percent) during that time period.
Other counties with numeric population declines ranking in the country’s top 10 during the same period:
- Kings, Queens, and Brox counties, N.Y.
- San Francisco and Santa Clara counties, Calif.
- Alameda County, Calif.
- Miami-Dade County, Fla.
Aside from Chicago, what does this list have in common?
Major coastal city status.
The enduring problem of expensive housing
When looking at migration data over the last few years, Leinberger decries the rise of the “NIMBY” movement, blaming it for the population exodus out of coastal cities like New York and San Francisco.
NIMBY is a term that generally applies to older, affluent homeowners who block denser development, seeking to preserve their neighborhoods exactly as they are—protecting the value of their real-estate investments at the expense of others who need, but can’t find, affordable housing.
“Low density zoning is kept here by NIMBYs,” Leinberger said. “We’re seeing the rise on the East Coast and West Coast of YIMBYS, more and more an effective political force locally.
“It’s always easier to say ‘no’ and try to stop something than build something and do something creative. NIMBYs have the easier job—they just say ‘no’ all the time.”
Leinberger points to a house he bought in the 1970s in a very working-class neighborhood in Menlo Park, Calif., for less than $100,000.
Today, that house is worth more than $3 million, with the land holding the bulk of the property’s value. But “it’s not what you think a $3.1 million house would look like,” he said.
“It’s really whacko. I blame the Baby Boomers for being so selfish that they’ve got theirs. And if they vote not to allow their kids to have what they have, their land and real estate goes up in value.”
The way the U.S. controls land use is “different than almost every other country on the planet,” Leinberger told Fortune, adding that it’s getting something wrong that the rest of the world gets right.
“In Europe, Japan, in China, land policy is set from the top down. We do it from the bottom up,” he said.
In the U.S., local governments—many wary of growth and concerned about property values—control and often limit zoning.
“That’s why we have an affordable housing problem in this country: We have refused to allow land to be built upon,” he said. “We have taken something we have in great abundance—land—and constrained it.”
The is U.S. is short about 7 to 8 million housing units, Leinberger said, “which creates the affordable housing crisis.”
But it wasn’t always that way.
“Fifty years ago we didn’t have a homeless problem, we didn’t have an affordable housing problem, because we had plenty of land legal to build housing on,” he said.
Last fall California Gov. Gavin Newsome disrupted the old order when he signed a bipartisan bill that allows owners of California properties zoned for single families to build additional housing on their lots.
“In California, for the first time in U.S. history, a state government is telling a local government, ‘Build more housing, we’re going to force you,’” he said.
“A house like this,” he said, referencing his first home in Menlo Park, “now it’s legal to build a second housing unit on that lot, like a ‘granny flat’ or accessory dwelling unit. That’s where a working-class carpenter or school teacher could live and walk to school, as opposed to teachers in the Menlo Park school district who have to live about an hour and a half away, each way.
“What school teacher can afford $3.1 million?”
‘Second-tier emerging cities’
So where did all the city slickers go?
In a word, Texas.
Five counties in the Lone Star State were among the top 10 experiencing growth from 2020 through 2021:
- Collin County came in at No. 2, with a jump of just over 36,000 residents.
- Fort Bend County came in No. 4.
- Williamson County came in at No. 5.
- Montgomery County came in at No. 8, with a jump of nearly 24,000 residents.
Austin, Texas’ capital, is partially situated in Williamson County. It’s also partially situated in Travis County, where electric automaker Tesla relocated late last year—from Palo Alto, Calif., in Santa Clara County—No. 7 on the list of the 10 U.S. counties with the largest numeric decline.
Three Texas metros—Dallas-Fort Worth-Arlington, Austin-Round Rock-Georgetown, and San Antonio-New Braunfels—made the top 10 list of metro areas seeing the greatest numeric growth from 2020 to 2021.
John Burns, who founded an eponymous real-estate consulting firm, recently noted on Twitter that regional variations in home prices “tell the migration story pretty well.”
Austin, Denver, and Dallas each saw home prices increase by over 100%, while Chicago, New York, and Washington, D.C., just saw increases of around 20%.
Howard points to up-and-coming hot spots like Boise, Idaho, and Austin, Texas, as “second-tier emerging cities that were growing before COVID” shuffled the housing deck, but “have just kind of sky-rocketed in the last two years.”
The smaller cities that people are moving to also point to the importance of “walkable urbanism,” according to Leinberger—the ability to live, work, shop, eat, and go to school within walking distance. It’s increasingly become a priority for many Americans.
Such a lifestyle is feasible in major coastal metros like New York City and Los Angeles. But for many, it’s just not affordable there.
It’s much more affordable in up-and-comers like Coeur d’Alene, Idaho, No. 2 on the Census Bureau’s most recent list of top 10 metro areas by percent growth, and Boise City, Idaho, No. 6. Both have walk scores of around 40 and neighborhoods with scores hovering around 70, the lowest score considered to be walkable.
“What we have seen over the last 25 years is an explosion in demand for walkable urban stuff, whether that be high density high-rise condos or townhouses,” Leinberger said.
And we know this “not just because of how much is being built, but also by the price premiums,” which have gone through the roof for walkable properties.
Case in point: his former house.
“It still costs twice as much to buy a for-sale walkable urban house or condo or townhouse than it does a drivable suburban,” he said. “The market is still saying that people are willing to pay twice as much money to be able to walk to restaurants, their kids can walk to school, and they feel more connected with society.
“The dominant trend of this decade, I think, will be the urbanizing suburb.”
The future of labor markets
The reason that so many people were able to move over such a short time period: remote work.
About half of full-time U.S. workers—around 60 million—report that they’re able to work from home at least part of the time, according to a March 15 report from Gallup. As many as 70% of “remote capable” employees worked exclusively from home in May 2020. As of February of this year, about 40% worked entirely from home, while about 42% worked a hybrid schedule.
The question, according to Leinberger, now becomes what percentage of American workers will be eligible to work remotely going forward. Prior to the pandemic it was around 5%-10%, he said, but could settle around 40% thanks to pandemic-induced shifts.
But remote work is “still an experiment,” Leinberger maintains.
“The big question you’re going to have to ask yourself as a remote worker is, will you be able to advance your career remotely when you’re not sitting around the conference room table? There’s an old expression is business, you’re either at the table or on the menu.”
“If you’re not at the table,” he said, speaking of remote workers, “you might get chopped out of something.”
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