Are People Really Leaving Cities?? (And will they move to my town?)

The short answer is "Yes, but..." Some people are leaving cities due to the coronavirus, but the buzz around a virus-caused metro exodus masks a real trend driven by rising costs. 

The Young and the Restless and the Wealthy 

In the past month, major news sources have all covered the supposed exodus out of cities in the wake of COVID-19. What the data shows is that at least two groups are on the move; the young and the wealthy. 

An analysis from Zillow showed that roughly 2.7 million U.S. adults moved in with a parent or grandparent in March and April as the coronavirus pandemic spread. In part this is due to students returning home from college, but it also reflects young people moving back home due to the huge swing in the labor market; the number of employed young adults (aged 18-25) fell by more than 25 percent, or 5.9 million, in March and April. 

The New York Times reports that while nearly 5 percent of the city's population left, in the wealthiest blocks -  neighborhoods like the Upper East Side, the West Village, SoHo and Brooklyn Heights - residential population decreased by 40 percent or more. These wealthy people may be responsible for the huge increase in temporary to long term rentals (and home sales!) being seen in places like Vermont, Connecticut, and - for those wealthy evacuees on the West Coast - Montana. 

Exodus Fears Unfounded

The coronavirus has no doubt impacted movement around the U.S., but rumors of an fast-paced emptying out of cities are unfounded. Another Zillow analysis of metro dwellers' real estate browsing habits prompted some news outlets to conclude that a exodus was coming soon. Curbed writers reviewed this data and found that it's not a substantial indication of mass moving. Jeff Tucker, an economist with Zillow is quoted in the article stating, "There are people who really believe the urban exodus hypothesis. If there’s an evidence for it in the data, it’s very weak.”

Cost Drives Moves

But while cities may not see a drop in residents due to the pandemic, there is still an overall trend in stagnation and even decline in major metros, not due to a virus, but due to increasing prices. William Frey, a demographer at Brookings Institution finds that recent Census data shows the country’s three largest metropolitan areas, New York, Los Angeles and Chicago, all lost population in the past several years. The next largest metro areas, like Houston, Washington, D.C., and Miami also grew more slowly in that same time. Overall, Frey found that growth in the country’s major metropolitan areas fell by nearly half over the course of the past decade. 

An Offer Remote Workers Can't Refuse 

Some small metros and rural states have taken advantage of this trend, and the increased ability to work and socialize remotely, by offering targeted incentives to entice young talent. Vermont's New Worker Relocation Grant Program offered $10,000 to workers to move to the state. The program ended up making 290 grants, and getting a lot of publicity for Vermont in the process. In Oklahoma, the TulsaRemote program also offers $10,000 grants, but with more infrastructure; the process is competitive, and awardees have access to perks like  workspace, social activities with others in the program, and assistance with housing. 

Questions about these programs linger - would people have moved without the grant? Would the money be better spend on education for current residents? But in a time when workforce drives business location decisions, and people are on the move, secondary markets are striving to stand out in any way.