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Urban Reshuffle?

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eye on the news

Urban Reshuffle?

Remote work is accelerating a talent migration to cities with lower living costs and better quality of life. December 18, 2020
Cities

“I have moved to Texas,” declared Elon Musk this month. The auto and aerospace mogul is not alone. Podcaster Joe Rogan recently decamped to Texas, as did software giant Oracle and multinational IT company Hewlett Packard Enterprise. A slew of others, from financier Carl Icahn to software firm Palantir, have also fled pricey cities this year for cheaper, more livable locales across the country.

New data from LinkedIn suggests that working professionals are joining them. Changes in location on user profiles from April 2020 to October 2020 show a migration of talent to less-expensive hubs. According to a Bloomberg analysis, Austin, Phoenix, and Nashville gained the most talent during that period, while Hartford, New York City, and the San Francisco Bay Area lost the most. Far from causing the death of all cities, 2020 has breathed new life into some metros while leaving others on life support. Other winning cities include Tampa and Jacksonville, as well as Charlotte, Dallas, Denver, Las Vegas, and Charleston, South Carolina.

The urban exodus primarily consists of workers bailing on the Big Apple and the Bay Area. These same metros were the leading contributors of new migrants to Austin in 2020. Cities that were attracting talent nationwide before Covid-19 are continuing to do so, in greater numbers. Migrants appear to be following preexisting social and professional networks to already-thick labor markets with thriving industries and good quality of life.

By contrast, Rust Belt cities—the “comeback kids” of the past decade in downtown growth—don’t appear to have attracted these same talent flows, according to LinkedIn. Chicago ranks fourth among cities losing workers (and the Windy City is the largest source of new migrants to Nashville), followed by Cleveland (fifth), and Detroit, Cincinnati, and Pittsburgh (eighth through tenth place, respectively). If anything, sunshine is continuing to power urban growth.

These moves may be signaling a great reshuffle. With the widespread adoption of remote work, millennial professionals and their workaday neighbors are steering their moving trucks and growing families to secondary cities and densifying suburbs. Shifts that likely would have taken place over years are now taking place in a matter of months.

Right now, 41.8 percent of the American workforce remains fully remote, and more than one in four workers are likely to remain remote through 2021. With America working online, talent can move without sacrificing careers, and firms can lower costs while maintaining output. Cities that had previously taken growth for granted now find themselves competing fiercely with one another.

Of course, someone’s vacant East Village apartment may be a newcomer’s chance to live the New York dream—at a discount. How quickly cities like New York can replenish the ranks of their newcomers depends in large part on leadership. Will transit systems go off the rails? Will tax rates go up as services falter? Will crime rise and neighborhoods deteriorate? Moreover, the cost of living in major cities, particularly when it comes to housing, remains a major obstacle, especially when a waterfront view in Miami costs the same as a brick-wall view in SoHo.

It’s not yet known how many Americans moved in 2020, and to where. For now, we have LinkedIn data and the growing awareness that America’s “Zoomtowns” are places of greater opportunity, better quality of life, and lower cost of living.

Photo by Tom Pennington/Getty Images

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