Secondary Cities Are Paying To Relocate Workers Tired Of Living In Pricey Shoeboxes
Now that remote work has proven to be a viable option for millions of American workers and the companies they work for, a migration from more expensive places to less pricey ones has begun.
As yet, evidence of a permanent work-from-home movement is still largely anecdotal. Facebook, for instance, has said that it plans to enable as much as half of its 45,000 workforce to work from home. Twitter and Shopify are allowing most of their employees to work remotely as well.
Roughly 75 million U.S. workers have jobs that could be done remotely, or about 56% of the total workforce, according to Global Workplace Analytics.
The company further estimates that at least a quarter of the U.S. workforce, and perhaps as much as 30%, will work at home at least a few days a week by the end of 2021 because workers will want that and managers have lost their previous reluctance about it. It doesn't estimate how many will be full-time remote, but it seems probable that some millions of the total will be.
It turns out that there are economic development agencies and other organizations nationwide that are willing to help the process along by paying remote workers to move. The movement of such workers is only a trickle now, but considering the sharp difference in the cost of living in various places, that migration has the potential to grow.
"From everything we see in our data, the migration to higher-quality of living hubs is going to be real," Zumper CEO Anthemos Georgiades told Bisnow in an email.
"That doesn't mean that San Francisco residents are all about to move to outer Montana, unlike what you may read on Twitter," he said. "[But] the migration is real."
In short, people are interested in leaving expensive places like the San Francisco Bay Area, where a one-bedroom averages $3,360/month. Zumper data hints at the beginning of the trend: Bay Area residents' searches to move have increased 11% between January and April.
At the same time, the relatively low-priced metros of Charlotte, North Carolina (one bedroom, $1,170/month), Indianapolis ($860/month) and San Antonio ($870/month) were the top cities renters were interested in moving to so far this year, according to Zumper. Of those, 40% or more of inbound searches came from outside of their respective metro areas.
The cost of housing isn't the only component of a region's cost of living, but it is a critically important one, and in some places, it can be a millstone around the necks of workers already burdened with the likes of student loan debt and high healthcare costs.
"There will be movement away from more expensive places because the remote workforce model has arrived," said TransparentBusiness Chief Transparency Officer Moe Vela, whose company specializes in tech that facilitates remote work.
"It's a permanent change," Vela said. "Not everyone will work remotely, of course, but many more workers will do so in the future. It took a tragic circumstance to move us in that direction, but businesses have seen that efficiency and productivity go up among remote workers. So more employees are going to be relocating, and they're going to be looking for the best cost of living."
A number of places are explicitly trying to recruit remote workers to relocate. Typically the programs offer cash upfront to workers who are already employed full time, but are able (and willing) to relocate.
Tulsa, Oklahoma, kicked off a program in late 2018, Tulsa Remote, funded by the locally based George Kaiser Family Foundation, that offers $10K distributed over the course of a year to eligible remote workers willing to move to the city. The program also provides a year membership at a local coworking space.
The first year of the program had 100 slots, and its organizers expected 1,000 applications altogether. That many applications came on the first day of the program.
"The response to Tulsa Remote has consistently blown away all expectations each year," Tulsa Remote Executive Director Aaron Bolzle said. "We currently average nearly 10,000 applications a year and continually evaluate and expand our program based off of demand."
Rather than reduce interest in the program, the coronavirus pandemic has increased it, Bolzle added. The 2020 version of the program will offer awards to 250 participants, he said.
"Applications are now rolling in and driven, community-minded individuals with the ability to work remotely are encouraged to apply," Bolzle said.
In northwest Alabama, the Shoals Chamber of Commerce and the Shoals Economic Development Authority launched Remote Shoals with a similar goal in mind: attracting remote workers to come to either Colbert County or Lauderdale County, Alabama, and offering $10K to each worker who does so.
The economic component of the program's pitch is clear: It is a lot cheaper to live in this part of the country. The program's website offers a way to scroll through comparable costs between Shoals and other places.
For example, the overall cost of living compared with San Francisco is 58.2% less, with an average rent savings of $2,125 or an 86% average lower cost for those wanting to buy a house. That is only the most extreme example, with the site also comparing the Shoals favorably in terms of cost to Atlanta, Chicago, Nashville, New York and other places.
"We stress the quality of life, which is good here, but what really seems to get people's attention is the cost of living," Shoals Economic Development Authority President Kevin Jackson said.
The program began last year with 10 remote workers paid to move to the area, Jackson said. This year, the total will be 25.
"We've had a good response this year, despite COVID, with over 250 applications, and we haven't done any advertising or a social media push yet," Jackson said, with people interested from all over the country, including some high-priced places like San Francisco and New York.
"Not all of the applicants are from expensive places to live, but a lot are," Jackson said. "People are tired of making almost six figures, but still living almost at poverty level. They're also looking to start families, the Shoals is a good place for that."
Other programs to persuade remote workers to relocate include a statewide initiative in Vermont, launched in early 2019, that is paying about 70 relocating remote workers as much as $10K over two years. It is a reimbursement program rather than upfront grants, and as of 2020, had awarded all of the funds allocated, though the state legislature might authorize additional funding.
Last year, Colorado’s Office of Economic Development and International Trade unveiled Colorado’s Mutual Prosperity Program, which doesn't pay workers directly, but it incentivizes businesses to hire people who live in rural parts of the state to do remote work.
Under the program, rural and urban economic development organizations work together to solicit new or expanded businesses that hire employees in both locations. The incentive will be paid at the end of five years, based on the number of permanent new rural jobs created.
The Colorado program, which started in early 2019, pays on a sliding scale according to how many net new jobs are created. For one to 10 new jobs, it shells out $2.5K/job; 11 to 15 jobs, $3K/job; and if more than 16 jobs are created, it will pay $5K/job.
Other remote-worker incentive programs are specific to the tech industry. In Savannah, Georgia, the Savannah Technology Workforce Incentive, which was unveiled just this month, will offer $2K for moving expenses for remote tech workers coming to the city. It will pay as many as 50 workers to relocate by the end of this year.
"This incentive is a great way for technology workers that can work remotely to think about relocating to Savannah as a permanent location," Savannah Economic Development Authority CEO Trip Tollison said in a statement. "We know once these technology workers arrive, Savannah, and its diverse offerings and high quality of life will sell itself."