Some hints about the effectiveness of relocation incentives offered by American communities

A number of American communities are offering monetary incentives to bring in residents and workers. Do the incentives work? Here are some recent clues:

Photo by Alexander Mils on Pexels.com

Fifty-three communities in 24 states and Puerto Rico are trying to lure new residents by offering cash, covering moving costs or providing other incentives, according to makemymove.com, an online directory of such programs. They largely seek remote workers from expensive coastal areas. Though the idea started before the pandemic, COVID-19 fed the movement by quintupling the number of remote workers and dampening some of the conviviality millennials sought in big cities.

So far, many areas have failed to bring in significant numbers of remote workers despite offering incentives. Most don’t have the staff and money backing the Tulsa Remote program, which is funded by the George Kaiser Family Foundation.

Even so, smaller areas have found advantages in remote worker programs. Natchez, Mississippi, a river town north of New Orleans where the population has been declining for decades, saw home sales double to 700 in the past year, even though only 12 people have used a $6,000 incentive for remote workers, said Chandler Russ, executive director of Natchez, Inc. Economic Development, which operates the Shift South remote worker incentive plan…

Tulsa’s program is often cited as a rare success story. It moved 100 people in its first year, 2019, and despite the pandemic it projects another 950 moves this year. Along with cash incentives up to $10,000 for living in Tulsa at least a year, the program offers a free trip to check out the area and intensive social networking in person and online…

A new study by the Economic Innovation Group, a Washington, D.C.-based research organization, found the new workers created almost $14 in new local labor income — a measure of earnings by employees and business owners — for every dollar spent on relocating workers, adding $62 million in earnings by the workers themselves and the jobs created to support them in 2021.

It sounds like more data and time is needed to figure out whether the incentives lead to increased populations and, if they do, how and/or at what cost or benefit.

But, I could imagine many communities and their leaders would be interested in offering such incentives even if the data suggests they do not do much. Why? It is an actionable step that sounds like it should work. The community can lead with the incentive in their marketing. If people or businesses are looking to move, wouldn’t an incentive help encourage a particular decision? At the least, such an effort would get the name of the community out in front of the public or other interested parties.

Some of the other tidbits from the article cited above are interesting. Incentives could target particular kinds of residents or businesses. Increased housing costs could make an incentive worth very little. Could we imagine a future where potential residents negotiate with several communities in order to get a better deal? Just as businesses negotiate for tax breaks and communities compete with each other, why not residents?

2 thoughts on “Some hints about the effectiveness of relocation incentives offered by American communities

  1. Pingback: Both wanting to be and limit the effects of being the next popular city | Legally Sociable

  2. Pingback: Why people do not flock to the American cities that keep showing up in the most affordable places to live | Legally Sociable

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