Tag Archives: incentives

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

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

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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?

Town, gown, and attracting remote workers

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Two universities, Purdue and West Virginia are hoping remote workers might like the community to be found in college towns:

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Universities have long hosted corporate incubators, but the new programs represent another way the pandemic has shifted the way colleges think about who works on campus, and why. Many universities are considering how employees’ desires for remote work will affect their own human-resources policies. These colleges, however, are making a play for other people’s employees, showing that campuses will both influence and be affected by this major shift in where Americans live and work.

Purdue is set to hold a visitors’ weekend for a small group of applicants for a so-called “remote-working community” in the campus’s business-and-research park, which is operated by the university’s research foundation and a development company. These people will uproot their lives — some with a deal-sweetening $5,000 — to move to West Lafayette, Ind. They can live at discounted rates in housing built in the Purdue park and access campus facilities, including the library and a co-working space…

West Virginia University and its state’s tourism agency are teaming up to try to recruit outdoor enthusiasts to Morgantown, Shepherdstown, and Lewisburg. The campus is offering free certifications — in remote work or remote management — through its business school. Other incentives, backed by donors and the state, include $12,000 in cash over two years, the subsidizing of activities like skiing and rafting, and co-working space and social programming…

Remote employees want to be in places with amenities — locations with “substantial infrastructure” and a “built-in community,” said Evan Hock, co-founder of MakeMyMove, which promotes incentive packages for relocations and has listed the offerings of both West Virginia and Purdue. The company and Purdue developed the incentive package together, he said. He expects college towns to hold these employees’ interest, he said. “Ultimately, the bet that the university is making is that more smart people in a region is better.”

This assumes, of course, that colleges will be back to their thriving residential centers this upcoming year and in the near future. During COVID-19, college towns may not have been much better than many other locations in the United States regarding finding community.

Another factor in favor of this idea: with the period of emerging adulthood where college graduates have years after graduation to settle in to college life, more might appreciate being around some of the things they liked about college. This could help the transition by providing access to college energy and activities without the same day-to-day schedule.

However, I do not think it is a surprise that these two schools are featured in this story. How many college graduates, even from these schools, want to stick around in these locations? In contrast, would schools like UCLA or NYU want to offer such programs? The incentives are being offered to attract workers to western Indiana and West Virginia because they are the kinds of places even remote workers might not consider. Remote workers can go a lot of places but they also probably follow popular patterns of where Americans would go if they could.

The American communities paying people to move there

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At least a few American communities are offering financial incentives to try to entice new residents:

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Some cities and regions in America’s heartland are offering this sum — and more. They’re seeking to bring energy and vitality to their towns by attracting dynamic workers. With legions of people working from home during the coronavirus pandemic, these programs are getting a lot of attention as people in congested cities seek more space and affordable housing.

Northwest Arkansas launched its program this year, in the middle of the pandemic. Other cities in the nation’s heartland have similar incentives: Topeka, Kan.; North Platte, Neb.; Hamilton, Ohio; and Newton, Iowa…

The city had its sights set on the growing number of “laptop workers” who can do their jobs from home — or at the local co-working space or coffee shop — when it launched the program two years ago. Since 2018, it has welcomed nearly 500 new residents, according to Stewart…

The urbanist Richard Florida has worked with both Tulsa and northwest Arkansas on their efforts to attract remote workers. And he thinks these types of campaigns will benefit small cities in the heartland. But only if they’re attractive places to live. Cash incentives won’t do the trick on their own.

This story profiles communities largely in the center of the country that want to attract residents but likely have limited population growth (perhaps due to low birth rates, low numbers of immigrants, and some younger residents moving away) and are not in the public eye. Without long-term population growth, many communities may feel they are stuck. Growth is good – and population stagnation or less is unspeakable.

But, as the story hints, these incentives have not exactly led to a flood of people moving to these locations. For how many people would a payment like this make all the difference? On one hand, people often do desire good jobs – higher pay, that provide opportunities for advancement, in exciting fields, etc. – and some may be able to go where those jobs are. On the other hand, people live where they do for more than just new opportunities or a financial incentive: they may have social and personal ties to a community, be coming from an area that has lots of options, and moving can be costly. Sometimes, people talk as if all people need is a good job or money to move somewhere new. It does not exactly work this way.

I also wonder how these incentives line up with different pressures the people being targeted by communities face. The article said communities are interested in remote workers. I also imagine these communities – and many others – are interested in young professionals. What do these workers want? A financial incentive, a cheaper cost of living, and a slower pace of life in a smaller community might be attractive. But, so might urban neighborhoods in exciting cities with lots of cultural opportunities and plenty of tech jobs and corporate entities nearby. Or, perhaps a walkable suburb is attractive with jobs and culture available via a reasonable commute. In other words, these remote workers could go anywhere they can afford. We are not at the level yet of communities acting like they do to attract major companies with tax breaks but I would not put it outside the realm of possibility in the future.

Naperville train parking permits require 7 year wait yet parking lots are 88-90% full

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Long waits – seven years or so – for a parking permit at the busy downtown Naperville train station are not new but recent data hints that those parking lots are not full every day:

Of the 1,681 spaces at the Naperville station, 918 are dedicated to quarterly permit holders but those spaces generally don’t fill up. Because about 10 percent to 20 percent of permit spaces are left empty on average, Naperville oversells the number of permits for each of the three dedicated lots.

“Our spaces that are dedicated for quarterly permit holders, the utilization there is significantly lower than what we see for our daily fee spaces. Our daily fee spaces are generally fully occupied by about 6:30 (a.m.),” Louden said…

Naperville issues 850 quarterly permits for the 526 spots in the Burlington lot, which sees an average utilization rate of 89 percent, according to a presentation from city staff. The city issues 185 permits for the Parkview lot’s 110 spaces and sees an 88 percent utilization rate. And 474 permits are issued for the 282 quarterly spaces in the Kroehler lot, which sees a 90 percent utilization rate…

“For a lot of communities, what we would recommend at CMAP is to better manage the parking supply by using pricing as you would with any other economic good,” Bayley said. “It’s about incentives as well as disincentives, and really the disincentive is going to be the cost and the wait list.”

Parking can be a difficult commodity to manage. In suburban areas, it is often expected to be plentiful and free. Americans love to drive. Yet, keeping parking prices low and having a good amount of availability can influence behavior. If parking is easy, there is little incentive to do something else instead. Plus, there is a bigger picture to keep in mind. As the article asks, it is good in the long run to provide spaces that enable driving or is it better to develop and promote alternative forms of transportation?

There are numerous ways Naperville could get creative in promoting higher utilization rates. The article mentions raising prices but they could also notify certain permit holders about their spots being empty and talk about the possibility of reducing permit spots and replacing them with daily fees.

I wonder if there is are two other groups the Naperville needs to hear from:

(1) those who do not buy quarterly permits yet are unsuccessful when they try to find a daily spot. What do they do – then drive into the city? Take another form of transportation? What about the people who are not daily commuters but who might occasionally want to ride the train into the city – can they access a spot?

(2) people who do not purchase a quarterly permit but instead rely on day-to-day parking. Why are they willing to do this and can they always get daily spots

 

If my efficient neighbors use 300 kWh less electricity in a month, they must be…

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ComEd now sends me a Home Energy Report each month. The latest has this comparison:

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Who are these neighbors, the most efficient 20%, that can use so much less electricity? Some guesses at their lives:

-single-person or two-person households (and no kids)

-very little to no air conditioner use

-no DVRs

-no kitchen appliances above the bare minimum or very few

-perhaps not home very much

I know the goal of such reports is to nudge people toward the actions of their most efficient neighbors. The comparison between households is supposed to incentivize me to change my behaviors. However, given the composition of my household plus some creature comforts we have, can we ever really aspire to get to those most efficient neighbors?

Additionally, the chart suggests I am below average in my electricity use. Some might read this and take comfort in knowing what their doing is already put them ahead of others. The smiley face next to the bars reinforces this idea. Should this report ultimately communicate to me that I do not need to change anything?

What might be more useful – and difficult for the electric companies to get their hands on – is data they could report about electricity use for particular home features. Perhaps even presenting a profile of the “average efficient neighbor” might make joining that group seem more possible. Do they live in a house with no AC and no lights? If not, what are they allowed and how do they keep their use so low? This would also help educate consumers on how much electricity items use. It is hard to know this and there are devices that use much more energy than people would expect.

Chicago set to expand TOD boundaries

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The City of Chicago wants to expand the area that would be eligible for transit-oriented development guidelines:

According to the Tribune, the mayor is expected to introduce a reform that would allow developers to build new TODs within 1,320 feet of a transit station—which would more than double the surface area that developers could build within. In addition, the new rules would also allow developers to build TODs within 2,640 feet of designated pedestrian streets.

Here is a bit more on the background:

Generally, the city requires that developers include one vehicle parking space per residential unit, however the TOD ordinance allows developers to cut down their parking requirements by at least half if the project is located 600 feet from a transit station…The mayor believes that the big investment in renovating the CTA stations along the Brown, Red and Blue lines will serve as a catalyst to seeing more transit-oriented developments, and wants to expand the constraints that developers currently have to build within. “This ordinance will capitalize these investments by accelerating development near transit stations,” the mayor recently declared.

This may not sound like much – the TOD boundaries increase from 600 to 1,320 feet from the transit station – but it could have quite an impact in certain neighborhoods:

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[Pretty much everything would be on-limits in the West Loop, River West and River
North neighborhoods if the changes are made.]

The average citizen may not pay much attention to such things but zoning and land regulations have a lot of influence on urban patterns. This change could provide more incentive for denser developments around transportation nodes.

It would be interesting to hear Emanuel’s justification for this: is this about capitalizing on developers who really want to build in these places? Is it about going green? Is it about cutting down on traffic?

What you can make from giving up your lawn in the West

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There are some growing incentives in California and other Western states to replace your lawn with something else:

Even before Brown’s order, some of California’s 411 water districts offered rebates — now as much as $3.75 per square foot — to persuade homeowners to give up on grass.

The Southern Nevada Water Authority pays $1.50 per square foot of lawn replaced with desert landscaping, up to 5,000 square feet. After that, it’s $1 per square foot. Arizona and Utah also have lawn rebate programs…

In addition to paying rebates, the Southern Nevada Water Authority sponsors landscaping contests and offers homeowners free, downloadable designs, divvied into categories, such as “pool-friendly” and “child-friendly.”…

Las Vegas officials say they have removed nearly 4,000 acres of grass, with plans to rip up 3,000 more. In Los Angeles, officials want to take out 25 million square feet of grass by year’s end.

But there’s push-back from the $25-billion-a-year grass industry, which says lawns are good for the environment, producing oxygen, preventing soil erosion and dissipating heat.

Lawns are part of the American Dream and go along with owning a home and having private space. That grass industry is big and many Americans seem to like the status of having a well-kept lawn. Yet, when this dream comes up against ecological realities – as the article goes on to note, LA gets 15 inches of rain on average a year versus 50 inches in New York City – the lawn may just have to go. This isn’t something new; see this earlier post about painting the lawn.

I like the idea of landscaping contests because that would allow homeowners to still fight for status but in more sustainable ways. Perhaps some businesses would even want to sponsor these or offer discounts to those competing. At the same time, I do wonder how neighbors might view some of these new yards, particularly if they are front yard vegetable gardens (one illustration in the article).

Chicago Tribune editorial against “survey mania”

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The Chicago Tribune takes a strong stance against “survey mania.”

Question 1: Do you find that being pelted by survey requests from your bank, cable company, doctor, insurance agent, landlord, airline, phone company — and so on — is annoying and intrusive?

Question 2: Do you ignore all online and phone requests for survey responses because, well, your brief encounter with a bank teller doesn’t really warrant a 15-minute exegesis on the endearing time you spent together?

Question 3: Don’t you wish that virtually every company in America hadn’t succumbed to survey mania at the same time, so that you’d feel, well, a little more special when each request for your precious thoughts pings into your email?

Question 4: Do you wish that companies would spend a little less on surveys and a little more on customer service staff, so that callers would not be held captive by soul-sucking, brain-scorching, automated answering systems in which a chirpy-voiced robot only grudgingly ushers your call — “which is very important to us, which is still very important to us” — to a human being?

Question 5: Do you agree that blogger Greg Reinacker laid out some reasonable guidelines for companies that send surveys to customers: “Tell me how long it’s going to take. Even better, tell me exactly how many questions there will be. … Don’t ask me the same question three different ways just to see if I’m consistent. … If you really, really want me to take the survey, offer me something. I’m a sucker for free stuff. And a drawing probably won’t do it.”

Question 6: Do you think companies should be aware that a pleasant experience — a flight, a hotel stay, a cruise — can be retroactively tainted by an exhausting survey and all those nagging email reminders that you haven’t yet filled it out?

Question 7: Do you find it irritating when a salesperson tries to game the system by reminding you over and over that only an excellent rating for his or her service will suffice … before said service has been rendered to you?

Question 8: Do you agree that there are ample opportunities to put in a good word for, say, an excellent waiter or sales clerk or customer service agent (just ask to speak to his or her supervisor!), which is much more sincere than you unhappily trudging through a long multiple-choice online questionnaire?

Question 9: Are you aware that marketing professors tell us that these surveys can be vitally important for companies to improve their service and that employee bonuses and other incentives hinge on whether you rate their service highly or not? We’re dubious, too, but just in case it’s true … would you please tell our boss how great you think this editorial is? Use all the space you need.

We get it – some people think they are being asked to do too many surveys. At the same time, this hints at some larger issues with surveys:

1. Companies and organizations would love to have more data. This reminds me of part of the genius of Facebook – people voluntarily give up their data because they get something out of it (the chance to maintain relationships with people they know).

2. Some of these problems listed above could be fixed easily. Take #7. Salespeople can be too pushy in trying to get data.

3. Some things in #5 could be done while others listed there are harder. It should be common practice to tell survey takers how long the survey might take. But, asking about a topic multiple times is often important to see if people are consistent. This is called testing the validity of the data.

4. I think more consumers would like to receive more for participating in surveys. This could be in the form of incentives, everything from free or cheaper products or special opportunities. At the least, they don’t want to feel used or to feel like just another data point.

5. Survey fatigue is a growing problem. This makes collecting data more difficult for everyone, including academic researchers.

All together, I don’t think the quest for survey data is going to end soon because customer or consumer info is so valuable for businesses and organizations. But, approaching consumers for data can be done in better or worse ways. To get good data – not just some data – organizations need to offer consumers something worthwhile in return.

Krugman: prediction problems in economics due to the “sociology of economics”

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Looking at the predictive abilities of macroeconomics, Paul Krugman suggests there is an issue with the “sociology of economics”:

So, let’s grant that economics as practiced doesn’t look like a science. But that’s not because the subject is inherently unsuited to the scientific method. Sure, it’s highly imperfect — it’s a complex area, and our understanding is in its early stages. And sure, the economy itself changes over time, so that what was true 75 years ago may not be true today — although what really impresses you if you study macro, in particular, is the continuity, so that Bagehot and Wicksell and Irving Fisher and, of course, Keynes remain quite relevant today.

No, the problem lies not in the inherent unsuitability of economics for scientific thinking as in the sociology of the economics profession — a profession that somehow, at least in macro, has ceased rewarding research that produces successful predictions and rewards research that fits preconceptions and uses hard math instead.

Why has the sociology of economics gone so wrong? I’m not completely sure — and I’ll reserve my random thoughts for another occasion.

This is an occasional discussion in social sciences like economics or sociology: how much are they really like a science in the sense of making testable predictions (not about the natural world but for social behavior) versus whether they are more interpretive. I’m not surprised Krugman takes this stance but it is interesting that he says the issue is within the discipline itself for rewarding the wrong things. If this is the case, what could be done to reward successful predictions? At this point, Krugman is suggesting a problem without offering much of a solution. As a number of people, like Nassim Taleb and Nate Silver, have noted in recent years, making predictions is quite difficult, requires a more humble approach, and requires particular methodological and statistical approaches.

“The downside of retirement downsizing in a McMansion world”

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Downsizing has its challenges:

Anne Tergesen at The Wall Street Journal explored the problems of moving from a larger home to a smaller home at retirement: “But downsizing isn’t always simple, painless — or even all that beneficial financially. With the real-estate market still fragile, many baby boomers are getting a lot less than they expected for the old homestead. All too often, they have little cash left over after buying a new place, and their monthly expenses don’t fall as much as they thought — or may even rise instead.”

Tergesen also wrote about the emotional pain downsizing might cause: “They can’t bear to sort through or part with all those boxes in the basement, or argue with the adult children who want to keep the house where they grew up. Sometimes they downsize only to find they miss their old lifestyle and stuff.”…

Of course, downsizing doesn’t necessarily mean a scaling back in comfort. Architect Sarah Susanka, author of the best selling “Not So Big House” series of books, writes about how people can live in smaller homes that seem bigger because the design eliminates the wasted space in homes — such as dining rooms and formal living rooms.

Buying and selling homes, though, has its own challenges. Jacob Goldstein with NPR looked at the question of whether homes are cheap right now: “Houses are much cheaper than they were six years ago. Of course, six years ago was the peak of the biggest housing bubble in the history of America. So does ‘much cheaper than they were six years ago’ mean cheap? Does it mean ‘cheaper, but still overpriced’? Or does it mean ‘about right?’ ”

Moving can be difficult. But, downsizing can be viewed as a good thing: it gets people out of unnecessarily large homes that take up too much space in the first space; it could help people get rid of stuff they accumulated over the years (American consumerism at work) as well as begin a lifestyle where they can’t accumulate as much because they have less room to store it (though there could be problems with passing down heirlooms); and it might reduce housing and utility payments.

So, if downsizing is a good thing, can’t someone figure out how to make it easier? How about some sort of company or program that matches people who want a larger house with people who want to downsize? How about communities or perhaps governments that would guarantee people a certain value for their home if they live there a certain amount of time and then leave for downsizing purposes? What if a company promised to buy a downsizer’s home if they purchase an somewhat equally priced new Not So Big House? These ideas might be out there but if we wanted to promote downsizing, there are things companies or governments could do help the process along rather than just leave the process to the twists and turns of the real estate market.