Some evidence Americans are returning to cities in early 2021

Some Americans left cities during COVID-19. New data suggests some people are returning to those cities:

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Some data suggest a return is already underway. Cellphone tracking firm Unacast had earlier noted that phone users were shifting their overnight locations out of New York, but now sees them coming back.

“New York is growing again,” with the city adding a net 1,900 people in the first two months of 2021 versus a loss of 7,100 in the same two months of 2019 and the 110,000 estimated by the company to have left the city throughout 2020…

Similarly, Bank of America economists wrote last week that they “don’t see evidence of a broad urban exodus,” a conclusion that combined analysis of the company’s own card spending data as well as a survey of other reports…

“Out-migration did increase in many urban neighborhoods, but the magnitudes probably would not fit most definitions of an exodus,” he wrote. “What is certain is that hundreds of thousands of people who would have moved into an urban neighborhood in a typical year were unwilling or unable to do so in 2020.”

Stay tuned for years to come: untangling these numbers and what it means for the long-term health of cities will take time as scholars and leaders collect, analyze, and interpret patterns. Was COVID-19 a blip on the long history of American cities? Will they signal a resurgence of urban life or exacerbate the issues many face in moving to major and expensive cities?

One problem in the meantime is that there are plenty of people who want to declare an answer to these questions. For those who dislike cities, the move of residents in 2020 to suburbs and other locations is evidence of the downsides of dense cities. For those who like cities, the numbers can suggest a few people left but city life continued strong and will bounce back. And because either narrative is highly politicized and connected to numerous long-standing American issues like race (example from then President Trump in summer 2020), these are not just speculations; there are people with interests who want to settle the debate over cultural narratives before the data is in.

USPS address change data for COVID-19 sheds light on urban migration

Hard data has been hard to come by regarding people leaving cities during COVID-19. Did 500,000 flee Manhattan? Did San Francisco empty out? Here is data from the CBRE report:

In this comparison of 2020 and 2019 migration data, several big cities fared the worst: San Francisco, New York, Seattle, Los Angeles, and Washington, D.C. Sacramento did well because of spillover effects from the Bay Area.

In terms of actual numbers for cities, here is a summary of the same data for New York City:

By analysing US Postal Service address changes over the last 12 months, the study reveals the greatest out-migration of people is, as expected, from Manhattan, with nine of the 10 zip codes with the largest outflows of residents in the city located in the borough…

In terms of hard numbers, the four zip codes in Manhattan from the Hudson to the East River between 42nd Street and 59th Street lost more than 12,000 residents in 2020. In 2019 that figure was less than 3,000…

The streets may have felt even emptier than the data implies, as the study only looked at permanent address changes – the total number of those who left the city for significant portions of the pandemic is likely much higher. Many more people temporarily left to stay with family or at seasonal rentals…

Talk of an exodus from New York may be a little exaggerated as 41 per cent of Manhattan residents who moved in 2020 stayed in the borough, presumably taking advantage of cheaper rents to upgrade their living space. Prior to Covid, this figure was just below 50 per cent.

The last part quoted above is important: the number of permanent address changes was smaller than it may have appeared. Plenty of people left Manhattan and other urban locations but they did not necessarily give up on their property and may return when COVID-19 fades away. Similarly, the impact on suburbs that took in new residents during COVID-19 may then also see population shifts after COVID-19 as people return to urban neighborhoods.

Planning for more Sun Belt passenger train routes

Even though the United States has struggled to build and use passenger rail between major cities, the CEO of Amtrak suggests that shift in where Americans live means there are new opportunities:

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There’s 100 million more people in the United States today than there were when Amtrak was created in 1971. And if you look about the shift of where people moved to and where they have moved from, there are 20, 25 dense corridors across our nation where Amtrak has little to no service. And that’s where people have moved to. Think about the corridors in Arizona, between Phoenix and Tucson and Flagstaff, and the route between Las Vegas and Southern California. Look at the growth that we’ve experienced in the Carolinas, for example, from Raleigh to Charlotte and Greensboro and Winston-Salem—we started the service there a couple of years ago with two trains a day, and we’re looking to grow that to six trains a day along that route.

A lot of the growth I’m talking about here would occur on corridors we already serve, but we’re only serving them once a day. Another that comes to mind is Nashville to Atlanta, with stops in Chattanooga. Try to fly that. There’s no service there. It’s a major corridor. It’s an integrated economy. I could go on and on, but I believe these areas of opportunity allow us, over the next 20-year period of time, to double our ridership.

The logic sounds similar to what has been proposed for the Midwest and other corridors in the United States: look to provide good quality passenger train service between cities where the distance means that flying is not that convenient. But, the geography in the example above has shifted from the Midwest, Northeast, or California corridors to the growing Sun Belt where there are plenty of highways but not as many other transit options.

Thinking more about these Sun Belt corridors, it seems like the Amtrak service is waiting for a critical mass of potential riders as opposed to thinking ahead of the population growth. Take the Nashville to Atlanta corridor. These areas have been growing for several decades: the city of Nashville boomed first in the 1960s and then has expanded from nearly 450,000 residents in 1970 to over 670,000 residents in 2019 while the Atlanta metropolitan region grew from just under a million residents in 1950 to over 6 million in 2019. Is it too late for Amtrak to get started with a thriving service or do they demand from potential riders to even consider boosting the amount of service? Imagine if Amtrak had planned for all of this five decades ago and connected the Sun Belt with numerous routes; how might this have affected population growth and transportation patterns? Could the United States have had a sprawling postwar era full of railroad passenger lines?

When new residents to an area bring a lot more money to spend on housing

A piece in the New York Times highlights what happens when residents from one part of the United States move to another. One aspect of this: the new residents can bring a lot of money with which to purchase a home.

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According to a recent study by Redfin, the national real estate brokerage, the budget for out-of-town home buyers moving to Boise is 50 percent higher than locals’ — $738,000 versus $494,000. In Nashville, out-of-towners also have a budget that is 50 percent higher than locals. In Austin it’s 32 percent, Denver 26 percent and Phoenix 23 percent.

As the commentary goes on to note, this means that prices in certain housing markets can then go up. New residents with resources compete with existing residents who may or may not be able to keep up. Several thoughts arise:

-Imagine current NIMBY practices at a national level instead of just at a local or regional level. The piece hints that people in multiple locations might want to restrict migration from California. Mass movements of people in the United States are not heard of and restrictions have been applied before.

-This presents an interesting conundrum for local officials and local planners. Growth is usually good. Until it is not the kind of growth local residents want or it is growth driven by outside forces. If communities want to grow and attract wealthier residents, are they also willing to accept the changes that might come?

-Just as some communities have requirements that developers of big projects pay fees or provide affordable housing, is there some way for a community to “tax” newcomers to help provide funds to offset changes?

-Do these patterns eventually lead to from a perpetual search for the new hot, lower cost of living location? Once Boise, Austin, and Nashville are different, what places come next – Omaha, Billings, Baton Rouge? This would take quite a while to work out but I do wonder how many attractive lower cost of living places there can be at any one time.

Do we know that 500,000 people have fled NYC since the start of COVID-19?

On the heels of much discussion of residents leaving New York City, San Francisco, and other major cities because of COVID-19, the Daily Mail suggests 500,000 people have left New York City:

vehicles on road between high rise buildings

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Parts of Manhattan, famously the ‘city that never sleeps’, have begun to resemble a ghost town since 500,000 mostly wealthy and middle-class residents fled when Covid-19 struck in March.

The number is also part of the headline.

But, how do we know this number is accurate? If there was ever a figure that required some serious triangulation, this could be it. Most of the news stories I have seen on people fleeing cities rely on real estate agents and movers who have close contact with people going from one place to another. Those articles rarely mention figures, settling for vaguer pronouncements about trends or patterns. Better data could come from sources like utility companies (presumably there would be a drop in the consumption of electricity and water), the post office (how many people have changed addresses), and more systematic analyses of real estate records.

A further point about the supposed figure: even if it is accurate, it does not reveal much about long-term trends. Again, the stories on this phenomenon have hinted that some of those people who left will never return while some do want to get back. We will not know until some time has gone by after the COVID-19 pandemic slows down or disappears. Particularly for those with resources, will they sell their New York property or will they sit on it for a while to give themselves options or in order to make sure they get a decent return on it? This may be a shocking figure now but it could turn out in a year or two to mean very little if many of those same people return to the city.

In other words, I would wait to see if this number is trustworthy and if so, what exactly it means in the future. As sociologist Joel Best cautions around numbers that seem shocking, it helps to ask good questions about where the data comes from, how accurate it is, and what it means.

If workers can live anywhere, does this increase or decrease placelessness?

A theme is emerging: today’s workers with technology and COVID-19 might be able to avoid going to an office. But, if they can live anywhere, what does this do for a sense of community and connecting to a particular place?

young male taking boxes out of luggage boot of car

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The coronavirus is challenging the assumption that Americans must stay physically tethered to traditionally hot job markets—and the high costs and small spaces that often come with them—to access the best work opportunities. Three months into the pandemic, many workers find themselves in jobs that, at least for now, will let them work anywhere, creating a wave of movement across the country.

Recessions tend to damp migration. Americans typically move with a new job already in hand, and hiring plummets during downturns. The 2008 financial crisis limited Americans’ mobility because millions of homeowners found themselves underwater on their homes, unable to sell without taking a loss.

But this time might be different. Home prices haven’t yet taken a major hit. And the forces at play are novel. Confronted with the prospect of not being able to easily fly in for a visit with an elderly parent, grown children are suddenly questioning why they live so far away in the first place.

Many newly remote workers are finding they prefer somewhere closer to family or fresh air. Others are giving up on leases they can’t afford, chasing opportunities in states that are reopening faster or heading back to hometowns.

On the side of more community and rootedness:

1. People can live in places they want to live rather than choosing a place for a job. Whether they live somewhere to be near family, find housing, enjoy the outdoors, or some other reason, workers will be inclined to invest more locally.

2. Working from home schedules can offer more flexibility, freeing people up to participate more in local activities.

3. The commute is eliminated, freeing up time as well as getting rid of the illusion that driving through an area is the same as knowing it.

4. People might stay longer in places if they can simply change jobs from afar rather than having to move when they switch jobs or careers.

On the side of less community and rootedness:

1. Spending time at a workplace can build community, both in the building as well as outside the workplace.

2. Corporate actions at the local level will connect less with employees who are not physically there and involved.

3. More businesses may have headquarters in one place (often desirable for big cities and high-status suburbs) but workforces – and all the benefits that come with it such as their spending or jobs numbers local politicians like – will be elsewhere.

On the whole, this could be good for employees who can invest more time in places of their choosing while businesses then have more tenuous connections to the places where they are officially located. In a country of suburbia (often considered non-places) and relatively easy travel, anchoring employees in places for longer could help lead to more rootedness.

“The Great Reshuffling,” “extension cords” to suburban living

New terms are arising to describe the possibility of more people moving to the suburbs with remote work becoming more popular:

green rectangular corded machine on grey wall during daytime

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Zillow Chief Executive Rich Barton has coined the coming changes in where and how workers live their lives “the great reshuffling.” Redfin’s lead economist Taylor Marr says his company is registering stronger demand in terms of homes under contract in places like Seattle and Austin, Texas, where there has been spillover from bigger cities. These are tech hubs where a lot of remote work was already happening and they have been more insulated in terms of layoffs, he said.

Zillow’s chief economist, Svenja Gudell, says she doesn’t expect residents to cut the cord entirely from their cities, but that they may opt for an “extension cord” into the suburbs where they can get more space, more outdoor areas and, of course, a home office.

To be honest, I’m not sure I like either term that much. “The Great Reshuffling” could apply to all sorts of population changes. Suburbs as “extension cord” implies that suburbs could not exist without cities; this has some truth to it but is also open to some scholarly debate.

All of this is fairly speculative at this point. Yet, given the tendencies of Americans toward the suburbs, it may not take much to push people out of cities and to more property for their money. Cities appeal to many Americans but the suburbs are the places many default to.

It is also interesting to consider what cities might benefit the most from people fleeing high prices in particular places. If the residents of Manhattan or the Bay Area or Seattle could go anywhere, where would they go? Would other locations in those metro areas prove attractive (people get to maintain their connections, access culture and familiar places) or would they leave for cheaper housing markets, family elsewhere, or locations with other kinds of amenities (warm weather, access to nature, etc.)? The ultimate winner here might the ever-expanding Sunbelt.

More on the wealthy leaving cities, San Francisco edition

The flight of some out of New York City amid COVID-19 has attracted attention. This may also be happening in San Francisco:

city skyline during golden hour

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Amid the depths of a global pandemic and financial downturn, the demand for real estate is unexpectedly rocketing in wealthy regions outside San Francisco, reports Bloomberg. Agents say that demand is soaring in affluent areas around the Bay Area such as Napa, Marin and further afield in Carmel, as people who have the means look to get away from the city. Meanwhile, the market in San Francisco and Alameda County is still well below where it was last year.

Elsewhere, Lake Tahoe has also seen a surge in real estate interest. The prospect of living out of the city on an alpine lake while maintaining a career is appealing for a new generation of young buyers, as many tech companies have signaled that remote work may be the new norm for a long time…

Meanwhile, the rental market in San Francisco has dropped significantly, with rates for one-bedroom apartments in the city dropping by 9.2% since June 2019, and hitting a three-year low.

However, buying a new home in an isolated haven in a nearby bucolic county is not an option for lower-income San Francisco residents, and some believe the trend is only exacerbating the wealth divide.

And, as noted in the final paragraph of the story, it is hard to know whether this is a long-term trend. But, this is one of the advantage of wealth and resources: residential options during times when many others are limited in where they can live. And this is not just limited to where they can live; it includes being able to travel back and forth easily, owning or renting multiple properties at the same time, and having all the resources for working from home.

More broadly, the evidence cited above is interesting in that people moving out of the city are not said to be moving very far. They are still within a drive of San Francisco/the Bay Area/Silicon Valley. Are people in the Bay Area more willing to stay close by or do they have to due to work (a need for at least some in the tech industry to be at meetings, see people and products, etc.)? Does this differ from New York City where many of those moving ended up in the suburbs while others left the metro region all together? Staying in driving distance changes the moving experience.

I am also imagining the possibility of a more significant migration than some wealthy people heading for the suburbs or other cool metro areas. What if Facebook said they want to get out of the petri dish of Silicon Valley, be a different kind of tech company that really wants to connect people, and picks up for Omaha or St. Louis or another smaller big city in the middle of the country? Clusters of organizations have particular synergies and efficiencies but if more workers are going to be at home, is there still the same need to locate near everyone else?

Related earlier post: the evidence for this happening in Washington D.C. may not be as strong.

The Chicago area’s net migration is not bad but it can’t attract new residents

The newest Census data suggests both Chicago and the Chicago region are losing residents. But, it may be less about people moving away and more about an inability to attract new residents:

ChicagoAreaPopulationChange2019

Some experts note the metro region also isn’t attracting enough newcomers to make up for people who move away. Immigration from other countries also has long helped stem population loss, but in recent years this influx has been less robust, according to census estimates. Meanwhile, birthrates are slowing statewide, which means there are fewer new residents to make up for other losses…

“We don’t have a particularly high rate of just out-migration, but very few people come here relative to our population, compared to the rest of the country,” said Daniel Kay Hertz, research director at the Center for Tax and Budget Accountability.

Using numbers from the 2015 American Community Survey, conducted by the U.S. census, his agency found that Illinois ranked in the middle of the pack nationally on the rate of people leaving the state, but was third from the bottom on the rate of people coming in…

“The narratives around the state matter and can shape people’s decisions,” Hertz said. “And the ones in Illinois are really, really, really negative in ways that I think overstate some of the issues relative to other places.”

Any major metropolitan area is going to have some people moving out as they get new job opportunities, see greener pastures elsewhere, move for family reasons, and so on. The goal then is to also attract new residents even as some are moving out. Population increases come from new residents plus more births than deaths.

This one expert cited above hints at an interesting conundrum for any city or region beset with population loss or narratives of decline: how do you reverse the trend once it starts picking up steam? As noted, the narratives both within and outside the Chicago region and Illinois are not good: pension debts, inequality, corruption, social issues that have lasted decades, higher taxes, a lack of innovation, not a business-friendly climate, harsh winters, important but bottlenecked infrastructure. If Chicago was the exemplar American city at the turn of the twentieth century, that is no longer the case. Other cities are on the rise, particularly in the Sunbelt stretching from Washington D.C. (with the expansion of and attention paid to the federal government, perhaps now truly the second most important American city) to Houston (whose population keeps growing and may soon surpass Chicago).

It is hard to know exactly how much the larger narrative pushes people to avoid the Chicago area in favor of other places. At the same time, status matters. People and businesses want to go to places that are on the way up, that are gaining people, that have an energy moving toward the future. Chicago and its region still have a lot to offer. For example, millennials still like portions of Chicago for their thriving cultural scenes plus relatively cheap housing compared to other major cities. Perhaps Chicago’s long-term fate is to roughly stay the same at the center of the Midwest region, a significant portion of the country that may also be losing population and status.

Secondary cities attractive but have a ways to go to catch biggest US cities

New data from Redfin suggests Americans are moving to secondary big cities:

Nashville, Sacramento, Atlanta, Phoenix, Austin and Dallas are among the top-10 cities with the largest influx of new residents, according to new data from the Redfin real estate brokerage…

“People in the coastal markets are just fed up with double-digit price increases, and they’re moving to a commuter town or to the middle of the country,” said Daryl Fairweather, chief economist for Redfin. “In our most recent ‘hottest markets’ report, Indianapolis tied for third place with Boston among the cities where homes go under contract fastest. People are moving there from Chicago, Los Angeles and the Bay Area because it’s affordable.”…

“It’s the combination of affordable housing and jobs that are causing people to move,” said Daren Blomquist, senior vice president at ATTOM Data Solutions, an Irvine, Calif.-based property database.

“In places like Tampa, Dallas and Las Vegas, there’s a booming economy, with lots of jobs, along with relatively affordable homes. You can cut your housing costs in half if you move to Dallas from Los Angeles and there are jobs there, too.”

The United States has now had a decades-long hierarchy of the largest cities: New York, Los Angeles, Chicago. It would be interesting to see if other regions could challenge those top three in terms of population or status/importance. I have written before about the case that could be made for Washington, D.C. but it also has relatively expensive housing and may be considered a secondary city. In population, Chicago has lost ground compared to Toronto and Houston may overtake it soon. But, does Houston or Toronto have the same status? Most of the locations on the list above of secondary cities are Sunbelt cities with relatively recent population growth and/or importance. Can a place like Phoenix or Nashville or Dallas translate these changes into global city status? It would take a lot of work and changed perceptions.