The WFH Exodus Creates an Opportunity for Small Cities
Much has been made of the pandemic-era exodus to Lake Tahoe, Martha’s Vineyard, or Aspen. White-collar workers, freed of the constraints of the office, last year decamped for more skiing- and hiking-friendly climes—the pandemic’s Zoom towns. The locals were annoyed. The labor market was reordered. American life changed irrevocably. Or so the story goes.
But more recent data suggests that Zoom Town USA looks a lot more like Alameda County, California, across the bay from San Francisco. Eighteen percent of those who moved out of San Francisco last year landed there, just a subway, bus, or ferry ride away. Ditto for smaller cities surrounding Boston—Natick, Worcester, and Weymouth.
According to Postal Service data crunched by the real estate firm CBRE, those who picked up stakes during the pandemic were less likely to hightail to the hinterlands than to move to neighboring, less-dense cities, slightly farther from the downtown core. A CityLab analysis found that 84 percent of the people who moved out of the country’s 50 largest cities between March 2020 and February 2021 stayed within the same metro area. An additional 7.5 percent stayed within the same state.
An analysis from the University of Chicago published last week suggests that these office exiles will continue to work from home. Using a series of surveys from 30,000 working-age Americans, researchers estimate that 20 percent of post-pandemic workdays will happen at home, compared with 5 percent before the virus.
That suggests one legacy of the virus could be an upside for smaller cities and bedroom communities. More people might stick around home base—and spend money there. The same Chicago research estimates that the long-term shift to working from home will reduce spending in city centers by 5 to 10 percent. But people will spend somewhere.
“People who are working from home still want to go out, either during the day or after work, and they still want to spend their money on interesting things and interesting places,” says Bill Fulton, who directs Rice University’s Kinder Institute for Urban Research. “If you move from San Francisco, you’re not going to want to spend all your money at Applebee’s, right?”
Tracy Hadden Loh, a fellow at the Brookings Institution who studies real estate development, puts it another way: “I think annoying people with laptops are going to be everywhere. They’re coming for your favorite spot.”
The changes have elected officials, city planners, and developers mulling how to plan for this still-hazy future—and asking plenty of questions. Who will live here? Who will work here? Who will drive or take transit here, and when? Most essentially: What kinds of housing should we be building and for what sorts of people?
MassINC, a Massachusetts think tank that focuses on pro-middle-class economic development in the state, this month suggested that employers considering a “hybrid” working model—a mix of in-office and work-from-home employment—consider putting satellite offices in the state’s smaller cities, many of which have empty storefronts. It’s a win-win, the think tank says: Companies get bigger office space, without the Boston rents, and smaller places get more tax revenue from commercial tenants and the money workers spend while hanging around a few days a week.
“This is an opportunity for these smaller cities to reposition themselves and capture some of the growth from folks who may want to not live right in the middle of the city anymore,” says Andre Leroux, who leads the group’s Transformative Transit-Oriented Development program. Places such as Lowell, Springfield, and Worcester do not need to be smaller branches of Boston, he says. “They can assure their historic places as hubs of their region.”