You are currently viewing Fad or the Future? Urban Flight’s Impact on Suburbia and Rural America

Fad or the Future? Urban Flight’s Impact on Suburbia and Rural America

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Even before the COVID-19 pandemic, some major urban centers were starting to hollow out. High housing costs, worsening congestion, increasing crime rates and poor health statistics were just a few reasons why. The pandemic accelerated this trend – pushing urban residents out of big cities into rural and suburban areas. They wanted lower costs of living combined with more freedom and more space to raise children. The rise of remote work made rural living possible for more Americans, but our shifting priorities made permanent moves more and more attractive. 2021 saw this trend hit a fever pitch. In a March 2022 article for The New York Times, Robert Gebeloff, Dana Goldstein and Winnie Hu explain. Referencing Census Bureau data, they write that “substantial population loss in some of the nation’s largest and most vibrant cities [made 2021] the slowest year of population growth in U.S. history.” Once incredibly desirable destinations, LA, New York, Chicago and San Francisco saw city dwellers leave in droves last year. They fled to relatively inexpensive exurban and rural areas of South Carolina, Texas, Georgia and Idaho. Gebeloff et al. write that this new “pattern is a notable contrast from a decade ago, when large cities were growing, bolstered by…the rising popularity of urban living.” Today — according to a Pew Research Center survey – more than one in three adults would prefer living in a rural area. In 2018, about a quarter said they would prefer living in the city, but in 2021 that dropped to about one fifth. In this post, we take a look at why so many Americans are moving from city centers to rural and suburban counties. We also consider urban flight’s impact on suburban and rural communities across the country. 

Terms to Know

Gateway Community

Over the last few years, resort towns across the country have not only attracted visitors.

Over the last few years, resort towns across the country have not only attracted visitors. They have also attracted urban transplants. This trend exploded during the COVID-19 pandemic – so much so that the National Park Service ​​dedicated the first half of 2020 “to webinars that cover issues and challenges experienced by parks’ gateway communities.” Many of these webinars aimed to help gateway communities find ways to balance tourism and population booms with conservation and sustainability. 

According to this resource from Scenic America, “gateway communities are communities that provide access to federal lands, and they play a key role as entry and exit points for attractions like national parks.” Gateway communities not only provide access to national parks and other attractions. They also “provide hospitality services and recreational activities in addition to what is available in parks.” 

Mammoth Lakes, California is a gateway community for Yosemite National Park while Jackson, Wyoming is a gateway community for both Grand Teton and Yellowstone. Unsustainable development in gateway communities could threaten the health of our national parks while making these communities unaffordable for locals. Thus, sustainable development remains a goal for these areas as new residents move in.

Zoom Town

The term “zoom town” is an adaptation of the older term “boomtown”

The term “zoom town” is an adaptation of the older term “boomtown,” which was coined in the late 19th century. Boomtowns were small, undeveloped communities that experienced major “booms” in population and influxes of wealth. From the late 19th century to the early 20th, most boomtowns were formed when settlers found an abundance of valuable natural resources like oil in Texas and Oklahoma or gold in California and Nevada.

“Zoom towns” are small cities as well as rural and suburban communities currently experiencing economic and population booms due to the rise of remote work. Greg Rosalsky explains in his 2020 broadcast “Zoom Towns And The New Housing Market For The 2 Americas” for NPR’s Planet Money. Putting it simply, Rosalsky defines zoom towns as “places that are booming as remote work takes off.” 

Predictably, the name comes from popular video conferencing platform Zoom. These destinations tend to be resort towns and other exurban areas that are close to amenities and other attractions but far less populous than city centers. The number one key to becoming a Zoom town, however, is high-speed internet.

Exurb

residents headed to suburban and exurban areas with more space and lower costs of living.

As noted above, several major urban areas lost residents in 2021. These residents headed to suburban and exurban areas with more space and lower costs of living. Chances are, you can picture suburbia and rural America, but can you picture the exurbs? 

In a May 2022 article for Realtor.com, Nikki Gaskins explains the difference between the exurbs and the suburbs. Gaskins writes that “suburbs lie just outside of the city, whereas exurbs are areas farther out, beyond the suburbs.” Exurbs are typically “situated in more rural areas…near farmland or even the beach.” Compared to suburbs and cities, exurbs “tend to be spread out and less walkable” but provide rural residents with more privacy and space. 

The Donut Effect

Another self-explanatory term, the “donut effect” refers to the hollowing out of city centers

Another self-explanatory term, the “donut effect” refers to the hollowing out of city centers and the simultaneous growth of surrounding suburbs and exurbs. Some refer to this abandonment of metropolitan areas as “urban flight.” Many of America’s cities suffered from the donut effect during the COVID-19 pandemic. Some have since recovered, while others have continued to drain. In their 2021 paper “The donut effect: How COVID-19 shapes real estate” for Stanford’s Institute for Economic Policy Research (SIEPR), Arjun Ramani and Nicholas Bloom explain this urban population dispersal.

Ramani and Bloom write that “housing demand within cities is shifting from dense urban centers to more spacious suburbs.” At the same time, “commercial office occupancy rates [are] plummeting and commercial property prices [are falling].” They note that “underneath these aggregate trends lie a substantial reallocation of demand away from city centers toward city suburbs for the largest metro areas in the U.S.”

The donut effect refers to “rising prices in the suburbs and slumping prices in major city centers being hollowed out.” The pandemic accelerated existing migration patterns by highlighting a lack of urban housing inventory and growing health concerns while promoting remote work and the need for more space. 

Counterurbanization

ounterurbanization refers to “the net decline of the cities and net growth of the more accessible rural areas

According to P. Boyle in the 2009 edition of the International Encyclopedia of Human Geography, counterurbanization refers to “the net decline of the cities and net growth of the more accessible rural areas beyond the city limits through migration.” Boyle notes that researches “often suggest that this was caused by a mixture of factors including quality-of-life decisions, economic restructuring, and industrial (re)location.” Today, counterurbanization is also likely due to “quality-of-life decisions.” Americans now favor the tight-knit communities, lower crime, lower cost of living and relative privacy of rural life.

Where Are People Moving?

large metropolitan areas around the country are losing residents

As briefly outlined above, large metropolitan areas around the country are losing residents while smaller cities, suburbs and exurbs are gaining new residents. Writing for Bloomberg in their April 2021 article “More Americans Are Leaving Cities, But Don’t Call It an Urban Exodus,” Marie Patino, Aaron Kessler and Sarah Holder write that “82% of urban centers saw more people moving out than in [and] 91% of suburban counties saw more people moving in than out.” 

Urbanites are not just moving to the suburbs, however. Rural areas might be outpacing suburban areas. In their April 2022 article “Americans are moving out of urban counties like never before” for Yahoo! Finance, Grace O’Donnell and Adriana Belmonte write that in 2021, “exurban counties saw the biggest increase across the board, with about 80% gaining population.” In fact, last year “‘non-metropolitan rural counties [saw] the highest population gain since 2008.’”

Most residents remained in their current region, not venturing far past the cities they once inhabited. Of course, this was not true of all metropolitan areas. The City of San Francisco experienced a 23% increase in permanent moves away from SF.

Referencing US Postal Service change-of-address data in their April 2022 article “10 States People Are Fleeing And 10 States People Are Moving To” for Forbes Home, Deane Biermeier and Samantha Allen write that Americans are fleeing California, New York, Illinois, Pennsylvania, Massachusetts, Washington State, Colorado, Indiana, Wisconsin. 

Residents are moving out of these states and into Texas, Florida, South Carolina, North Carolina, Georgia, Tennessee, Nevada, Maine, Delaware and Idaho. According to Biermeier and Allen, “the top seven moving destinations” are in the South, where “taxes tend to be low and sunshine is abundant.”

Popular Zoom Towns

Earlier in this article, we defined “Zoom towns” as destinations for remote workers. They are often smaller cities, suburbs and exurbs with great internet access and many amenities, but without the negatives commonly associated with big city life. Resort towns are frequently recast as “Zoom towns.” 

Quoted in a December 2021 article from The Economist, UpWork’s Adam Ozimek estimated that “14m to 23m Americans may relocate due to the rise of remote work.” This estimate “amounts to between 9% and 13% of today’s workforce.” 

Zoom towns already experiencing an influx of transplants include a number of suburbs and exurbs outside the Denver, Dallas, Seattle, San Diego and San Francisco metropolitan areas. Reno, Nevada, Bozeman, Montana, Truckee, California, Jackson Hole, Wyoming, Lancaster, Pennsylvania and Rochester, New York are all well-known Zoom towns. 

While transplants might enjoy the comparatively low housing costs and large plots of land, locals might not be as pleased. Some Zoom towns could benefit from this urban exodus, while others could suffer. We explain this in further detail below.

Why Are Americans Leaving Urban Centers for Suburban and Rural Communities?

According to The Economist’s December 2021 article “Why Americans are rethinking where they want to live,” internal migration is currently “following two trends.” The first trend is that “people have been leaving large, dense, expensive urban cores for smaller, less-dense” suburbs and rural areas. The second trend is that “people and companies have been moving to warm, low-tax states in the South and Southwest.” 

Though these trends were bolstered by the global health crisis, both “existed before the pandemic.” A lack of affordable housing options, rising crime and increasing congestion all encouraged urban dwellers to move to smaller cities long before the pandemic started.

To Escape Affordable Housing Crises

Lack of affordable housing is one main cause of this urban exodus.

Lack of affordable housing is one main cause of this urban exodus. In their March 2022 article “Cities Lost Population in 2021, Leading to the Slowest Year of Growth in U.S. History” for The New York Times, Robert Gebeloff, Dana Goldstein and Winnie Hu explain. Gebeloff et al. write that in 2017, “counties ranking above the 90th percentile for housing stress…accounted for a third of the nation’s population growth.” When measuring “housing stress,” researchers are dividing housing costs by household income. The higher the number, the more extreme that area’s housing stress. 

The fact that counties with the greatest housing stress also had significant population growth in 2017 implies “that the high prices represented high demand.” In 2021, this trend reversed and “those counties were net population losers.”

For Relief from High Taxes and Strict Regulations

Another reason why urban counties are losing remote workers

Another reason why urban counties are losing remote workers and other residents is their comparatively high taxes and strict regulations. According to The Economist, “the places attracting people share…friendliness toward business.” Writing for Forbes in January 2021, Jack Kelly elaborates. Kelly writes that “the top ten states that people have migrated to tend to [have] little or no state taxes [and] business-oriented governments.”

To Be Part of a Safe, Tight-Knit Community

To Be Part of a Safe, Tight-Knit Community in rural areas

Small towns have stolen residents from urban areas in part because they offer relatively safe, tight-knit communities. In their December 2021 paper “Americans Are Less Likely Than Before COVID-19 To Want To Live in Cities, More Likely To Prefer Suburbs” for the Pew Research Center, Kim Parker, Juliana Menasce Horowitz and Rachel Minkin explain. Parker et al. write that the share of American adults who say it is “very important to them to live in a place with a strong sense of community” has increased over the last five years. 27% of respondents said a sense of community was of major importance in 2018, but 32% said the same in 2021. 

According to Parker and colleagues, “this is especially the case among those who live in urban and rural areas (up 8 and 10 percentage points, respectively).” The share of American adults who say living in a community near outdoor activities is “very important to them” has also increased from 2018 to 2021. Most important, however, is living in an area that is safe and healthy for children to grow up in. Nearly 60% of respondents said this was very important to them.

For More Space and Privacy

As one might imagine in our post-pandemic world, many Americans want more space

As one might imagine in our post-pandemic world, many Americans want more space in and around their homes – especially outdoor space. Demand for larger properties has surged over the last two years. In 2020, sales of large-sized homes were up 21% compared to medium-sized homes, which were up only 10% according to Redfin

At the same time, home prices in rural areas were increasing at a faster rate than those in urban areas because rural housing fit the bill. Offering more acreage per lot, it makes sense that rural communities would become a preferred residential environment. In his paper “The Rural Migration Trend: What to Make of It, Why It’s Happening and Where It’s Headed” for the Association of Equipment Manufacturers (AEM), Danny Gavin notes that this trend shows no signs of stopping. Gavin writes that “Americans are moving to rural areas in ever-increasing numbers, reflecting their increased desire to seek out more space.”

Americans who plan to stay in their current homes also want more breathing room. This year, a significant share of renovations are about “adding more space” to existing homes. Referencing a recent survey conducted by Zillow in an article for Money.com, Leslie Cook writes “projects that add livable space are among the most popular on homeowners’ wish lists for 2022.” 31% of survey respondents say they are considering adding an office to their home, while 23% plan to finish their attic or basement. Another 21% are hoping to build an ADU (accessory dwelling unit).

Impacts of Urban Flight on Suburbs and Rural Areas of the US

Urban flight impacts cities, suburbs and rural areas all across the United States, but each community will likely react differently to the net gain of new residents or the net loss of past residents. 

For some, the outcome might be positive. An influx of remote workers in Zoom towns – mostly suburban and rural communities – could stem the brain-drain these neighborhoods have suffered over the last few decades. It could revitalize communities that had experienced economic decline and repeatedly lost residents. 

For others, the outcome might be negative. The infrastructure of many small towns – including utilities, public schools, hospitals, highways and groceries – cannot accommodate a sudden boom in population. An increase in wealthy migrants could also make these towns unaffordable for locals by raising rents and boosting property values. 

For many, the outcome of population loss or gain will be a mixture of both. Below, we explore the impacts of urban flight on suburban and exurban areas of the US as they welcome – or reject – new residents.

Infrastructure

As noted above, the infrastructure of many small towns is ill-equipped

As noted above, the infrastructure of many small towns is ill-equipped to handle a sudden influx of migrants. In Idaho, the city – and Zoom town – of Boise is a great example of this issue. According to Anna Rahmanan in a recent article for TimeOut.com, Boise now has the worst rush hour traffic of any city in the United States. Its morning and evening commutes are worse than those of Los Angeles, San Francisco and New York City. The highways and cross-streets of rural and suburban neighborhoods are not the only infrastructure suffering.

Earlier in this post, we noted that urbanites tend to leave their metropolitan homes behind in pursuit of lower taxes, better weather and cheaper housing. In an April 2022 article for Business Insider, Kelli María Korducki notes that the “lower taxes” in their target destinations could be sabotaging suburbs and exurbs. Korducki writes that “the low taxes behind the flood of high-earning interlopers also make municipalities poorly equipped to accommodate them; smaller revenue pools mean less public spending.”

Families from neighboring states and major metropolises are pouring into these smaller cities and rural areas, but their tax dollars rarely follow. Over time, this could lead to poorly funded schools, hospitals and other infrastructure.

Cost of Living

Another major concern is cost of living in exurbs and suburbs

Another major concern is cost of living. When wealthy urbanites – many of whom are remote workers – move into small cities, suburbs and rural communities, they tend to price-out locals. In her recent article “Welcome to America’s new ‘Zoomtowns’” for Business Insider, Kelli María Korducki writes that “the dearth of affordable housing in the Sun Valley town of Ketchum” was so dire last summer that the mayor was forced to act. In response, Ketchum, Idaho mayor Neil Bradshaw floated a plan to lawmakers “that would allow teachers, nurses, and other essential workers to set up a tent city, so they could continue to serve the community they could no longer afford to live in.”

Housing Costs Soar

Clearly, the price gap between major cities and the suburbs and exurbs that surround them is shrinking. According to Zillow economist Alexandra Lee – who was quoted in the November 2021 NPR broadcast “The pandemic has sparked rising house prices across the rural U.S.” from KCUR 89.3 – “rural home prices are up around 16% [on average].” Lee notes that this is “the first big price spike in anyone’s memory.” In some small towns, price hikes are between 20 and 30%. 

Referencing a recent report from Realtor.com in a November 2021 article for Fortune, Chris Morris identifies similar trends in the nation’s suburbs. Morris writes that “the number of suburban home shoppers has surged 42.1% since the onset of COVID-19…[and] the intense competition in the suburbs has led to suburban homes appreciating faster than urban homes.”

In September of last year, the median price per square foot of homes listed in the suburbs reached $212, which Morris writes was 18% higher than the year prior and “28.4% higher than the 2019 level.” Rents are rising too. Unfortunately, these housing cost increases have forced out locals – many of whom were previously planning to buy houses in their hometowns.

Inequality

Others argue that remote work will improve the economic prospects of fading towns

Some economists argue that an influx of metropolitan migrants to smaller cities, suburbs and exurbs will increase inequality in these areas by pricing locals out of housing markets. Others argue that remote work will improve the economic prospects of fading towns. In their March 2021 essay “How Remote Work Is Reshaping America’s Urban Geography” for The Wall Street Journal, Richard Florida and Adam Ozimek explain. 

They write that “in the decade and a half leading up to the Covid-19 pandemic, more than 90% of employment growth in America’s innovation economy was concentrated in just five coastal metro areas.” These include “San Francisco, San Jose, Seattle, San Diego and Boston.” Small cities, suburbs and exurbs experienced major brain-drain as young professionals abandoned their hometowns for these metros. These professionals took their tax dollars with them, pulling precious resources away from the areas that needed them. 

Florida and Ozimek argue that “remote work severs the age-old connection between where people live and where they work” – opening up new opportunities for employees but also to businesses, small towns, suburbs and rural areas. With remote work releasing “skilled techies and knowledge workers” from urban areas, they might choose to live in sprawling suburbs or nature-rich rural communities. According to Florida and Ozimek, “such changes may begin to reverse the increasingly winner-take-all nature of America’s economic geography.”

In her January 2022 opinion piece “Work From Home Isn’t Just for Elites. It’s the Revolution Rural America Needs | Opinion” for Newsweek, Skylar Baker-Jordan agrees with Florida and Ozimek. She writes that “remote work has the potential to transform the rural economy.” It could finally bring “autonomy and stability to communities which have experienced massive upheaval over the past half-century or more.”

What About Cities?

Curious about the impact urban flight could have on major metropolises? Stay tuned for an upcoming post about how housing markets in cities across the US are reacting.