A common misconception is that people abandoned urban neighborhoods in droves last year to avoid catching the novel coronavirus, which spread more easily in denser areas. The reality rather was in the other direction — most large and more expensive cities like Denver experienced a significant drop in young renters moving in.
Out of 96 metro areas studied, only three showed a very large increase in out-migration from their urban areas last year — New York City, San Francisco and Bridgeport, Conn, said Stephan Whitaker, a policy economist at the Federal Reserve Bank of Cleveland.
“Out-migration from urban neighborhoods is up somewhat, but in-migration is down substantially,” Whitaker said during a press call to discuss his research last week. “The pandemic has slowed down their pipeline of inflow.”
Denver was among the more expensive large metro areas that saw a big decrease in urban in-migration and a small increase in urban out-migration. The decrease in those moving in was 2.4 times as large as the increase in those moving out between April and September.
And it was mostly driven by young renters, not homeowners, who didn’t shift their migration patterns much, aside from favoring the suburbs, even more, when it came to buying. That shift among renters is problematic for urban neighborhoods that have high turnover and count on a steady flow of newcomers to fill vacant apartments.
To find out where people moved, Whitaker used the Federal Reserve Bank of New York/Equifax Consumer Credit Panel, which tracks address changes captured on credit reports. Those changes, reported quarterly, are more current than the annual updates coming from other sources like tax returns filed with the IRS.
Three things seemed to correlate most with urban flight, Whitaker found. First and foremost was the concentration of jobs that could be done by telecommuting. That was followed by the severity of COVID-19 in an area and the rate of small business closures in a community.
Put another way, if an urban area was hard hit with COVID-19 cases, lost the amenities that made the area attractive in the first place and if the jobs offered there could be done remotely, then it was more likely to lose population.
In another study, Whitaker looked more broadly at relocations made in the last three quarters of 2020 and compared them to the average of the last three quarters in 2017, 2018 and 2019. He divided metro areas into large, medium and small based on population, and lumped towns and rural areas in that last group. He further split the large metro category into high-cost and low-cost when it came to housing.
Metro Denver had 13,140 residents who moved to other high-cost metropolitan areas, a decline of 9.4% from the flow averaged between the last three quarters of 2017 and 2019. Another 18,920 residents moved to low-cost, large metros, which was up 3.4% from the average of the prior three years.
There were 17,640 relocations to mid-sized metros, defined as those having between 600,000 to 2 million people, a 2% decrease. The largest move, made by 36,780 metro Denver residents, was toward small metros, towns and rural areas. Migration to those less-populated areas rose by 5.6%.
On average, metro Denver took less of a hit from outmigration across all categories compared to the average for the 14 large and high-cost metros it was grouped with.
So where did people move to if they didn’t want to stay or locate to places like New York, San Francisco or downtown Denver? Florida proved an especially popular destination, with Cape Coral-Fort Meyers, Fla., seeing the largest percentage gain in migrants fleeing large, expensive metros. Sarasota and Melbourne also ranked among the top 10 relocation destinations.
Two California cities, Oxnard and Stockton, benefitted from the big city outflow, ranking second and third on the inbound list. In the Rocky Mountain region, Boise City, Idaho, was the top draw, ranking fourth overall. Austin, popular before the pandemic among those relocating, remained so during it. And Spokane, Wash., also did well.
“All changes in gross (migration) flows favored less expensive and less populous places,” Whitaker said.
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