Is Social Distancing Reversing Urbanization After COVID?

Living in a large city isn’t so fun anymore.

In a movement that may be growing as the Covid-19 pandemic forces more people to work from home, more people are moving out of urban areas to small towns.

It’s called reverse urbanization, and it could affect the future of work and how governments respond to their citizens.

Reverse Urbanization Is Not So New

Even before the coronavirus outbreak, America’s largest cities and even smaller metro areas like Houston, Washington, D.C., and Miami were seeing population declines. Growth in the country’s major metropolitan areas fell by nearly half during the past decade, according to an analysis by the Brookings Institution.

Instead, millennials and older members of Generation Z were increasingly choosing smaller metro areas such as Tucson, Ariz.; Raleigh, N.C.; and Columbus, Ohio, researchers found.

Why Work In An Office?

Moving from San Francisco to Oklahoma because Facebook, Twitter or some other big tech company decided to allow its employees to work remotely permanently instead of a few days a week will take more than a moving van.

High-speed internet service, among other things, will have to be available in rural areas for reverse urbanization to work well.

Stay-at-home orders during the coronavirus have taught us that working in an office building in the center of a large city isn’t necessary for many businesses.

Zoom meetings and other apps allow people to have meetings across the globe without possibly infecting each other in person.

Facebook announced in late May that it will allow most employees to work from home permanently. Twitter did the same thing.

Google extended its remote working limit from June 1 to Dec. 31. Microsoft has extended its work-from-home policy to the end of October.

Employees who can now work from home permanently may rethink why they’re living in a big city anyway. If anything positive comes out of the pandemic and stay-at-home orders, it’s that spending more time at home can be pleasant and that working and living in a big city doesn’t have to be a part of that.

Salaries May Not Be So Mobile

A big downside for some workers, however, is that their high salary that allows them to live in major metropolitan areas that have high costs of living, such as San Francisco, won’t follow them on a less-urban move.

Facebook’s full-time employees earned a median annual salary of $228,651, according to the company’s 2019 proxy filing.

Facebook plans to adjust employees’ salaries based on cost of living starting in January 2021, according to Dice. In theory, a Facebook developer living in the Midwest will earn less than a colleague in San Francisco, even though they both have the same corporate rank and perform similar tasks.

That’s a big change from a few years ago, when it offered financial incentives to move close to its Silicon Valley campus.

They’re probably needed too. An analysis in October 2019 found that the average one-bedroom rental in San Francisco was more than $3,000.

Reverse urbanization may not move such workers to small rural cities in the middle of the country just yet.

Even before Covid-19, tech hubs in Salt Lake City, Raleigh and Atlanta were growing. None of those cities are considered small. One analysis found that there were nearly as many tech-job postings in Chicago, Atlanta, Charlotte and Austin as there were in San Francisco.

Cities shutting down for social distancing may be enough to cause some people to move, and not by their own choice. Closing cities can lead to service jobs disappearing, as industry jobs did in the 1930s. Add office jobs that can easily be switched to remote work, and reverse urbanization could become popular out of necessity.

Less Global And Less Urban

Predictions of what the world will look like after Covid-19 can be difficult to make, but an opinion piece by the dean of the Wharton School of the University of Pennsylvania predicts the disease will reverse urbanization.

People will look closer to home in producing and consuming products as ways to combat lessen their chances of becoming ill. Crowded spaces such as trains, cafes, theaters, stadiums and offices are the lifeblood of cities, but they’re also seen as health risks.

The blog post listed some of the downsides of reverse urbanization as more people move out of cities to rural areas:

• Less scale of economies.
• Less effective incubators of creativity and innovation.
• Higher poverty.
• Reduced cultural opportunities.
• Reduced shared understanding among disparate people.

Returning To Cities Could Be Difficult

For those who do leave cities, but hope to someday return, the chance of that may be more difficult than they imagine.

Social distancing could be required for another year, or could return in cycles if the virus hits recurring peaks.

That won’t bring jobs back as quickly. And how many restaurants can survive for a year on takeout and delivery alone?

Remote work is cheaper for companies, and is likely to be a permanent fix for many companies and employees who are growing used to the practice.

Moving to walkable towns with smaller crowds can seem like the smart thing to do during an outbreak of an infectious disease that seems to spread faster in crowded areas.

But will those new citizens of smaller cities ever want to return to the large cities they once loved so much? Maybe not. And that might not be a bad thing for everyone.