Much has been said recently about an exodus from American cities, including Seattle. But is it true?
According to countless reports, many people are kissing goodbye to city life and moving to the open spaces of the suburbs or even more rural parts of the country. The rise of remote working since the beginning of the pandemic enables these steps.
You can find evidence that seems to support this idea if you are looking for it. Surveys show that city dwellers are increasingly thinking about a change of scene. City dwellers are spending more time than ever drooling over online property listings in distant areas.
Here in Seattle, rents in dense urban areas have fallen after years of steady growth.
However, it is a red herring, according to a new report analyzing the most recent migration data. People are not fleeing cities – at least not yet. While the number of people leaving Seattle and most of the other major subway areas has increased, it’s nowhere near what you would call an exodus.
But don’t breathe a sigh of relief just yet. That doesn’t mean Seattle is fine.
What has happened instead is that since the pandemic began, the flow of moving companies to Seattle neighborhoods has been reduced to a trickle.
“The runoff from Seattle’s boroughs in 2020 was very similar to 2017, 2018 and 2019,” said Stephan Whitaker, political economist at the Federal Reserve Bank of Cleveland and author of the report. “What fell was your influx. Compared to the last three years, far fewer people moved to Seattle’s neighborhoods in 2020. “
In fact, Seattle has been the second largest drop in people moving to its dense neighborhoods of any metropolitan area in the country.
Whitaker was able to do this analysis because he had access to data that the general public doesn’t have: Federal Reserve Bank of New York / Equifax Consumer Credit Panel. This data, which contains address information, is updated monthly and makes it possible to track the movements of populations in near real time.
Whitaker calculated an immigration rate for all US census areas from 2017 to 2019 and then compared it to the pandemic – the period from March to September 2020. In almost all urban areas of the country, immigration declined much more than emigration.
In Seattle’s dense urban areas, immigration decreased by 49 moving companies per 100,000 residents a month in 2020 compared to previous years. However, there was little change in emigration, an increase of only one person per 100,000 inhabitants per month.
Seattle’s rate of decline was associated with San Francisco as the second largest (although San Francisco has seen a much larger increase in the number of people leaving its urban areas). The only place with a greater decline in urban immigration was San Jose: 70 fewer moving companies per 100,000 people per month.
Needless to say, Seattle, San Francisco, and San Jose have certain similarities. All three are tech hubs with very high cost of living. As we’ve seen, the tech workforce has moved to remote work with relative ease.
Whitaker found the strongest correlation between the percentage of workers who can work remotely and the decline in immigration (he also looked at the rate of COVID-19 deaths, the homicide rate, and the percentage of small businesses open).
It makes sense. When you can work remotely, commuting is no longer a problem. Why move to a high rent neighborhood in the middle of a pandemic when almost all of the good things in city life are unavailable?
“It’s more of a phenomenon for younger people,” said Whitaker. “Maybe you got your first job or you are taking a step in your career and normally that would mean moving to a new subway, but since nobody goes to the office it doesn’t make any sense so just stay where you are. “
Interestingly, the data also shows that the trend is primarily with tenants.
“Home buyers really haven’t slowed their influx,” said Whitaker. “If you think about your future long enough to think about buying a condo or house, then you are looking beyond the pandemic.”
And they could explain why Seattle house prices are still rising despite falling rents.
While in most metropolitan areas, moving companies declined to their neighborhoods, there were a handful of exceptions. Among them were both Spokane and Boise, Idaho.
Whitaker sees growth flattening out for cities like Seattle for a while, but expects a return to pre-pandemic trends at some point.
“It’s different from saying it’s the end of these neighborhoods, like nobody lives there anymore,” he said.
Note about the data: Census areas in the Seattle area with a population density of 7,000 or more people per square mile are defined as urban in the report. While most of these are in the city of Seattle, there are a number of other areas, including downtown Bellevue and other more populated areas on the East Side and in cities in South King County.