This graph is wonderful news for those who think Vermont’s economy needs to grow. (It is, as I’ve written before, very bad news for our housing supply.) The pandemic has made our state the most desirable in the nation for affluent Americans.
More desirable than our famously low-tax neighbor, New Hampshire. More desirable than the Sun Belt or the tax havens of Texas and Florida. We’re Number One, baby!
It’s too soon to tell if this dramatic shift will continue. But if it does, then it’s time to rethink our policies across the board, from taxation to education to broadband to economic incentives.
The graph above is from a brief account on Axios, based on an academic study of more than 300,000 moves in the last four years, 100,000 of which happened between April 2020 and February 2021. The study found that up to 20% of all moves were influenced by Covid-19, especially among higher earners (defined as earning more than $100,000). They are, in the words of the study’s abstract, “moving out of more populous cities at greater rates, and moving more for lifestyle reasons and much less for work-related reasons compared to the pre-pandemic period.”
The breadth of this effect, in such a brief period of time, happens rarely if ever. After all, long-distance moving is not something you do on a whim. It’s a major life commitment.
This shift could be temporary, but the researchers see signs of a permanent shift. They cite recent research predicting a large-scale adoption of remote work, allowing more people to relocate based on want, not need.
Well, people of means, anyway. The study found that moving patterns have not changed among low-income Americans; they are still likely to relocate for employment and/or cost of living.
This research, say the authors of the study, “have broad implications for the structure of cities, tax bases and municipal bond markets, political bases, commercial and residential real estate markets.”
No duh. Maybe we should stop believing that we have to induce people to relocate here, and stop fearing that people will flee at the drop of a hat. It seems as though Vermont sells itself, especially in post-pandemic times. And while Covid-19 will hopefully fade into history, remote work is here to stay — and likely to grow.
So let’s take a fresh look at what we have to offer that makes Vermont so attractive, and worry less about our supposed drawbacks. This ought to destroy the myth that our tax system is scaring people off and chasing them away. It’s just not happening. We’re getting a lot more in-migration than New Hampshire, after all. Maybe we can afford an income tax surcharge that would allow us to make needed investments in housing, education, broadband, and the green economy.
If we’re to capitalize on this trend, we need to maintain a strong public school system and boost our public colleges and universities. We need to address the holes in our environmental protection game. We need a more robust, less auto-dependent transportation system. We need to find a way to bridge the partisan divide over how to reform Act 250. Universal broadband is a must, as if we needed more reason to invest in it.
And maybe it’s time to rethink our economic incentives. First on the block: our grant programs for new and remote workers. Their efficacy was unquantifiable to begin with; now they seem superfluous. High earners are moving here whether they get a grant or not.
This trend isn’t entirely positive, of course. The housing crisis is going to get even worse. If affluent folks are moving here, developers are not going to build affordable housing. We have to find ways to spread the growth around, instead of letting it concentrate in Chittenden County. And we have to manage growth so that other parts of Vermont don’t end up looking like Chittenden County, no offense.
I don’t have all the answers, and I don’t even have all the questions. But this is looking like a new day for Vermont. We should adjust accordingly.