The Great Migration of Remote Workers: Housing Unaffordability and Climate Change
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By Catherine Zhang
As pandemic restrictions ease and companies begin reeling their workers back into offices, there still lies a significant portion of employers who have declared that remote work is here to stay. Despite waning restrictions from the pandemic, remote work opportunities have continued to increase since the start of COVID, ballooning up to 15% of all jobs in 2022, and indicating that many employers are still open to remote work even if not mandated. In fact, many employers cite increased productivity as the main push factor to let remote work resume, and remote workers inhabiting this percentage have begun a so-called new Great Migration, moving from states with higher cost-of-living to cheaper regions like the south.
Unsurprisingly, the states experiencing the largest exodus of remote workers, such as New York and California, are also among the nation’s most expensive. For example, New York’s cost of living index, driven up by New York City, is 94% higher than the nation’s average. On the other hand, LinkedIn’s February 2023 report showed that among the top five places that remote workers were moving to were Texas, Florida, and Tennessee—states that rank among some of the cheapest to live in, when accounting for the cost of living index and taxes. However, with this new surge in migration immediately following the pandemic, the word “cheap” has quickly become relative, as the introduction of new wealth from those receiving NYC-adjusted wages for remote work has made life in these southern destination states now unaffordable for many residents.
These states, amongst many others, have experienced a more than 40% increase in housing prices between February 2020 and June 2022. Unlike the 2008 housing bubble, the increase in prices were actually accompanied by an increase in demand for housing rather than speculation, backed up by a similar increase in rental prices alongside housing prices. Rental platforms such as StreetEasy, Zillow, and Apartment List suggest that since the pandemic there has been a 25% increase in rental prices. Where did the increase in demand come from? According to the Federal Reserve Bank of San Francisco, the answer indeed is remote workers moving.
These housing woes become even more worrisome when paired with the fact that local salaries in these states have not kept up with housing prices. For example, Florida only saw a 1% increase in average salaries in 2022 adjusted for inflation. On the other hand, remote workers who boast salaries adjusted for much more expensive cities like New York City or San Francisco are able to keep up with the uptick in housing prices that they have caused. In an era where the dream of home ownership continues to drift further and further away for most Americans, the housing affordability crisis is only becoming worse due to the migrations of remote workers.
On top of contributing to the unaffordability of housing, this so-called new Great Migration is also leaving behind a negative impact on the climate, by speeding up urban sprawl and the change to less environmentally friendly lifestyle that remote workers adopt once they move. Texan metropolitan areas have consistently led the nation in terms of urban sprawl, and in 2021, the Dallas-Fort Worth area (among other cities in the state) had one of its largest booms yet, with more than 52,000 new houses being built, many of which were along the outskirts of the region. Urban sprawl, especially at the magnitude of what is happening in Texas, will only further contribute towards the climate crisis, as those who live in these suburbs often have to drive up to 45 minutes if they want to go downtown for work. Even if they choose to make a trip elsewhere, it is impossible to do so without a car. Compared to cities like New York City, many people there can get by with just public transportation for travel. Furthermore, remote workers who used to take the bus or subway pre-pandemic are now relying on cars for travel, meaning there is bound to be an increase in carbon emissions. In fact, cars emit 45% more carbon dioxide than most forms of public transportation.
The origin cities of these remote workers, like San Francisco and New York, are also far more densely populated and built up, whereas the rapid expansion of cities in the destination states means that they are building out, with growth primarily taking place via suburban sprawl. This takes up far more land and requires the continuation of deforestation among other forms of eroding nature to keep up. Houses in the suburbs also require more maintenance than apartments would in the city, as many of them come with a lawn—although the additional green space might seem appealing, many lawns are maintained with excessive water usage and pesticides. Houses themselves also require more energy to run compared to apartments because of their size difference, and although many neighborhoods have begun switching to renewable energy, the vast majority of them are still reliant on fossil fuels. These negative impacts only cover the tip of the iceberg in terms of what suburban sprawl is capable of damaging, and yet this phenomenon will only continue to rise with the movement of remote workers.
The influx of remote workers for some states do have benefits, such as stopping rural decay and stimulating their local economy. However, these benefits do not outweigh the overwhelmingly negative externalities of rising housing unaffordability and contributions to climate change. Many companies have attempted to reel their workers back to the office, while other states have tried to control the waves of remote workers by doubling down on housing restrictions. However, there still lies the question of whether or not the movement of remote workers is something that can be slowed down with these attempted solutions, or if it has already kickstarted a new movement of digital nomads.
Catherine Zhang is a first-year from Minnesota studying Business and Political Economy at NYU Stern. She is passionate about international economics and how political systems influence local, national, and global economies. In her free time, she can be found wandering around the aisles of the Union Square Barnes and Noble.
