The new world of remote jobs has small towns and cities exploding with growth as workers explore alternatives to big metropolitan areas. Is this good or bad?
At the tail end of a strict five-month-long lockdown in Santiago, Chile, a sprawling city of about seven million residents, Gonzalo Fuenzalida finally reached his breaking point with urban living. As the owner of Chile Nativo, a travel company that specialises in adventure, he’d always wanted his family to live closer to nature. So, in December 2020, they took a one-month exploratory trip to the woodsy resort town of Pucón, which lies in the shadow of a puffing volcano 780km (485mi) south of the Chilean capital.
Three months later, Fuenzalida rented a house in Pucón near Lake Villarrica, where he and his wife now spend their free time biking, hiking and stand-up paddleboarding. Their seven-year-old son attends school in the neighbouring city of Villarrica, where Fuenzalida rents a two-metre by three-metre office to work.
“In all senses,” he says, “our life has been better.”
Of course, the move has not been without its challenges. The 56-year-old says internet speeds are nowhere near as fast as in Santiago, making it difficult to run his company from his home, which he says “lies in a black hole”. And he hasn’t exactly escaped from traffic, either, which can back up for hours during the area’s peak summer tourism season, especially now that the number of permanent residents has skyrocketed.
The latter scenario has been particularly prevalent in America’s Intermountain West, which is home to the three states with the highest growth percentages between 2020 and 2021: Idaho, Utah and Montana. Oxford Economics recently named Boise, Idaho, the most unaffordable city for US homeowners, thanks to an influx of new remote workers from high-cost coastal cities such as Seattle and San Francisco. The median home price in this city of 235,000 is now $534,950 (£395,000) – 10 times higher than the median income.
A similar study from Florida Atlantic University, US, showed that three cities in neighbouring Utah – Ogden, Provo and Salt Lake City – were also among America’s top 10 most overvalued housing markets. Danya Rumore, a researcher at the University of Utah and founder of the Gateway and Natural Amenity Region (GNAR) Initiative, lives in the latter. “We used to call it Small Lake City,” she says, “But it’s really starting to feel a lot more like a big city, with the dynamics of the community changing notably.”
Big-city problems like gentrification, homelessness and air pollution are all on the rise, adds Rumore, while the overheated housing market (exacerbated by short-term rentals) has made it difficult for businesses in the service industry to maintain staff, since employees can’t afford rent. Rumore notes that Salt Lake City, which has a population of about 200,000, is emblematic of other urban centres in the Intermountain West, which are known for having ample natural amenities, good recreation opportunities, access to open space and a high quality of life.
That’s a major transition that happened overnight that really takes years and years for markets and communities to adjust to – Danya Rumore
“With the shift that’s been going on over the last year, we are seeing wealth move into these communities,” she says, noting that many new residents still earn their income in a high-earning area but now live in a lower-earning area. “That’s a major transition that happened overnight that really takes years and years for markets and communities to adjust to.”
Gonzalo Fuenzalida
Andersson thinks creating the right ecosystem will be key to capitalising on this opportunity since remote workers don’t just work from home; they work in coffee shops, cafes, co-working spaces and community centres.
“What these places need to do is to create meeting spaces for people and networks where they can interact, learn from each other and grow together,” he says. “They need to become a little bit of what the big cities used to be for people, for companies and for innovation.”
In general, Andersson believes those who have moved away from major metropolitan areas will stay in their new homes, but they may also maintain a link to the place from which they came, such as a smaller flat or co-living place. “We’re coming from a situation where it was either-or,” he explains. “Now, you can be in both places.”
Rumore says that, in the US, she’s seen anecdotal evidence that some big-city workers who relocated to small resort towns last year are now on the move once again. Yet, they aren’t necessarily going back home. “When you realise you don’t want to live in small town Utah, but Salt Lake’s got really good outdoor access, too, you think, ‘I should just move there instead of Seattle or Silicon Valley’,” she explains, noting that this may put even more strain on cities in the Intermountain West.