Connecting state and local government leaders
Some of America’s shrinking towns are trying to lure remote workers with cash. It’s not going so great.
Berrien County, Michigan, is not the kind of place you would expect to be losing residents. Perched on the coast of Lake Michigan, “the Hamptons of the Midwest” is widely known for its sandy beaches and vineyards, which draw plenty of tourists from nearby Chicago and Indianapolis. But the county hasn’t yet persuaded those tourists to stay, and its population has been declining since the 1970s. So last year, Rob Cleveland, the leader of a regional economic-development organization, got creative. If you’re a remote worker from another state who wants to buy a house and resettle in Berrien, you can apply with Cleveland’s group, the Cornerstone Alliance, and get $10,000 to $15,000.
Since September, when the program launched, more than 2,500 people from all over the country have reached out to express interest in the incentives, Cleveland told me. He connected me with one of them, Jill Urbanski, a longtime Chicago resident who heard about the offer on the radio in October. By the end of February, she had moved to St. Joseph, Michigan, and collected her $10,000. “It made perfect sense,” Urbanski told me. “Everything lined up for me.”
There’s just one problem. In the 10 months since the program launched, Urbanski is the only person who’s taken the Cornerstone Alliance up on its offer. Cleveland said that two more families are poised to move to the county soon, but he’s still nowhere near his initial goal of giving out 25 incentives by the end of this year. Now he’s hoping he’ll hit five.
Moving incentives like the ones in Berrien are all the rage right now. More than 40 places in the United States are giving people money to relocate, according to the website MakeMyMove. The Shoals, Alabama, will pay you $10,000. Northwest Arkansas will also give you $10,000—plus a free bike. Topeka, Kansas, offers up to $15,000 and $1,000 worth of Jimmy John’s sandwiches. Morgantown, West Virginia, has received a wave of media attention by making what may be the most generous offer: a combination of cash grants, free outdoor-gear rentals, complimentary ski tickets, and other perks collectively valued at $20,000.
These initiatives vary depending on the size of the city and how they’re funded (some, including Berrien’s, are financed entirely with private dollars), but the idea behind them all is the same: By dangling rewards, struggling communities hope to attract new residents—especially remote workers—from wealthier parts of the country. These programs predate the pandemic, but they’ve grown in popularity now that a chunk of companies are permanently embracing remote work. “People may be making that decision to step away from the cramped office in downtown Manhattan,” Craig Armstrong, the architect of the incentives program in Newton, Iowa, told me. “We’re probably well positioned to take advantage.” Even The Wall Street Journal has celebrated moving initiatives, saying they open new avenues for “today’s legions of remote workers, who are itching to bounce from their high-price, high-density confines in cities like San Francisco and New York.”
But the way these programs are playing out is nothing like their initial promise. Instead of something that can fundamentally reorient where Americans live, almost all of these initiatives look like what’s happening in Berrien: They’re bringing in some new residents, but not enough to make any notable difference for the cities’ population problems. For all the hype around remote work, it is clearly doing little to nothing for lots of shrinking cities.
Moving incentives have been around for a while, but they went prime time in 2018. That year, a foundation in Tulsa, Oklahoma, started offering $10,000 to remote workers who moved to the city. The idea—make money by moving!—quickly became a media sensation that brought Tulsa exactly the attention it was looking for. Over the past three years, roughly 47,000 people have applied to the program, called Tulsa Remote. Between those who were accepted and the families that came with them, more than 1,000 people from all over the country have moved to the city. Tulsa’s success is one of the biggest reasons so many other communities have created their own incentives.
But unlike almost all of the other places offering these programs, Tulsa is a major city, home to hundreds of thousands of residents. (The only bigger city with incentives is Baltimore, which awards just 20 grants a year.) Indeed, given the city’s size, the new residents accounted for only a trivial 0.25 percent increase in population. And because Tulsa kick-started the trend, it got a head start in attracting new residents. “I think Tulsa got a great advantage because it was the first mover, and it made their name,” says Richard Florida, a professor of economic policy and analysis at the University of Toronto.
To try to find out if other programs have replicated the minor success of Tulsa Remote, I reached out to 10 of them, focusing on those with the most generous incentives. I heard back from and interviewed representatives from eight of them. Everyone was excited about what their town had accomplished. But no city came anywhere close to matching Tulsa’s record.
Consider Topeka: The region’s economic-development agency launched an incentives program in December 2019. It has since added just over 65 new residents to a city of more than 125,000 people. The Shoals, home to more than 70,000 people, has settled just 25 new residents through its initiative since June 2019. Cleveland, of Berrien County, is proud of his program, and he attributes the underperformance to the bonkers housing market. But when the Cornerstone Alliance does eventually fill all 25 budgeted spots, the gains will amount to basically nothing. The county is home to 153,000 people, so even if the remaining 24 slots go to four-kid families, the population would increase by just less than 0.1 percent.
“I’m fairly skeptical [that these programs] will make a noticeable blip on the population totals of a city or state,” Brett Theodos, a senior fellow at the Urban Institute, told me. He compared the incentives to an expensive marketing program with limited benefits. “There’s only going to be so many news articles about this phenomenon,” he said.
The problem isn’t just that most of these incentives receive sporadic media attention. Even programs launched before or alongside Tulsa’s have had minimal success. Armstrong estimated that Newton’s initiative has brought somewhere between 125 and 150 new people to town since it launched in 2014—a 1 percent increase in population spread out over more than seven years. Britt, Iowa, has one of the most effective programs, and its results have still been quite modest. It has given away eight plots of land to families since it began offering them in 2018; once construction is complete and the new residents arrive, the town’s population will increase by 1 to 2 percent.
That doesn’t mean the incentives have no benefits. Newton’s program was partially created to get reluctant construction companies to build in the town, Armstrong said, and in this it has succeeded. The plots Britt has given away were intended to both grow the city’s population and help get rid of vacant land. Ryan Arndorfer, Britt’s mayor, told me that the program has certainly helped with the latter. And any new residents provide some benefit to shrinking towns, especially if they’re professionals with high earnings—which remote workers disproportionately are. Such people generally spend more at local businesses and pay more in taxes. Plus, they are known to form clusters. When enough white-collar residents gather in one place, they attract like-minded people, organically growing the population.
But experts told me it’s unlikely that the programs will cause a critical mass of white-collar workers to relocate to these places. Part of the problem is that while the officials behind these programs dream of pulling from big cosmopolitan cities such as Seattle and Austin, Texas, the incentives really are just stealing from communities similar in size and levels of wealth. Of the eight families that moved to Britt, six came from other parts of Iowa. The two that didn’t—one from New York and another from California—still had ties to rural Iowa.
These programs “are a zero-sum competition,” says Cristobal Young, an economic sociologist at Cornell University who studies how states use taxes to attract residents. When the programs are publicly funded, he told me, it’s “bad policy that just takes money from settled residents and gives it to people who are more mobile.” Even when they’re privately funded, the risk is that the programs put pressure on peer communities to hand out their own incentives, spurring a race to the bottom.
The fundamental tragedy of moving incentives is that these communities desperately need more people and more jobs. In 2006, Newton lost a Fortune 500 employer, Maytag, whose headquarters had helped sustain the local economy for more than a century. When Maytag was acquired by Whirlpool, Newton shed well over 1,000 jobs. Now Whirlpool is headquartered in none other than Berrien County. The cash giveaways, the Cornerstone Alliance’s Cleveland said, are ultimately secondary to his pitch. Whirlpool—and the talent it brings—is a far bigger selling point. “People are not going to move for $15,000,” Cleveland said. “There have to be amenities and opportunities.”
I was surprised by the candor, but he’s right. In the battle to attract remote workers, cities can’t simply pay to win. If they don’t have the types of restaurants and walkable neighborhoods that professionals are looking for, $15,000 just isn’t going to cut it. They might even need to offer attractive, in-person jobs: New residents may work remotely when they arrive, but they could eventually want or need to switch careers.
The victors are likely to be places such as Boise, Idaho; Salt Lake City, Utah; and Nashville, Tennessee—cities that were getting bigger and wealthier before the pandemic. In other words, cities that were already winning. Incentives “could work in a Bozeman[, Montana],” Florida told me. “You could do this maybe in a Traverse City[, Michigan]; a Hudson, New York—all the places where, if you look at the census data, you see that there’s been a migration. But it’s still a small subset of places.”
That moving incentives have had such tepid results doesn’t exactly bode well for the idea that remote work will fundamentally rejigger where Americans live. Sure, some outdoorsy types might move to hip mountain towns. Cost-conscious folks could decamp to cheaper but still cool inland cities. But for all the talk about the hazy future of big cities, remote work doesn’t seem poised to change that much about how those places have pulled away from the rest of the country.
This harsh reality isn’t likely to stop the boom of moving incentives. But cash and gimmicks aren’t a way out of the vicious cycle that struggling communities are stuck in. Urban professionals move to places for high-end opportunities and amenities. And most small cities will struggle to generate those things until they have enough professionals. Ultimately, the only real winners from moving incentives are the literal winners: the recipients. The $10,000 grant was great for Jill Urbanski. But was it a good investment for Berrien County? Urbanski had already been looking to leave Chicago and loved the county from vacationing there. I asked her point-blank if she would have moved even without all the money she got. She didn’t hesitate: “Yes.”
Daniel Block is an executive editor of the Washington Monthly.