In the The Internet is Not Helping Rural America I made the point that rural America is falling behind the rest of the country, largely due to limitations with the Internet. In this article, I?d like to discuss how rural America may become the promised land for urban refugees, precisely because of the Internet.
Why Would Anyone Want to Leave the Big City?
The easy answer is the high cost of living. In many major cities, particularly along the Atlantic and Pacific coasts, the cost of living is reaching absurd levels.
There are various components to the cost of living issues in these areas. One is certainly high taxation. States like California, New York, New Jersey, and Massachusetts tax their residents to death. It?s not just high income taxes either. They also have high and rising property taxes, sales taxes and an innovative variety of backdoor taxes, like regulatory fees and traffic violations that make up a significant amount of revenue.
Much of the problem is the high cost of supporting the pensions for public employees. And still more is just plain waste.
The Urban Housing Crunch
The other major cause is housing. Whether it?s rent or house prices, housing costs are reaching nosebleed levels. An interesting article came out on this topic just last week, My Generation is Never Going to Be Able to Have That (a house). It focused specifically on the Seattle housing market, as the poster child for what?s happening in dozens of cities.
Millennial?s are drawn to the city?s growing high-tech employment. But despite salaries that are well above average, many cannot qualify to purchase an average home in the area. Still more can?t afford rent and have been forced into unconventional housing arrangements.
Yet another recent article makes the seemingly counterintuitive claim that Homeownership Does Not Guarantee Middle Class Prosperity. It goes on to explain how federal, state and local government policies have conspired to cause some areas to experience real estate price explosions, while turning other areas ? sometimes entire cities ? into permanent low-rent districts.
This is a topic I?ve covered before. Contrary to popular belief (or indoctrination), rising house prices aren?t necessarily a good thing. That?s becoming more apparent every year.
Examples from Closer to Home
In case you?re thinking I?m merely quoting third-party sources for information, I?ve seen plenty of this phenomenon close to home. Last week we were tooling around Portsmouth, NH, and while we were there we were looking at housing. My daughter and her girlfriend are planning to get a place together. We were stunned at the number of houses along the New Hampshire and Maine seacoasts priced in excess of $1 million. Those weren?t necessarily houses located on the beach either.
It appears to be the Boston overflow ? another city teeming with high-tech jobs and ridiculously high house prices. But the price effect has moved up the coast, a good 50 to 100 miles away from the city itself.
Meanwhile, while browsing on Realtor.com, I discovered the average price of a home listed in my hometown in New Jersey is nearly $800,000. The community right next to it, where I was born, has an average listing price of $1.075 million dollars. (This makes clear why we no longer live in New Jersey.)
Price structures like these are totally absurd.
As prices have been rising in recent years, the problem is becoming more acute, especially for younger people. But rest assured that the search for cheaper housing has been a major migration-driver in the human race for centuries.
And that brings us back to rural America.
How Rural America May Become the Promised Land for Urban Refugees
The historic trend in America ? and one often bragged about ? is how the country evolved from a nation of farmers and shopkeepers to urban factory workers, and now, increasingly, high tech. The percentage of the US population living in urban areas increased from 10% in 1830, to 80% by 2010.
This has led to rising living costs, especially property values, in urban areas. At the same time, much of rural America is aging and shrinking.
But it?s not ridiculous to contemplate a reversal of the historic trend. After all, today?s world sees the fastest population growth ? and the greatest job generation ? taking place in what are or once were ?third world countries?.
The greatest example of this transition is China. One of the poorest countries in the world in 1945, it?s now the the world?s leading manufacturing nation. It manufactures more goods than the combined European Union, and nearly twice as much as the US, the nation that dominated manufacturing for over 100 years.
Such dramatic shifts are hardly unknown in human history. They take place when there are major cost imbalances. In the case of China, land, production and labor were much less expensive than in Europe and North America. It made sense for manufacturers to relocate operations there.
Now that the cost of housing in many urban areas has reached nosebleed levels, is it possible that both businesses and individuals will begin a gradual migration to rural America?
A Trend that May Already Be in Motion
I?ve already touched on this trend in Quiet Revolution ? Young People Becoming Farmers. There is something of a back-to-the-land movement by young people already underway. And as I disclosed in the article, my sister and brother-in-law have joined the ranks of urbanites-turned-farmers.
Some of this has to do with the pursuit of a simpler life. Not only is urban life incredibly expensive, but it?s also become unnecessarily complicated. Overcrowding is part of the problem, political fiefdoms are another. The terms ?urban? and ?simple? are becoming increasingly incompatible.
But it would seem the recent run up in urban real estate could be a serious catalyst. After World War II, millions of people left large cities in favor of the suburbs. They weren?t following jobs, but looking for cheap housing.
That cheap housing no longer exists. Suburban tract homes that were selling for less than $10,000 in the 1950s are now fetching $500,000 and more.
Highly skilled urbanites, who can neither afford a $500,000 house or a $2,000 per month rental, may be forced to rediscover rural America.
The Internet ? The Great Equalizer
I admit I have a bias here, since I make my living on the Internet. But I?m not special. When I got into this, I had no skills that remotely qualified me to make a living on the Internet. No degree in IT, no hands-on computer experience ? nothing. If I can do it, anyone can.
I see the Internet as being the 21st century equivalent of the interstate highway system. Launched in 1956, the interstate highway system probably did more than anything to move millions of people from large cities out to the suburbs. It created the all-important economic link between suburb and city, or more precisely, between the suburban homestead and urban employment. (Contrary to popular belief, employers only began moving out to the suburbs following massive waves of people, but not leading the charge.)
The Internet could be the interstate highway equivalent, enabling people to move to rural areas, while earning a living on the web.
This isn?t just true in theory. Much of the shift of business and industry from North America and Europe to the developing world has been made possible by the Internet. Yes, businesses had already been moving to those areas due to cost. But the Internet has created an invaluable inter-connectivity, linking the far-flung corners of the world.
I can personally attest to this. I have several clients on the other side of the globe, but because of the internet, we transact business as if we’re in the same office park.
Internet Income Earning Skills are Growing
On an individual level, millions of people have skill sets that can either enable them to work remotely, or to become Internet entrepreneurs in some capacity. It?s even possible to do it on a part-time basis, in combination with some other form of employment or self-employment. In fact, there is a rising class of mobile creatives who are doing just that.
The ranks of that class began to swell in the Great Recession, as traditional employment began to melt down. It?s likely the class will grow even more in the next recession.
The point is, geography is no longer an obstacle to earning a living. In fact, me and my family of four were able to uproot and move from Atlanta to New Hampshire in 2014, without any of us having a job in place. But I had my blog and my freelance blogging business, and that made the move possible.
The lower cost of living in rural America will make it possible ? and even desirable ? for people earning true middle-class incomes to make the shift. The $50,000 annual income that?s become completely inadequate in a suburb of New York, San Francisco or Boston, may be more than adequate in a rural area.
A part-time Internet business, generating maybe $20,000 or $30,000 per year, might be combined with a local job or product-based business. In fact, the Internet is becoming one of the best ways for a small operator to sell products. Even if you live in a small community, the entire world is your potential market because of the web.
As more people become comfortable with this way of earning a living, a move to the country could become a serious trend.
The Transition Won?t be a Hayride
In moving from an urban area to a rural one, it won?t be an easy transition. In fact, not everyone is cut out for such a move. There are some drawbacks to living in a rural area, compared with an urban or suburban area.
Some limitations to consider:
- Rural areas typically lack the cultural amenities of large cities.
- There will be less of everything urbanites are used to ? restaurants, movie theaters, gyms, and retail outlets, to name a few.
- Public transportation will be nonexistent in most locations.
- Internet availability and quality may be limited in some areas.
- Health insurance is a problem everywhere in the US, but many rural counties have only one insurance provider, and some have none at all.
- Healthcare facilities are few and far between, which could be a limitation for older folks looking to move to the country.
Never having lived in a rural area, there are doubtless many more I can?t even imagine. But most of us are a lot more flexible and resilient than we realize. It may be that shortly after moving to a rural area you?ll find that the things you don?t have you never really needed.
As well, there?s a very long list of urban irritations you?ll no longer have to live with. This includes high housing costs, high property taxes, high crime, traffic jams, traffic lights, long waits at restaurants, over-crowded shopping malls, and a general lack of privacy, among others.
Advantages and disadvantages always have to be carefully weighed out when you?re making a major move. But one thing I do know about transitions ? that?s that economics often play a dominant role. If you?re able to make a comfortable living without geographic limitations, the motivation to lower your cost of living will be a strong draw.
A Few More Important Caveats on Moving to Rural America
As is so often the case, when I wrote The Internet is Not Helping Rural America, I learned a lot from the many comments left by readers. A few, who had made the transition to rural America, offered some excellent advice for anyone making the move.
- Be respectful of the locals ? it?s their community, and you?re the ?foreigner?.
- You?re not on a mission to save the locals from themselves.
- Respect the lack of suburban lifestyles and income levels. A lot of people in rural areas like their lives just the way they are.
- Just because you can afford it doesn?t mean you need to deface the land by building a McMansion or some other type of suburban edifice.
- Be purposeful about blending with the local community. Plan to work a local job, start a small business, or going into small farming.
- Gently immerse yourself in the local culture. That may involve joining a church. Religion hasn?t disappeared from rural America at anywhere near the rate it has in the urban areas.
- There may not be a Chinese restaurant, a bagel shop or a tanning salon ? get over it.
While economics may be the major reason for moving to a rural area, it can be a dramatic change in many other respects. You have to be prepared for that, and ready to blend in. You?re not going to convert the area and the people to something more acceptable to you, and you?ll be building resentment if you try.
Final Thoughts on How Rural America May Become the Promised Land for Urban Refugees
All that said, the few people I know who’ve made the move from metropolitan areas to rural areas overwhelmingly appreciate that they did. It?s not always apparent in the early years; after all, it is a transition. But it?s one that if done right, and with the right expectations, can reap a lifetime of benefits.
Have you made the move from an urban or suburban area to rural America? Or do you hope to in the future? And if so, how are/will you earn a living? And how are you adjusting to the different lifestyle?