Several analyses of migration since Covid started have noted an increase in demand to live in more remote locations. This is tricky as the correlation between housing units and population is typically very high (e.g. 0.98) across cities. As people move out of a place, others tend to move it. So how do you notice a change in demand? By looking at changes in price. While population changes have been small, housing prices have varied much more. Denser, more expensive cities, like New York, have seen housing prices fall while smaller cities, especially those that are more pleasant places to live (like near ski resorts or national parks, have seen prices rise.
So this is a good thing, right? People get to live in high-amenity places and still earn wages like they are in the big city!!! Not only that, companies can shed the cost of maintaining offices. What's not to like?
Well, a main reason that people are so productive in big cities is their proximity to other people. Face-to-face interaction allows ideas to move more quickly from one person to another. To the extent that Zoom is not as efficient a way to transmit ideas, something will be lost. That "water-cooler" chit-chat that seems like a waste of time is actually the type of interaction that generates big ideas, not to mention trust between employees that is critical to firm success. While built-up social capital in a company will go a long way in this regard for a while, once employment dynamics create turnover in a company, new employees will have a harder time integrating and those knowledge spillovers that are so critical to building trust, social capital and, productivity will diminish.
Time will tell, but I am not optimistic.
