Bloomberg: Bye-Bye, New York. Hello, Fayetteville.
May 22, 2023 It’s easier for small towns to develop the services and amenities to attract new talent than it is for New York City to build affordable housing. Due to increased housing costs, college graduates and more affluent residents are beginning to relocate to lower-cost metropolitan cities across America and leaving expensive cities like New York and San Francisco behind. After the pandemic, people have been choosing cities with less than 1 million residents which means the number of attractive cities for young professionals is expanding. High-cost, large cities have great amenities but are struggling to build housing, while smaller cities have more affordable housing, and it is easier to build new amenities than housing. Empty office buildings in smaller metro cities could be utilized by developers to create mixed-use developments that attract new migrants. This provides a great economic development opportunity for smaller cities with plenty of housing and outdated commercial real estate that still want to maintain affordability and lower density than big cities. As more affluent residents move, displacement is still a threat to local residents as migrants can drive up housing costs, so small cities may need to build additional affordable housing. Still, the expanding geography of opportunity in the U.S. could lead to increased talent and economic growth in small metro cities, and addressing housing shortages is easier if more cities are attempting to do so.