It’s been quite a year. I started the year pondering how Cats happened, and now, the longest eight months later, the question remains unresolved but somewhat less important. An apocalypse can be a disaster or it can be a prophetic revelation, and to this amateur observer, Cats was a disaster that revealed nothing while the pandemic is both disaster and revelation. It’s time to see what we can see, and maybe get there before the rest of the world shows up.
The pandemic, you may have noticed, has caused a seismic shift to remote work. People (with means and mobility) are leaving cities, rents are dropping in SF and NY, and there’s a housing boom in the ‘burbs and maybe everywhere that’s not a city.
In America, this has led to proclamations of the death of cities in general and New York and San Francisco in particular.
But proclaiming the death of cities in the middle of a pandemic is kind of like saying you’ll never drink again when you’re lying fetal on the bathroom floor after a night of drinking. You’ll drink again, you know you will, and cities will come back.
A few years ago, a friend of a friend was leaving Chicago and on his way out he wrote a Facebook post about how he was tired of all the racism in Chicago and just couldn’t stand it anymore. I mean, yeah, it’s a racist place, but it’s been that way since forever. He went to grad school in another American city, I assume one without a racist history, but the point is that he was leaving anyway for personal reasons. A lot of the “I’m getting out!” content feels a bit like that. Yeah, sure, your ex was a bitch, we get it, but why did it take you seven years to see it?
Sometime soon, maybe in a year, maybe in five years, there will be a vaccine and people will forget about the pandemic. Half the country is already pretending it doesn’t exist and in five years, when it really doesn’t exist, the other half will forget that it existed (or are you betting on the memory of Americans?).
The really big thing is not that people are leaving cities, it’s what enables them to leave cities — the decoupling of cities and work for a huge number of people around the world.
There’s a massive group of people who just went from needing to live near work to having the freedom to live just about anywhere with good wifi.
Now, I’m just a filmmaker trying to avoid a 150-page first draft of a screenplay that needs rewriting and you probably shouldn’t listen to me, but I think it’s a worthy exercise to think about where people will go and what that will precipitate.
With the virus still floating around, some people are staying put and some are hiding out in the woods until things cool down and some are heading to the ‘burbs where they will spend the next twenty years smugly expounding on the virtues of lawns and the traffic, my God the traffic even though the traffic isn’t so bad now that all the commuters are gone.
But sometime soon, people will forget about the pandemic and a lot of people will move back to cities, and a lot of us city-lovers will move to new cities.
Because a life entirely mediated by Zoom is soulless and empty. Because many people will crave all the things that cities offer: great restaurants, bars, dating markets, live comedy, live music, art galleries, theater, cinema, excitement and energy, weirdos, running into friends, the ability to join a face-to-face community or scenius, and the feeling of discovering something new every day.
Cities will have a lot to offer, as they have for thousands of years, especially for young single people who just lost an entire year of youthful fun to the pandemic. And as the population of cities shift more to young, single, and ambitious people, more young, single, and ambitious people will be attracted. Network effects, or something.
College kids want to party, you may have seen on the news.
And if you’re young and breaking into an industry, you want to expose yourself to the upside of chance encounters and casual off-the-record conversations. You don’t “run into” people on Zoom. Ever tried to Tinder when back home in the ‘burbs visiting your parents?
Nothing propinks like propinquity. Most of the interesting stuff happens outside the official channels, not to mention the aesthetic reasons for preferring cities, or that some of us just prefer to be around other people.
As long as cities offer some level of serendipity and a lot of easy-to-access culture, they will be desirable places to live for a lot of people.
There’s a latent force, a pent-up energy, a coiled spring. And when the pandemic ends, people will exercise their newfound freedom to move and a lot of shit will go kinetic.
For the newly mobile, let’s call them the mobile middle class — not quite the leverage class, but people with high incomes that are not tied to their local economy — the desirability of a city will be increasingly tied to lifestyle factors.
Prior to the pandemic, I spent eight months living more or less nomadically. I kind of despise the word “digital nomad” but I can’t think of a better term, so here we are. I had a remote freelancing gig and moved around a lot, spending time in Mexico, Colombia, Barcelona, San Francisco, and New York.
Being a digital nomad (ugh) really shifts the calculus of where to live, especially for people without kids. In my experience, nomads tend to look for a few things:
- Good weather
- High-speed internet
- Affordable short-term housing
- Culture and “lifestyle” (so broad! can mean many different things to different people!)
Some people prefer warm beachy spots like Bali or the Canary Islands while some prefer places with lots of culture and things to do — places like Berlin, New York, Lisbon, Barcelona, Mexico City, Austin, Medellin, Thailand, Vietnam, etc.
Looking at the fastest-growing locations for digital nomads might provide a hint as to the kinds of places that will grow in popularity.
Up until now, this has all happened on a small scale. Remote jobs were relatively hard to come by.
Not anymore. The pandemic just created tens or even hundred of millions of new remote workers.
Are they all going to move? Will they all go abroad? Will they all choose nomadic lifestyles? No. Obviously not. But we’re going to see a massive shift in preferences — we’ve already seen the revealed preferences of mobile people with families, but a large percentage of the newly mobile will want to live in cities and that when they choose which city to live in, lifestyle and cultural factors will be more important than job opportunities.
This will lead to growth in cities that offer the things that nomads previously looked for — culture, weather, affordable cost of living, interesting people, culture, etc.
What happens when people start flooding into towns and cities whose growth was previously limited by the number of high-paying jobs?
Well, The Washington Post has an article about it. You should read it because it’s the future.
Let’s take an example of a Google engineer, currently living in San Francisco making $150,000 a year. They can buy a house in San Francisco for $2 million or they can move to Asheville, NC or Nashville, or Austin or Denver or Salt Lake City and get a lot more house and still have money left over (if they move quickly).
Or maybe they’re want to explore the world a bit. They might live in South America or Europe or Asia or Africa for a while.1
Same income (for now), more lifestyle or culture or whatever.
This is going to cause some serious tension. I read the WaPo article and didn’t see any mention of pitchforks, just angry people on Instagram, but it’s early.
Let’s take Asheville as an example. You might be thinking “wait, this has already been happening in Asheville for the past ten years” and yup, but now it’s going to happen harder and faster.
The local middle class, that is, people who have in-demand skills but are tied to the local economy — their economic opportunities won’t open up in the same way that the SF engineer’s lifestyle opportunities just did. It’s asymmetrical, or something.
If you’re a software engineer in Asheville, your job market just went from a 30-mile radius to anywhere in the U.S. (the world too, but software engineers don’t want to compete in the global market, more on that later). But if you’re a teacher, saving for a home for the past five years and just when you got that down payment together… a bunch of carpet-bagging remote workers come into the market and start bidding up housing values! And you don’t even like kombucha.
I saw hints of this when I was in Barcelona. The city is a magnificent place to live, which has attracted foreigners. The increased demand for housing, coupled with an increasing percentage of the housing stock devoted to Airbnbs (because it’s also a huge tourist destination), is forcing long-term rental prices up.
As rents rise, long-time residents find themselves priced out of the market. The tension is there. You hear it when you talk to native Catalans and you can see it in the graffiti.
Now, imagine what happens if just 10,000 newly remote Americans or Europeans — people making an annual salary of $75,000 to $150,000 — decide they want to live in a city where a median salary is around €40,000 per year.2
Just as scaling effects have dramatically shifted incomes for the leverage class, the same will happen for cities, but instead of the power law favoring the cities with the biggest economic engines, it will favor the cities (and towns and suburbs) with the best lifestyles.
Longtime residents will rebel. There will be anti-foreigner sentiment as a kind of global gentrification happens and people fight for the souls of their cities.
There’s a quote in the WaPo article and it may look like insipid politico-speak but I think it says everything you need to know about how this is going to play out:
“There is a tremendous opportunity, excitement and potential,” says Ulster County Executive Pat Ryan, “but also great challenges if we’re not thoughtful, and the inequality and inequity continue to grow.”
Those are not sober words.
Pat Ryan, I don’t know a thing about him, except that he’s human and humans respond to incentives.
And he, along with every other mayor and county executive in the world just had the same thought: holy fuck we’re going to make a lot of money on this… if… we play our cards right. Remember when we had to give out all those tax breaks to lure corporations here? Remember how Amazon gleefully bent us over the table just to talk about locating a warehouse here? Fuck that noise, we’re going straight to the source.
Of course, there will be, uh, you know, great challenges if we’re not thoughtful about… I’m sorry — it’s hard to concentrate — there’s a giant hose of money that just fell from the sky — what was the question?
Follow the money, McNutty.
If we play our cards right. That clause is doing a lot of work, because there will be winners and losers here. Pat Ryan happens to be sitting at the head of some very desirable real estate, but not every civic leader is so lucky.
Coming soon: towns, cities, states, and any other polity with the power to tax will be fighting to attract high-income remote workers.
If this sounds familiar, then maybe you read about it in The Sovereign Individual or maybe you read this on Entrepreneur.com:
“Meanwhile, some destinations are making their best pitch to attract remote workers, and others will likely want to follow suit. States like Vermont, Maine and Oklahoma already had grant programs in place, offering cash to full-time remote workers that relocated somewhere within their borders. Beyond the U.S., countries like Estonia and Georgia in Eastern Europe, and Bermuda and Barbados in the Caribbean are greatly relaxing their worker visa requirements in an effort to lure digital nomads, largely to boost their economies suffering from a drop off in tourism.”— With Working from Home Here to Stay, Expect These 5 Things to Change
Cities that are slow to adjust will lose out.
Cities that are slow to adjust and have things like bad weather and poor governance working against them could face a vicious cycle — as high-income workers leave, the tax base shrinks and services decline, which pushes the local middle to the suburbs. Less disposable income flows into cultural endeavors, making it a less attractive place for artists and other cultural producers, which makes it less attractive for high-income people, and so on.
I see the death of some cities, just not the ones people are talking about right now.
I’m not a political scientist, I’m just a filmmaker and you really shouldn’t listen to me, but my gut is telling me that as states compete for residents, we may apocalypse, I mean uncover, some unsavory truths about democracy. That is to say, that people don’t really care about it that much. Sure, they care about a lot of the things that usually come with democracy, but the actual voting, well it’s hard when the choices suck and for some reason I can never find the checkbox for “end the drug war and also the other wars.”
As people figure out that it’s easier to vote with their feet than it is to change their local political economy, they’ll go where the going is good.
Whatever happens, if it happens, will happen fast.
One salient feature of the pandemic is that it force a lot of complacent people to make drastic and swift changes in their lives. If you think of change as a kind of muscle that can be flexed, then I think we have a lot of people who primed to respond quickly to incentives. The more you make big life-altering decisions, the easier it is to make more of them. The world is getting less inertia-y, or something.
And one salient feature of rapid social and economic change is conflict.
As progressives leave expensive cities in search of better lifestyles in towns and cities around the U.S. (and the world), they’ll bring their progressive politics, higher real estate prices, and kombucha.
Did you read the article? It’s already happening and I don’t know anything about book publishing but I wouldn’t be surprised if the writer, Karen Heller, already has a book deal for an explainer on the 2028 election.
Ironically, the great reshuffling could be a moderating political force in the U.S. If progressives migrate to red states (who’s got the warm weather and low taxes?), then red states will turn bluer and the blue states they leave behind will redden. Theoretically, this could place more states into purple territory, forcing senatorial and presidential candidates to play more to moderate median voters and less to the partisans.
Or maybe it will lead to violence! A lot of things in America lead to violence!
If you’re a tech worker living in the U.S., you might be reading this thinking “hey, this all sounds pretty good for me.”
Tranquilo amigo, because companies will pretty quickly figure out (if they haven’t already) that if all their employees are remote, it doesn’t exactly make sense to only hire American citizens. Why hire an American engineer who expects to make $130,000/year when you can hire one in Warsaw or Kigali who expects half or a third of that?
High-skilled English-speaking people around the world will have access to the global labor market and just as outsourcing in the 90s led to rising incomes for millions of poor around the world (and the resultant resentment and its attendant political strife of left-behind U.S. factory workers), we’ll see millions of people around the world lifted from their previously-tethered-to-the-local-economy jobs to global remote jobs.
I remember hearing somewhere that whenever large groups of people are lowered in status, there is strife.
Of course, the biggest losers from all of this will be the precarious class, people without high incomes or the ability to move. Luckily, American elites, will rise to the challenge of the day and, realizing how fucked up things are, will
finally figure out how to create a society with work, opportunity, and dignity for all occasionally use the precarious class as a pawn in a Girardian competition for status, if they’re not too busy with that goddamn money hose that just fell from the sky.
A massive potential energy is about to go kinetic.
It will happen fast.
Things could get ugly.
I hope they don’t.
Average is over, as Tyler Cowen says. Stay frosty.
Time zones will cause friction in the short-term, but as remote work evolves, some companies will require you to live +/- a few hours of a single timezone and others will compete for workers by allowing truly global remote work, basing teams around time zones. ↩
These are loose numbers based on informal conversations I had over the course of two months, but I’m in the ballpark. ↩