Oct 23, 2020Future of remote20 min read
How remote work will change our cities
The 2020 migration
There’s been a lot of talk recently about an ‘exodus’ from cities. In 2020, it’s not hard to see why. Most cities are going in and out of restrictions around COVID-19. At the bare minimum, there are limitations on gatherings and being within close proximity to large groups of people. It’s only logical to think that being in a big, densely populated city is not ideal right now. By default, many day to day activities in large cities involve being around other people. Social distancing is more of an extreme adjustment in urban areas. In a time when you aren’t required to be in a city for an office, why not go somewhere else?
Unfortunately, debates on the effects of remote work vs. the effects of the pandemic on major cities are incorrectly merging. Anyone involved in the startup scene on Twitter knows that San Francisco is seeing a large exodus. Rent has declined by 31% in one of the most expensive markets in the world. This would lead one to believe that the city has seen decades of rapid decline crammed into a year. New York has seen something similar. But this is only measuring what happens in the short term. How many of these people are just putting their things into storage units to come back to them later?
Certainly to an extent the two are related. The pandemic is what forced the majority of the world to embrace remote work. While it’s unlikely we will see the office disappear entirely, the working world will undeniably shift. We are seeing that already with companies like Facebook and Quora announcing they’re not only staying remote forever, but embracing a remote-first culture. It’s impossible to know exactly what % of the world will stay remote. What we can know is that the percentage of people working remotely worldwide will be a multiple of what it was before.
Why did people live in cities before remote work?
Traditionally, you haven’t really been able to ‘choose’ where you live for most of your life. Here’s how it typically goes:
Stage 1: Adolescence — age 0 to 18 Live with parents/family as you grow up, likely in the area they need to live for work.
Stage 2: Education — age 18 to 22 Many leave their childhood home for the first time either to attend university or learn a profession elsewhere.
Stage 3: Find work — age 22 to 65 There is certainly some choice here, but for the most part, people would choose locations based on good career opportunities.
Stage 4: Retirement — age 65+ Arguably the only time in your life you get to really choose where you live.
Simply put: you lived where you needed to for work. Wherever you could find a job. This would differ based on your industry. Someone in hospitality is likely to work in a tourist hotspot. If you are a teacher, you likely live in the town you could find a teaching job in. Even if you run your own cleaning business, you stay where you have the most clients. Some professions, like police work or mail delivery, could in theory be done anywhere, but you would very rarely request a transfer. The cost of switching cities has historically been astronomical. Cities exploded in popularity for several obvious reasons. Urban areas not only hold a larger number of jobs due to population, but also a greater diversity of professions. Young people without experience can find work at cafes and restaurants. Career professionals were drawn into cities by necessity. That last point is a big one. If you are a company, you want to have your headquarter location where the most viable talent is. Pre-remote work, this is by default in a city. It statistically has to be.
What’s happening to our cities right now?
As touched upon above, there is a very real exodus happening in many cities currently. We should note that the city growth boom was already leveling off before the pandemic. This suggests that underlying push factors, such as high costs of living, were already at play. Since people were rarely barred from moving in between locations domestically, the pandemic lockdown ironically caused a bustle of movement. People wanted to either run from virus hot spots, or simply be somewhere easier to live during a rough time.
Right from the start, wealthy people within cities moved to vacation homes or rented spots in nature to ride out the storm. When the universities closed, students went home to live with family members. Many young people out of school also moved back home, either because they lost their jobs or simply to avoid complete isolation during lockdown.
When the pandemic started to move from a new shock to more of a temporary normal, things began to adjust. The economy started to recover, waves of mass layoffs slowed and people adjusted to working from home. The working population suddenly had a realization that us remote workers had long ago: I’m free to choose to live wherever I want.
This is an oversimplification. As someone who typically works from around 5-10 different countries in a given year, I can attest that it is currently not possible to work from wherever you want (particularly if that location is abroad). I am constantly reminding people that they are getting a poor sample of true remote work.
Still, people who had lived in major cities for much of their adult lives really started to question if they truly wanted to live where they were. People decided to spend the summer out of the city in the mountains. Now that the weather is getting colder, more are going to the deserts of Utah and Nevada. Many startup founders have gone down to Austin, Texas.
Currently, this migration seems fairly temperamental. Again, many of these people migrating aren’t moving all their possessions. They are storing everything for a TBD return date to the cities in the future. It’s a sample of what’s coming next. Many of the young people migrating currently don’t yet know whether they will need to return to their urban abodes. Some are just waiting to see what places will look like when the dust settles. The reality of truly being able to live where you want has not yet sunk in for most.
The long-term effect
A new life timeline A large fraction of the population now has this living timeline: Stage 1: Adolescence — age 0 to 18 Live with parents/family as you grow up, likely in the area they need to live for work.
Stage 2: Education — age 18 to 22 Many leave their childhood home for the first time either to attend university or learn a profession elsewhere (although this too may soon be remote).
Stage 3: Find work — age 22+ Choose where you want to live and work remotely. We now have a somewhat narrowed question to answer:
What effect will x% of the population reaching location independence at age 22 instead of 65 have on urban areas?
Why will we choose to live in certain places?
Since we won’t be choosing where to live based on where we work, it’s useful to examine why we would choose to live somewhere, even if these reasons are biased.
1. Pleasure or preference Perhaps the most common reason: people will choose to live where they think is pleasant. There are many things that go into this. Weather and climate, local culture, food and nightlife, access to activities, etc. Interests and lifestyle will clearly play a significant role in this living shift. If you like to mountain bike weekly, you probably will now choose to live in Omaha, Nebraska. Similarly, if you enjoy bright sunlight, you won’t be opting to move to London or Edinburgh.
2. Cost of living The second obvious factor when choosing a location is cost. A $50k salary can be quite a lot, or nothing, depending on where you live. There is a reason salaries, even for lower-skilled work, are higher in cities like San Francisco. When you can work remotely, there is immense pressure to not live in the most expensive places in the world. This is a complete flip of the scenario we had before.
3. Community The last factor is the problem that the remote world has not been able to fully solve yet. It’s quite easy to have a collective community when you all live and work in the same place. People will always need a social community. Now that one’s community is not predetermined, we will choose our own, whether this be friends or family.
Keeping these in mind, we can explore some predictions for the long term – or at least the next few decades.
The impact on cities
People will move more often
Now that people aren’t locked into certain places with their job, it’s likely that we’ll see people moving more. Perhaps every few years instead of every few decades. Some will choose to be ‘nomadic’, but most will at least have a home base in some sense. Housing markets are likely to shift more rapidly as certain locations become temporarily trendy.
We’ll also see a large increase in temperamental housing infrastructure. More short/mid-term rentals will pop up. A larger fraction of furnished homes will become available, as it becomes cumbersome to move an entire house of things so often. Already we are starting to see more companies pop up to accommodate this, like Feather where you can rent home furniture. The line between leases and short term rentals, like Airbnb, will become further and further blurred. We might even see an entire middle category emerge.
This might actually help residential real estate markets, as the new generation purchases property as rentals and investments over primary residences. The entire concept of a ‘primary residence’ will probably begin to look more like a home base. People won’t ask where you live, so much as where you are based. Instead of taking a 10-day vacation to Mexico, people will take a 2 month trip to Mexico to work remotely, and rent out their home base to someone else doing the same thing.
Locations will have to compete
In January, SafetyWing published an article on building a country on the internet, where the idea of country competition is discussed. In short, countries will soon have to compete for both companies and individuals to choose them as a base. Cities and neighborhoods will have to do the same thing, as people start consciously weighing the quality of life to cost ratio.
There are certainly winners and losers here. The “cool” affordable cities that people want to live in will explode. Naturally, the cost of living will increase. Similarly, the very expensive cities with a lower quality of life will see people migrate away until the cost levels out where appropriate. In a strange way, urbanization is about to experience a truly free market for the first time.
Truthfully a certain level of a city’s appeal is inherent (you can’t choose whether or not your city is by the ocean or in a warm climate), but municipalities can still stack the deck in their favor. I suspect we will see local governments get creative in how they make themselves more appealing.
How cities can be more competitive:
- Lower the cost of living
- Increase the quality and availability of housing
- Decrease sales and property taxes
- Invest in amenities like parks and recreation spaces
- Make it easy for independent businesses to thrive
- Keep cities clean
- Provide quality schools and healthcare facilities
- Have low unemployment
- Prioritize social justice
People will spread out more
In general, we will likely see general migration from cities. It won’t be drastic, perhaps. After all, it will likely be more of a shift to desirable cities. Some people who dislike cities will certainly choose to live outside of them. While there are people who prefer to live in the middle of the forest, most want to be isolated for a short period of time only. People enjoy bars and restaurants. They like going to movies and museums. It’s easier to meet people in urban areas. In fact, it’s possible that some people who previously may not have been able to afford to live in an urban area will now be able to!
Regardless, there will be some population spread. This is natural as people adjust to their preferences. We will see hotspots emerge that people never thought of as a great place to live. Some will move to other countries, some will move to a different neighborhood. The extent to which this will happen is impossible to know, but it’s equally impossible to think that this would not further globalization.
We will design our own communities
This is perhaps the most exciting outcome for anyone who remembers dreaming with their friends as a kid of all living on the same block forever. This could now be a reality, and is somewhat already starting to happen. Close-knit startup founders are moving to Austin, Texas together. Groups of friends who can now all work remotely are getting houses together in Mexico. It’s quite possible that this sort of collective living could become the norm.
At an extreme, there is co-living. In a sense, it’s the young person’s application of commitment free communal living. It drew from the need for a community from nomads and remote workers who wanted to live in appealing places, but didn’t know anyone there. The co-living movement will continue to grow, but there is a more grassroots application that will take place.
At the simplest level, people will choose vague locations of where to live based on their friends and family. Some will even choose to share neighborhoods. This type of communal living would solve many of the emerging problems of hybrid-nomadic life. If you live next to a handful of close friends and family members, you can have a dog knowing they will happily watch after the pet while you travel. Similarly, when they want to take a winter trip to Asia, you can be the point of contact for their property rental.
While it’s impossible to say exactly what changes will occur from such a monumental shift in global livelihood, there’s reason to be optimistic. Life is becoming more flexible and less constrained. We will have the choices to build our day-to-day lives in a model how we see fit. We can prioritize what is important to us, and what we don’t need. Our lifestyle will become more efficient and more logical.
What’s more is that the benefit will be nearly universal. Wages for jobs with a physical location necessity will gradually rise as fewer people want them. Wonderful cities that have been forgotten as a reasonable living place will have an opportunity to fight for economic expansion. Increased competition will raise living standards across the board. In short, we can slowly begin to shape our lives more and more into our ideal.
About the author
Head of Growth
Sam Claassen is the Head of Growth at SafetyWing and a serial advocate for remote work. A longtime nomad himself, he has been to 65 countries while doing growth and remote work consulting for startups and accelerators. Through his work at SafetyWing, he is working with a team to create BuildingRemotely.com – a podcast, online resource and soon to be book on building a thriving remote company.