Dallas is coming out of the pandemic stronger than many other metro areas but with a new challenge: rivals looking to attract talent away with remote-work-friendly incentives.
How cities recover from the nation’s worst health crisis in a century has a lot to do with how they fared before the pandemic, how they handled the thick of it months ago and how they’re viewed by remote workers with good salaries to spend.
Almost 40% of U.S. workers are in jobs that can be done remotely, and some cities are trying to capitalize on the pandemic’s big reveal: that working from home works. Smaller and medium-size cities are offering one-time incentives of up to $12,000 to attract remote workers as part of their economic development efforts.
Already hot job markets like Salt Lake City, Austin and Boise, Idaho, continued to boom during the pandemic as workers and businesses sought lower-cost places to ride it out.
Salt Lake City kept its momentum because it didn’t totally shut down, said Derek Miller, president and CEO of the Salt Lake City Chamber and Downtown Alliance. Miller said the metro area of more than 1.2 million people benefited from Utah’s holistic approach to staying open — crafted by businesses.
“It was a grass-roots, bottom-up approach where ultimately businesses produced a document adopted by the state and local governments,” Miller said.
Utah didn’t have a mask mandate until August and worked to keep politics out of the decision as more than 10,000 businesses posted signs that read: “Stay safe to stay open.”
Utah had an impressive 2.8% unemployment rate in April.
Another state that tapped its business community for ideas during the pandemic was Georgia.
The Metro Atlanta Chamber recruited retired CEOs, current C-level leaders, Fortune 1000 board members, and college and university presidents to come up with more than 120 policy recommendations for the Georgia General Assembly when it met in June 2020.
Georgia’s unemployment rate of 4.3% in April was also well below the national average.
Before the pandemic, large metro areas nationwide were experiencing growth among college-educated and high-income households, but the pandemic paused those trends, according to the Federal Reserve Bank of Dallas. And as lockdowns eased, homebuyers’ attention shifted to the suburbs, said Laila Assanie, a Dallas Fed economist.
At the same time, remote working took hold and is now expected to remain well above pre-pandemic levels, Assanie said. Those jobs tend to be held by people with at least a bachelor’s degree, which in the city of Dallas is 34.7% of the 25-and-older population.
A higher percentage of workers in the Dallas metro area (42%) are in remote-compatible jobs compared with both the state (37%) and nation (39%), she said.
“If people can work from anywhere, that trend can still work in our favor,” Assanie said. “If your money goes further in Texas and you can continue to work from home, that doesn’t have to be a disadvantage for us.”
Many remote and high-income workers will still prefer urban areas such as downtown and Uptown Dallas because of amenities such as fine dining, the arts and walkability, said Peter Haslag, a finance professor at Vanderbilt University who co-authored a new report on migration changes during the pandemic.
Still, Dallas County falls far short of Collin County to the north in all measures of population growth and net migration, he said. The Dallas-Fort Worth region’s population increased by 119,748 during the pandemic, but Dallas County only gained 285 residents, according to preliminary U.S. Census data. Collin County’s population increased by 36,997 and Denton County grew by 30,559.
“But it should be reassuring that at the state level, Texas remains one of the hottest markets,” Haslag said.
Tulsa; Topeka, Kan.; Northwest Arkansas; and West Virginia are among dozens of places around the U.S. that have come up with programs to benefit from the decoupling of jobs from physical locations.
Public- and private-funded incentives of as much as $12,000 for workers moving to the area and the prospect of owning an affordable home in a less-crowded place are enough inspiration for some people looking to make a change.
Topeka has two incentive programs: one with local employers and another for independent remote workers. Since the beginning of last year, 49 people have moved to the city with an average salary of $87,000 and an economic impact of almost $4 million.
“There are trailing partners and other family members, and some are renting and some purchase homes,” said Barbara Stapleton, vice president of the region’s economic development arm called Go Topeka. The program requires proof of employment and pays as much as $5,000 to renters and $10,000 to people buying a home.
San Francisco is a concentrated example for how remote workers have the potential to really change cities. Major tech companies have announced subleases of more than 16.3 million square feet, according to a report in SFGate. That’s worse than the dot-com bust and compares with about 1 million square feet of office space typically available for subleasing in the market, according to data from CBRE.
Other cities like Nashville and Austin are coming out of the pandemic with strong tailwinds from huge development projects underway.
Oracle Corp. is building a $1.2 billion, 65-acre riverbank campus in Nashville. The project comes with a promise to add 8,500 high-paying jobs over the next decade with average salaries of $110,000. In the meantime, Nashville can count on 11,500 ancillary jobs and 10,000 temporary construction jobs.
Austin has two big projects underway. Tesla’s vehicle and battery plant promises a minimum of 5,000 jobs, and Apple’s new $1 billion campus on 133 acres in North Austin will be ready next year. Austin is also one of a few cities that Samsung is eyeing for a $17 billion chip-making plant that will create 1,800 high-paying jobs.
Haslag, the Vanderbilt professor, studied 300,000 residential interstate moves over the past four years. The results showed that 10% to 20% of moves between April 2020 and February 2021 were influenced by COVID-19, with a significant shift in migration toward smaller cities, lower-cost-of-living locations and places with fewer pandemic-related restrictions.
“The trend of people moving for lifestyle reasons during the pandemic will continue,” Haslag said. “If people are allowed to live where they want to live, they’re going to.”