Corrections & Clarifications: An earlier version of this story misstated Shahil Shrestha’s home country, which is Nepal.
Shanelle Sherlin was living in limbo last year after she gave up her apartment in Los Angeles and moved to her parents’ house in Vail, Colorado, where she worked remotely at the height of the pandemic.
So when the 30-year-old social media strategist heard that a nonprofit in northwest Arkansas was offering $10,000 – and a mountain bike! – to qualified out-of-towners to relocate to the area to work remotely, she quickly applied.
Last week, she moved into a 3,400-square-foot, four-bedroom house in the Ozark Mountains that she bought for $405,000, where she hopes to fulfill her real estate investment dreams by living upstairs and renting out the lower floor. A comparable setup in a Los Angeles neighborhood would have been out of reach at a cost of up to $2 million.
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“It’s just not feasible to really buy something” in LA, says Sherlin, a hiking and biking enthusiast. “I’m so excited.”
Northwest Arkansas is among a growing crop of cities, states and regions offering as much as $20,000 to entice newly remote workers to move to their areas. Some, like the Ozarks, are trying to create a pool of high-skilled workers to help fill job openings. Others aim to build up a skilled workforce to attract companies. Still, others are combating longstanding population declines or are looking to fill new housing complexes.
The efforts are turning the traditional building blocks of economic development upside down.
Typically, cities have spent hundreds of millions of dollars offering tax breaks and other incentives to lure companies.
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The handful of cities with the largest clusters of innovative companies – such as San Francisco, Seattle, San Jose, Washington, D.C., and Boston – have attracted the most workers, helping them draw still more businesses. Smaller towns that lacked vibrant ecosystems of employers and workers were left with shrinking tax bases that further deepened their struggles.
The pandemic has shaken up the formula by severing the ties between where a person lives and works. As a result, smaller communities with lower costs of living, less congestion and, at least by some measures, a better quality of life are aggressively courting remote workers.
The employees can then help draw leading-edge manufacturers and startups, and spend money in town, bolstering the local economy and expanding the tax base.
“We’re breaking the cycle,” says Adam Ozimek, chief economist of Upwork, an online freelancing platform. Cities “can appeal directly to people instead of the companies who employ them.”
Remote work sparks more offers
Although such programs began before the pandemic, they have accelerated sharply since the health crisis allowed many more Americans to work from home.
Forty-seven percent of company leaders surveyed by research firm Gartner last year said they planned to allow employees to continue working remotely.
At least 45 communities across the country are offering incentives to attract remote workers, up from a couple dozen late last year, according to MakeMyMove.com, a website that aggregates the offers. In addition to northwest Arkansas, areas such as southwest Michigan and Morgantown, West Virginia, have joined older, pre-pandemic programs in Tulsa, Oklahoma; Vermont; and Nebraska.
Evan Hock, a vice president of TMap, a recruiting firm that runs the website, expects an additional 50 or so communities to join the fray within a year. Already, several thousand people have picked up stakes and quickly moved to new cities to take advantage of the offers, Hock estimates.
While that may not sound like much, program coordinators say they’re generating publicity that will stoke a more organic shift of teleworkers from large metro areas to smaller communities over time. As a result of the remote work trend, 14 million to 23 million U.S. households intend to move, chiefly from major cities to less expensive housing markets, according to an Upwork study.
“A lot of these towns have lost population not because they’re not good places to live but because people have gone elsewhere to find work,” Hock says.
Nearly all the initiatives require remote workers to stay in the area at least a year or two. Most have a minimum income threshold. Some require new residents to buy a house.
The cash incentives, Hock says, are largely designed to cover moving costs. “It de-risks it,” he says, noting the economic impact on a community is several times larger than the cost of the incentive.
The communities’ pitches on MakeMyMove.com read like rival brochures.
“More than just pretty landscapes, Vermont residents enjoy award-winning schools, a thriving small business environment, craft breweries and Bernie Sanders,” says the offer from Montpelier.
“Find out what Hoosier Hospitality is all about,” reads the Jasper, Indiana, spiel. “This close-knit community punches above its weight class.”
Some offers are off the beaten path. Honolulu, whose tourism industry was flattened by the pandemic, is dangling $2,500 to mainlanders to cover airfare as long as they stay at least 30 days in the hopes many will never want to leave paradise. Maine is offering a tax credit to pay back student loans.
Others add sweeteners, like the Ozarks’ bike. Topeka is tossing in $1,000 in free Jimmy Johns sandwiches. West Virginia provides a year of free ziplining, rock-climbing and white-water rafting.
Work from home – somewhere new
Northwest Arkansas isn’t beset by a shrinking population. It’s one of the nation’s fastest-growing economies, anchored by Walmart, Tyson Foods and J.B. Hunt Transport Services. It’s also a bucolic haven brimming with lakes, rivers, hiking and biking trials, and a leading arts and cultural center.
But the region, with a low unemployment rate of 3% to 4%, is struggling to fill about 10,000 mostly technology-related job openings.
“We’re short of … tech talent, the type of people you need for future growth,” says Nelson Peacock, CEO of the nonprofit Northwest Arkansas Council, which launched the program last fall with a $1 million donation from the Walton Family Foundation. Officials also would like to attract more entrepreneurs, he says. “We’re not looking for just people. … We’re being really selective.”
“We decided to do the program to get ourselves put on the map,” Peacock adds, citing the growing list of small and midsize towns jostling for remote workers.
After receiving about 32,000 applications, the council has chosen 43 recipients, some of whom, like Sherlin, have already moved in. The group plans to pick an additional 60 or so by fall.
Among the recipients: a digital marketing manager from Denver, an LA music producer and a San Francisco cloud technology manager.
In addition to the reasonable home prices, with a median of $229,000, Sherlin was drawn to the area by the $10,000 incentive and bucolic surroundings. She's "able to walk into nature" from her house, which is next to hiking trails and a lake, she says.
Plus, “here, driving 30 minutes gets you 30 miles,” she says. “In LA, it gets you 2 miles.”
After she applied, two months went by and Sherlin still hadn’t heard if she was accepted. She grew jittery. “I said, ‘I have to get this.’”
As a backup, she applied to Tulsa’s program, which also features a $10,000 offer, and was accepted. But before she pivoted to Tulsa, she got the nod from northwest Arkansas.
'A diverse and inclusive community'
Tulsa Remote, among the older and larger programs, was started in 2018 by the George Kaiser Family Foundation, which helps local children and families. Although the city isn’t losing residents, population growth has slowed in recent years. And a middling 31.5% of adults 25 and older have a bachelor’s degree or higher.
“Every community is in a fight for talent,” says Ben Stewart, the program’s executive director, adding he hopes skilled workers will attract companies, helping Tulsa compete with the likes of San Francisco, New York and Washington. New higher-income residents and their families also tend to shop, boosting the local economy and tax base.
“We believe there’s lots of benefits to adding population,” Stewart says, adding, “Our goal is to ensure Tulsa is a diverse and inclusive community.”
With a population of about 400,000, Tulsa touts big-city amenities such as a revitalized downtown and riverfront park, symphony orchestra and ballet, as well as a low cost of living and ease of getting around. The median-priced house costs $153,418, according to Zillow.
Besides the $10,000 grant, Tulsa Remote offers a year of free co-working space and a network of participants who help acclimate new arrivals to the city. The program, which has received more than 50,000 applications, has signed up 1,000 "members."
Cynthia Rollins, 43, CEO of a San Francisco-based technology company, was paying $2,600 a month for a 675-square-foot, one-bedroom apartment in that city when she read about Tulsa Remote online.
“I was looking to reduce my cost of living so I can travel more,” says Rollins, who moved to Tulsa in November.
Now she pays $1,000 a month less than she did in San Francisco for a 1,000-square-foot, two-bedroom apartment in a luxury high-rise downtown.
Rollins also appreciates “having a vibrant downtown environment with restaurants, bars, galleries, the symphony,” she says. “There’s big skies and you can see them from almost anywhere.”
Carel-Lee Reisman, 25, moved to Tulsa from Dallas with her partner, Theodore Reisman, late last year. “I really wanted to get out of Dallas,” says Carel-Lee, a human resource manager. “It’s way too big and hard to get to know people.”
What’s more, she says, “They’re paying me $10,000. I have no kids. I have no obligations. Why not?”
Another big factor: She and her partner, who are both Black, recently learned more about the 1921 Tulsa race massacre by watching the HBO series "Lovecraft Country" and "Watchmen."
“We felt like we wanted to make a difference and be a beacon for our ancestors who had all that taken away from them,” Carel-Lee says.
Not all of the programs are aimed at reversing the fortunes of sagging communities or filling the gaps in economic development.
West Lafayette, Indiana, is a thriving college town centered around Purdue University. The Purdue Research Foundation is developing a $1 billion mixed-use development on campus and looking to begin filling its planned 2,500 or so apartments and houses with residents.
So it’s offering remote workers who move to the complex $5,000 and the ability to use the university’s libraries and other amenities.
“If we can jump-start (the development), it would be a great thing,” says David Broeker, chief innovation and collaboration officer for the foundation. The first 10 participants will move in this fall.
Shahil Shrestha, 27, who is paying $1,200 a month for a room in a house with five roommates in Jersey City, New Jersey, will trade up to a luxury two-bedroom apartment with one roommate at Perdue for about $950.
A data analyst for a nonprofit, Shrestha looks forward to hanging out with other program participants, using Purdue’s library to help him finish his master’s degree in data science and living in a more rustic setting that reminds him of his native Nepal.
“I do crave an environment that’s less busy,” he says.
Ozimek says the remote-worker enticements eventually could lose their luster if they’re offered by too many towns.
Hock says he isn’t worried.
“I think in the future, we’re going to see the incentives get bigger and bigger,” he says.
This article originally appeared on USA TODAY: Remote work incentives expand as smaller cities try to attract talent