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Move here, get paid: Small communities use incentives to beckon workers

Move here, get paid: Small communities use incentives to beckon workers

Like many people around the country, Tammy Sun reassessed her work-life balance during the 16 or so months since the pandemic sent millions of office workers home.

Remote work taught Sun, CEO of Carrott Fertility, that she didn’t have to be tied to San Francisco to run the company that helps employers provide employee benefits for fertility planning.

During that same period, several small towns across the country, from Arkansas to Iowa, and from Maine to Mississippi, have been beckoning remote workers like Sun seeking to start over. For Sun, all it took was a $10,750 financial incentive from Bentonville, Ark., for her to pack her bags and move cross-country to the community best known as headquarters to Walmart.

“The pandemic has fundamentally shifted how we think about where we live and what work we do,” Sun said. “It was clear to me that being in San Francisco was no longer required in order for me to run my company.”

The pay-to-move overture by small-town America to big-city dwellers isn’t entirely new. But it has gained momentum since the pandemic, driven by several overlapping trends:

  • Remote work has caused a dramatic paradigm shift for many, demonstrating that they can be just as productive outside the workplace. And with remote work in some cases becoming permanent, many people are realizing that where they live doesn’t have to be where they work.
  • Soaring prices are making home-buying unattainable for many in big cities, forcing a flurry of them to consider smaller markets.
  • Many smaller towns are viewing the changing dynamics of work as an opportunity to draw badly needed talent. They are looking for creative ways to lure folks no longer moored to big cities by their workplaces who can bring some fresh thinking and creative ideas to the areas, fill long-standing job openings and expand tax bases.

The financial incentives are fairly meager — they certainly won’t make anyone rich. Still, the money and the prospect of starting over have been enough to woo tens of thousands of applicants, far more than the slots available.

“States recognize that we’re in a unique position right now,” said Jared Walczak, vice president of state projects at the D.C.-based Tax Foundation. “People have more mobility than ever before. For a growing number of individuals, your home doesn’t have to be near your workplace, so they’re looking to attract higher-income individuals with incentives.”

A website called MakeMyMove.com tracks some 44 offers. They range from $20,000 from Morgantown, W.Va.; to $15,000 from Montpelier, Vt.; to $5,000 from West Lafayette, Ind.; to $3,000 from Curtis, Neb.; to $1,730 from Janesville, Minn.

The program Sun chose is for northwest Arkansas, home of the state’s flagship university and Fortune 500 companies Walmart, Tyson Foods and J.B. Hunt Transport. In addition to the $10,750, the incentive includes the purchase of a road or mountain bike.

“We have one of the strongest economies in the country, but there’s a weakness in attracting talent,” said Nelson Peacock, president and CEO of the Northwest Arkansas Council, which runs the program. “Artists, creatives, engineers, tech talent, we wanted to recruit some of these people, get them to look at northwest Arkansas as they were leaving wherever they were from, be it Los Angeles, New York or Chicago.”

The incentives launched in November and will award 100 recipients for a total investment of roughly $1.075 million, and could be expanded later. Demand has vastly outpaced supply, with more than 31,000 applicants to date.

“As the pandemic was happening, we saw people leave and move to Idaho or to Texas,” Peacock said. “We wanted to do something to get ourselves on the map.”

Peacock, an Arkansas native who worked in D.C. and California before returning home, said the region is a top place to live, but is not well-known other than as home to Walmart. Part of the idea with the program is simple publicity. The other part is to help attract forward-thinking individuals who can found the next Walmart. Already, 55 percent of northwest Arkansas residents hail from out of state, according to U.S. Census Bureau figures.

Sun’s sister and her brother-in-law moved to Arkansas shortly before she did, providing a connection to the area. Speaking from the solitude of her front porch, she talked about the pluses — safety, good infrastructure, reliable WiFi — and remembered packing up her car and driving across the country to her new home.

Is luring 100 high-income individuals worth investing over $1 million? That’s a tough question to answer.

Walczak is skeptical.

“In some ways these are probably a flash in the pan,” he said. “They’re more of a marketing campaign than they are a long-term way to attract people.”

Many of these states have built-in advantages, such as less burdensome tax codes and a lower cost of living. The incentive programs may help would-be relocators start working on the numbers and looking at places they might otherwise skip.

“People aren’t going to the lowest-cost locations, but many people are finding that they don’t need to pay San Francisco prices,” said Walczak. “They can pay Raleigh, North Carolina, prices.”

Mostly, he sees the incentives as helping reel in someone who was already thinking about relocating, but not making places attractive for those who don’t want to move.

Tax-based financial incentives are commonly used to lure major businesses to an area or to fund big expansions of existing businesses. It’s much less common to see them used on an individual level.

“For workers or businesses who no longer need to be located in large urban areas this can be a great thing,” Walczak said. “But you won’t achieve this sort of result with incentives for individuals or businesses — you’ll achieve it by offering the overall package that individuals and businesses are looking for.”

Peacock said the idea is not simply to pay $10,750 to get someone to move in and pay local taxes, it’s about getting someone who will become involved in the community, start a company and maybe a family.

“We think that if we pick the right people, this will pay off exponentially,” he said.

Some programs started long before the pandemic but have seen renewed attention over the last 18 months. Maine began a tax credit in 2008 that pays off roughly $400 per month in student loan debt, initially offered only to students from local colleges as a talent retention tactic. It’s now open to college graduates from other states as well. In 2019, the program paid out about $30 million to 12,000 to 14,000 recipients. When the 2020 numbers are finalized the total may exceed $40 million.

“This is the single most powerful student debt relief program in the nation,” said Nate Wildes, executive director of Live and Work in Maine.

Wildes said at least one person from 47 states has moved to Maine since last October, though total figures aren’t yet available and it’s not clear how big a role the loan payments made in those moves.

As with northwest Arkansas, Maine touts its outdoor attractions and quality of life along with the financial incentives. The program’s boosters also hope to get Maine vacationers to make the leap and move in full time.

The state boasts midsized metros in Portland, Augusta and Bangor, but it’s Maine’s vast rural areas that have drawn the most attention, proving that at least some employees truly embrace the work-from-anywhere concept.

“This has been rural Maine’s time to shine,” said Wildes. “We saw 10 years worth of talent attraction and development in less than a year as a result of covid. The best opportunities are outside of the large metro areas. Portland, Bangor, Augusta, those are great places to live and work, but that’s a small percentage of our land mass. A lot of places seeing dramatic growth are nowhere near capacity.”

Does that mean expensive coastal metros are in for a rough future as midsized and rural areas get a bigger piece of the action? Sun doesn’t see it as a zero-sum game. She still travels for work and expects Silicon Valley to continue its central role in the tech industry.

“I don’t think the coasts have to lose in order for northwest Arkansas to gain,” she said. “I don’t see San Francisco diminishing at all in importance or becoming less of a powerhouse for innovative tech companies. But a lot of areas that maybe were previously overlooked have a fresh start to make their case and pitch to folks that they are a great place to live, to build companies, to build families and to build a community.”

Posted on August 27, 2021 in News.
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