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Since the pandemic, most of the mountain counties in North Carolina have seen an influx of high-income newcomers. In four counties, the average income of the newcomers tops $100,000 a year.
Curiously, this in-migration of affluent newcomers stops when you hit the Virginia state line.
Why?
That’s the question we’ll explore today.
We see this phenomenon most clearly at the state line between Grayson County and the four counties to its south — one in Tennessee, three in North Carolina.
The median household income of those counties is not terribly different. Grayson, at $43,348, is a little better off than Alleghany County, North Carolina ($42,115), and somewhat behind Johnson County, Tennessee ($47,571), and Ashe County, North Carolina ($49,176). Only Surry County, North Carolina, stands out at $58,291.
However, when we look at who’s moving into those counties, we see a big difference. In Grayson County, newcomers are making $57,513, according to the Internal Revenue Service, which knows such things. In Ashe County, the newcomers are making $93,449. In Alleghany County, they’re making $97,625. In Johnson County, they’re making $98,213. Only Surry County stands apart — it has the highest median income of this cluster of counties, but the lowest income for its newcomers: $57,041.
For what it’s worth, Surry is also not completely a mountain county. It’s on the eastern slopes of the Blue Ridge but also ranges onto the Piedmont. This may be important for what’s to come.
North Carolina has 23 counties that are generally classified as mountain counties. All but one of them has seen more people move in than move out — the only exception is Watauga County. All of them, even Watauga, have seen newcomers make significantly more than the existing residents. In all but three of the counties, the newcomers have made at least 10% more than the locals, but that figure doesn’t capture the true scale of what’s happened. In 13 of the counties, the newcomers have made at least 31.8% more than the locals. In six of the counties, the newcomers have made more than 53% as much as the locals. In two, the newcomers have made more than twice as much as the locals.
Now let’s frame that a different way. In four of those 23 counties, the newcomers have average incomes of $100,000 or more. The highest figures are in Macon County, down in North Carolina’s southwest tip, bordering Georgia and South Carolina. The median household income there is $51,042, about the same as our Mecklenburg County and Greensville County and just a little more than our Carroll County and Patrick County. However, the people moving into Macon County are making $133,313. That’s 161.1% more than the locals. Another comparison: That’s more than what people moving into Loudoun County, the richest county in America, are making. They’re averaging $129,410 a year.
So let’s think about this: Here’s a county in the North Carolina mountains, which starts out looking not that much different income-wise than our Carroll or Patrick, but it’s having a mini-Loudoun County move in.
It’s not unusual for newcomers to make more money than local residents — it does take money to move — but what’s happening in North Carolina has happened since the pandemic. In 2019, the last full year before the pandemic, newcomers to Macon County were making $68,954. Now that’s nearly doubled.
We see those same trends, just at somewhat less dramatic levels, in other counties in the North Carolina mountains.
In Avery County, the home of Grandfather Mountain, the median household income is $53,313. Before the pandemic, newcomers were making $57,018. Now they’re making $109,632.
The reason I’m focused on North Carolina’s mountain counties is that we’re not seeing the same trend in Virginia’s mountain counties.
In many, but not all, counties, we’re seeing more people move in than move out. And we see them making more money than the ones already there — but nothing on the scale of what’s happening in North Carolina.
Let’s continue up the spine of the Blue Ridge Mountains and see what happens.
We looked at Grayson County above, but let’s repeat it again. Newcomers there are making $57,513. That’s less than all but two of the North Carolina counties.
In Carroll County, the newcomers are making $55,213. That’s less than all but one of the North Carolina counties.
In Patrick County, the newcomers are making $50,472, less than in any of the North Carolina mountain counties.
Whatever monied migration is happening in North Carolina is not happening here. It doesn’t fade out, either — it stops abruptly at the state line, then starts to pick up again as you get closer to Roanoke.
In Floyd County, newcomers are making $60,138, but that’s still lower than all but four of the North Carolina mountain counties.
Even Roanoke County wouldn’t rank well with the North Carolina counties: Newcomers there are making $67,174; in North Carolina, 14 rural counties are attracting more affluent newcomers than our most suburban mountain county (maybe more like a suburban valley county).
The biggest exception in this part of the state is Franklin County, where newcomers are making $102,925 — but that’s largely a function of Smith Mountain Lake, not the Blue Ridge Mountains. Not until you get further north, to Nelson and Albemarle around Charlottesville, do we more consistently see newcomers making $100,000 or more.
Now, some of you may be wondering, so what? Why do we need a bunch of rich people around anyway? That’s a fair question. You can make your own judgment on that. In purely economic terms, these newcomers are bringing a lot of disposable income — spending money — into rural communities.
That may both drive up home prices (good news if you’re selling, bad news if you’re buying) but also help to support local businesses.
The question I’m concerned with is: Why is this happening? Why are North Carolina’s mountain counties seeing this influx of affluent newcomers but Virginia’s aren’t?
There are many possible answers:
North Carolina is seeing more people move in than Virginia overall. For years now, Virginia has been seeing more people move out than move in. That trend may be about to reverse — some preliminary data suggests it already has — but, overall, North Carolina’s migration trends give it more opportunity to attract new residents, particularly affluent ones. In 2022, the last year the IRS has data for, the people moving into Virginia made less than those moving out ($80,376 vs. $100,559). By contrast, the people moving into North Carolina made more than those moving out ($86,821 vs. $80,610). In general, domestic migration is making North Carolina more affluent while it’s making Virginia less so. That’s the baseline. Now let’s look at the mountain counties specifically.
North Carolina’s mountains have a more developed tourism industry than Virginia’s. “When you look at employment in Recreation, Accommodation, Food Services, Arts and Entertainment, 6 percent of Grayson County’s workforce is employed in these industries, lower than Virginia’s 8 percent,” said Hamilton Lombard, a demographer with the University of Virginia’s Weldon Cooper Center for Public Service via email. “In Watauga County, which Boone is located in, 18 percent or over 4,600 residents work in these industries, which include several different ski courses and some top tier golf courses. When you look at this employment data across Virginia none of our rural areas have recreation industries developed to the extent as you see in North Carolina’s mountains or coast.”
Why is this? Lombard suggests that North Carolina, over the years, had more incentive to develop the tourism potential of its mountains than Virginia did. “I don’t believe North Carolina’s geography gives it any advantage in developing and supporting its recreation industry, if anything I would think that Virginia’s proximity to DC and Northeast Corridor should favor it more in attracting vacationers and second home buyers. But the amount of wealth which Virginia generated as Northern Virginia grew rapidly in the decades before the 2010s meant the state had less reason to focus on tourism than poorer North Carolina had.”
That tourism may have given North Carolina’s mountain counties a reputation as not just a good place to visit but also a good place to live.
It’s likely that some of the income growth in North Carolina’s mountain counties is coming from remote workers. In Ashe County, N.C., 8.22% of the workforce now works remotely. In Alleghany County, N.C., 8.08% do. In Grayson County, just across the border, the figure is 4.86%. While the growth rate of remote workers in Ashe County, N.C., and Grayson County is about the same (15.34% since 2019 in Ashe; 14.57% in Grayson), the growth rate in Alleghany County, N.C., is much higher: 47.48%.
North Carolina now has only three mountain counties where the percentage of remote workers, as a share of the total workforce, is less than 5%. Virginia has 13 mountain counties where the remote worker share is under 5%.
North Carolina has four mountain counties where the remote worker share tops 10%, with the highest being 14.4% in Buncombe County, home to Asheville. Virginia has four counties close to Roanoke where the share of remote workers is in double digits — Botetourt County, Floyd County, Montgomery County, Roanoke County — but the highest of those is Roanoke County, at 12.5%.
Virginia has four counties in or near the mountains that top that, but they are also far removed from Southwest Virginia (Highland and Rappahannock at 15.2%, Albemarle at 18.0%, Nelson at 22.8%), before we even argue about whether to count Loudoun County (23.5%). While Loudoun is technically on the eastern edge of the Blue Ridge, for the point we’re talking about here, it seems unfair to count Loudoun.
The point is that North Carolina’s mountain counties, with just a few exceptions, consistently have a higher share of remote workers than Virginia’s mountain counties do until you get within range of Charlottesville and Northern Virginia (Highland being the oddity).
What does that mean? It means people are moving to North Carolina for some other reason. Reputation? Lower tax rates? (North Carolina’s income tax rate is 4.5%; Virginia’s is 5.75%). The data doesn’t say. Lombard, though, points out that increasing the number of remote workers does hold economic opportunity for Virginia (and other places).
“Well before the pandemic a number of social scientists had observed that as the economy shifted to being more service based, giving people more geographic flexibility than in the past, migration tended to flow to places with more amenities,” Lombard says. “Richard Florida wrote a whole book about this but there have been plenty of academic papers documenting this as well. Recent income and migration data both show that pandemic has made this trend much more prominent. What I find the most remarkable about the IRS data is that while many states, including Virginia, spend tens of thousands of dollars per job in attracting employers to a community, we are now seeing high paying jobs being created organically in rural counties across the country from remote workers relocating. As the relative success of recreation communities in attracting high salary remote workers becomes more noticeable in the next couple of years I would expect more communities and states will prioritize making themselves an attractive place to visit and live in as part of their economic development strategy.”
Put another way, will Virginia’s mountain counties try to become more like North Carolina’s?
In this week’s political newsletter:
I write a weekly political newsletter, West of the Capital, that goes out Friday afternoons. Here’s what’s in this week’s edition:
- The Virginia mayor who won’t have a town to govern.
- Two examples of how ranked-choice voting would help Republicans.
- One U.S. senator vows to “kill” Postal Service plan to slow rural mail delivery.
- Del. Sam Rasoul, D-Roanoke, draws an opponent.
- Meet Virginia’s electors to the Electoral College and get a link for how to livestream its meeting next week.
- What if Thomas Jefferson had been right about one piece of foreign policy advice where he turned out to be very wrong?
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