There’s gold in them thar hills.
And, along the shore, too.
As the years go by, and more statistics come out, we’re getting a clearer picture of how the pandemic has reshaped America — or, at least, our part of it.
We’ve seen for a while that the pandemic has accelerated a trend that was getting underway pre-pandemic: a migration of people out of many metro areas into some, though not all, rural areas.
Just as a refresher, here’s the map:
Keep in mind that many of those rural areas are still losing population because, with aging populations and declining birth rates, deaths outnumber both births and all this net in-migration. Or, to put it more colorfully, hearses still outnumber strollers and moving vans.
Anyway, we’ve had that. Here’s what’s new: We now have income figures for those new residents. In all but 10 of Virginia’s 133 counties and cities, the incomes of those moving in during 2021-2022 were higher than those who moved in during 2018-2019, just before the pandemic.
In some places, those incomes were a lot higher. The biggest income jumps were in rural counties along the Blue Ridge Mountains and along the Chesapeake Bay, places that some demographers have taken to calling “rural resort” communities because of the types of people they’re attracting: high-income earners who often can work remotely.
Before we go further, a shout-out to Hamilton Lombard, a demographer at the Weldon Cooper Center for Public Service at the University of Virginia. He’s the one who took data from the Internal Revenue Service and crunched the numbers so that even a demographic layman like me can make sense of them. The interpretations are mine, so if you don’t like them, blame me, not him.
First, let’s look at where the largest percentage increases are:
Fifteen localities in Virginia saw the incomes of the post-pandemic newcomers rank 30% or more higher than the pre-pandemic newcomers. Of those, seven are counties with some mountains, another seven are localities along the Chesapeake Bay. The remaining locality is Goochland County, just west of Richmond, which sits in what is now one of the fastest-growing parts of the state. It's an outlier, but it's an outlier that makes sense.
On a percentage basis, the place with the biggest income gap between post-pandemic and pre-pandemic newcomers was Bath County, where the income jump was 92%. Next door in Highland County, the jump was 68%. We should be cautious of both; the percentages are undoubtedly real, but keep in mind that these are small counties so it doesn't take many people to make a difference. Highland is the least-populated county in the state, with fewer than 2,300 people. Still, this is a county that has lost population in all but one census tract since 1950, but now is gaining people again — and the people it's gaining tend to be affluent. As for just how affluent, we'll get to that. Just sit tight!
Another big income jumper was Rappahannock County, where newcomers post-pandemic made 89% more than their pre-pandemic counterparts. Otherwise, the increases elsewhere were “only” in the 32% to 59% range.
The only places that didn't experience much (or any) of an income change among newcomers were a cluster of counties in Southside and some in the state's westernmost corner — although you'll see that others in Southwest Virginia saw healthy increases. Washington County was up 28%, so it almost makes the top tier list; Scott County was up 25%, Smyth County up 24%. As for those Southside counties, especially those that saw income levels of newcomers drop, I refer you to my earlier column which addressed that phenomenon in that part of the state.
Now let's look at the data a different way — by actual income, not percentage increases.
This map shows the incomes of the new post-pandemic residents. We shouldn't be surprised that it looks somewhat different. Northern Virginia is always going to show up on any map of high income-earners. What we see here, though, is that high income growth moving west toward the Blue Ridge — into Fauquier and, yes, tiny Rappahannock. We also see some high figures in Albemarle County, in Goochland County west of Richmond and Kent County east of Richmond, and some of those counties along the Chesapeake Bay. We've been seeing those trends for some time along the bay; now we're seeing more of them.
Notice, though, how the darker, more affluent, colors continue down the Blue Ridge and then take a leapfrog down to Washington County. You'll also notice that Bath and Highland stand out here. The threshold for the darkest color on this map was $100,000. Highland just missed that cut; its newcomers are making $96,473 per household. In Bath, $80,376.
Here's where we get to the compare-and-contrast stage.
This map shows median household income. (You can find the interactive version on the National Institutes of Health site, of all places.) Now let's compare the one above that just deals with newcomers. When we see high-income earners moving into, say, Fauquier and Rappahannock, that's not a surprise. Those counties already have high median incomes.
The real contrast comes elsewhere — in the mountains and by the bay.
The biggest contrast is in Northampton County on the Eastern Shore. The median household income there is $54,693. Now we have households moving in that are making $100,987. Same thing in the mountains: In Highland, the median household income is $57,070. Now we have households moving in that are making $96,473.
There are multiple implications to this, including some we probably don't realize yet.
On the plus side: This is bringing a lot more disposable income into those communities. If some of that income is spent locally, that's good for local businesses and the local economy in general.
Also on the plus side: We're seeing a fast rate of new business formation in some of these rural areas that are seeing these influxes of high-income residents. Since 2019, the highest rate has been along the Chesapeake Bay, followed by Southwest Virginia. Northern Virginia, meanwhile, is dead last. This is as if the economic world has been turned upside down.
On the not-so-plus side: This is undoubtedly driving up housing prices; we've all heard stories about buyers showing up ready to pay cash for a home as soon as it goes on the market. Good for the seller, maybe not for those trying to get into the housing market and finding themselves priced out.
These income jumps also skew school funding formulas, by making a community look more affluent than it really is. I dealt with that in a previous column; these figures will only exacerbate that.
So what's driving this migration? Several things:
Counties that rank high in 'natural amenities' tend to attract the most affluent newcomers.
One of the many services your federal government provides is the “natural amenities” scale compiled by the U.S. Department of Agriculture, which takes into account the “environmental qualities most people prefer.” Now, before anyone gets into arguments over that, let's skip over whether this is a worthy government function and whether the government has gotten the rankings right. Instead, let's focus on this: You'll see the places in Virginia that rank highest (although not high enough in my opinion) are along the Blue Ridge and the Chesapeake Bay. These are exactly the places that are now seeing this affluent in-migration.
Remote work is changing the shape of the economy.
Notice how the map of high-income newcomers matches up with this map of where remote workers are: They're in and near Northern Virginia, they're within commuting distance of Richmond, they're along the Chesapeake Bay, and they're in and around the Blue Ridge.
We don't know that all of these newcomers are remote workers, but it makes sense that a healthy number are. One thing we see happening nationally is that while remote workers can, in theory, live anywhere with broadband, they're not. They're clustering within driving distance of major metros (which makes sense if some of those remote workers are hybrid workers who occasionally must go into the office) and in those “rural resort” communities.
We're not seeing as much growth in remote workers in other rural communities. Some of that may change as broadband becomes more universal — although that's not happening as fast as we'd like. See the story that Cardinal's technology reporter, Tad Dickens, had recently about how two-thirds of Virginia's broadband projects are behind schedule. Some remote workers may never move — they may like where they are, or they may be in households where one person is a remote worker while the other is tethered to a specific work site.
Nonetheless, a trend is definitely underway that is starting to reshape some of Virginia's rural counties.
Do this week's special elections send any messages?
In this week's West of the Capital, our weekly political newsletter, I look at the three recent special elections for the General Assembly to see if we can divine any special messages from them. West of the Capital goes out on Friday afternoons. You can sign up for that or any of our free newsletters here: