Fewer newcomers move to city

A common misconception is that people abandoned urban neighborhoods in droves last year to avoid catching the novel coronavirus, which spread more easily in denser areas. The reality rather was in the other direction — most large and more expensive cities like Denver experienced a significant drop in young renters moving in.

Out of 96 metro areas studied, only three showed a very large increase in out-migration from their urban areas last year — New York City, San Francisco and Bridgeport, Conn., said Stephan Whitaker, a policy economist at the Federal Reserve Bank of Cleveland.

“Out-migration from urban neighborhoods is up somewhat, but in-migration is down substantially,” Whitaker said during a press call to discuss his research last week. “The pandemic has slowed down their pipeline of inflow.”

Denver was among the more expensive large metro areas that saw a big decrease in urban in-migration and a small increase in urban out-migration. The decrease in those moving in was 2.4 times as large as the increase in those moving out between April and September.

And it was mostly driven by young renters, not homeowners, who didn’t shift their migration patterns much, aside from favoring the suburbs, even more, when it came to buying. That shift among renters is problematic for urban neighborhoods that have high turnover and count on a steady flow of newcomers to fill vacant apartments.

To find out where people moved, Whitaker used the Federal Reserve Bank of New York/Equifax Consumer Credit Panel, which tracks address changes captured on credit reports. Those changes, reported quarterly, are more current than the annual updates coming from other sources like tax returns filed with the IRS.

Three things seemed to correlate most with urban flight, Whitaker found. First and foremost was the concentration of jobs that could be done by telecommuting. That was followed by the severity of COVID-19 in an area and the rate of small business closures in a community.

Put another way, if an urban area was hard hit with COVID-19 cases, lost the amenities that made the area attractive in the first place and if the jobs offered there could be done remotely, then it was more likely to lose population.

In another study, Whitaker looked more broadly at relocations made in the last three quarters of 2020 and compared them to the average of the last three quarters in 2017, 2018 and 2019. He