Remote work has created a new gold rush for many communities around the world. Destinations with great quality of life, but often minimal jobs, have seen their populations soar with remote workers. It should be a perfect marriage. But with uncontrolled growth, the local economy and real estate market can be turned upside down.
Chang Mai Thailand has been a popular remote work location for over a decade. Real estate prices rose about 40% during that time. Now it’s starting to decline. The steady growth from the past decade will likely keep it as a vibrant community even with a temporary decline in prices. Still, Chang Mai suffers from cultural tension between residents and non-resident foreigners.
When I first visited the Playa del Carmen area of Mexico 30+ years ago, it was a sleepy little beach area. You could still get a beachfront property for under $50,000. Now you can usually add an extra zero to the price. During Covid, prices rose dramatically as more remote workers came into the area. The area always catered to tourists so the dynamics haven’t changed much, just the prices.
Florida on the other hand has been the destination of choice for retirees for many years. Recently it was displaced by Lancaster, PA area as the top place for retirees. This is largely because of an influx of remote workers, who drove up the real estate prices, forcing new retirees to look elsewhere. This same increase in prices made it difficult for people servicing the local economy to afford to live there. So you end up with this cycle of imbalance that drives up prices. It also drives away the people that make the local economy work. Add in a hurricane, for a large number of people who haven’t dealt with one before, and I think you will see some more economic upheaval in many Florida communities in the months ahead.
It’s happened before and it will happen again.
A Gold Rush History Lesson
In the mid-1800s, the discovery of gold in various parts of the United States led to the development of numerous “gold rush towns.” These communities often sprung up practically overnight. Prospectors from all over the country flocked to areas with reports of gold deposits. Remote work opportunities have had similar effects in many real estate markets.
One of the most famous examples of a gold rush town is San Francisco. The discovery of gold in the area in 1848 led to the city’s rapid growth, as thousands of people moved to the city in the hopes of striking it rich. By 1852, San Francisco’s population had ballooned from just 1,000 residents to over 25,000. San Francisco was lucky because it was able to diversify and grow in different directions. But that’s not always the case.
Other well-known gold rush towns include Deadwood, South Dakota, and Tombstone, Arizona. Both towns experienced a period of rapid growth as prospectors streamed in to find their fortune. Deadwood was once described as “the wildest and most lawless town in America,” and Tombstone was known for its gambling, prostitution, and infamous gunfights.
But as quickly as these towns rose to prominence, they often declined just as rapidly. The gold supply in these areas dwindled, and when the prospectors left, the towns struggled to survive. Some towns, like San Francisco, were able to transition into new industries and continue to grow. But others, like Deadwood and Tombstone, slowly faded into obscurity. Today, many of these once thriving gold rush towns are ghost towns, visited primarily by tourists interested in the area’s history.
Destinations popular with remote workers are not likely to have the colorful history of some of the gold rush towns, but they can have similar paths as tastes change, and the next hot destination emerges. Communities need to understand and work with remote workers to ensure a long-term strategy to reduce volatility in their real estate market and economy in general.
A Velvet Rope
Most of us have ended up on one side or another of a velvet rope. It’s usually a sign of exclusivity and customer loyalty for restaurants and event venues. Some get in easily, and others have to wait. It’s a combination of marketing to create demand, and controlled access at the same time. Many of the things that attract remote workers to some areas, get destroyed when too many people show up all at once. Since it’s not a problem most communities are used to dealing with, it tends to go unchecked until it is too late. A velvet rope might have helped.
Usually, there is an informal network of patrons that know the secrets of the velvet rope. In the remote work world, various channels get the word out. Here are just a few:
- https://www.remoteworkcommunity.com/
- https://www.outsite.co/
- https://www.remotelyone.com/
- https://www.noma-collective.com/
Unfortunately, on the community side, usually, no one is watching the velvet rope – if it exists at all. Communities need to think about attracting remote workers, but they also need to think about controlling growth. It can be an ideal marriage, but it does require some planning.
As some destinations such as Southern Florida or the Algarve in Portugal get saturated, remote workers are looking for what else is out there. It doesn’t have to be a beautiful beach town. Maybe it’s a farming community in the Midwest, a ski destination in Colorado with mountain vistas, or a community with lots of artists and performers in the Berkshires. Communities just need to tell the world why remote workers should come. They just need to have velvet rope ready if they get too popular.
Leveling the Playing Field
As people in general move beyond their past commute threshold, this can create opportunities for communities that may have suffered from population loss due to a lack of jobs. Most of us have seen the Italian homes for $1 stories that are out there. Most may take a few years to rebuild the infrastructure (shops, businesses, restaurants, etc.) that more established communities have. It’s not for everyone, but it is a good example of communities marketing themselves to attract residents.
There are lots of communities that have more developed infrastructures which just lost their main employers at some point in the recent past. This can be an ideal marriage for some remote workers and these smaller communities. They are still in the mode of thinking they need to attract businesses when in reality they just need to attract residents who can work remotely.
By taking the lead in opening the doors to remote workers, community leaders can help steer some of the remote work gold rush in their direction. Spreading wealth can help level the playing field for communities. Having a plan for attracting remote workers and remote services can improve a community’s sustainability, and preserve the character of the town at the same time. The goal is to create a vibrant community, not displace the residents that already live there. Small towns and remote workers are a great combination when they work together. In many ways, it brings things back to community models before the industrial revolution – just with high-speed internet. It’s an exciting time to work from anywhere, and there are lots of choices to pick from. Look for some of those hidden golden nuggets. They may be looking for you as well.
