💡 Your guide on how to capitalize on de-urbanization

Cities and urban life are no longer the attractive first choice. But what does it mean for humans and society when de-urbanization takes root? Maria Eriksson explains how you can take advantage of the new emerging trend.

Maria Eriksson 03.Nov.2021 7 min read

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Summary

📉 What people think

Urbanization is vital. Cities are constantly expanding and the population in rural areas shrinking.

📈 Here are the facts

In many big cities in Europe and the U.S, there is a shift, which began even before the pandemic. Young people and families with small children started moving out from the city centers to suburban and more green areas.

💡 The Optimist’s edge

De-urbanization means that places that previously were not as attractive now experience a renaissance. Thanks to the technological development there are new possibilities available, such as remote work and also various forms of services which earlier only were available in the city. This opens up possibilities both for those who want to leave city life as well as for those who want to make a business of the de-urbanization shift.

💡 How to get Optimist’s edge

Maybe you would like to use the possibilities which follow with digitalization to leave city life yourself? Even when it comes to investments it is possible to make big bucks by being informed about the rising trend of de-urbanization. More people moving in means a surge in demand for housing, pre-schools, as well as leisure activities.

📉 What people think

Urbanization is the megatrend of our time. Everybody is moving to larger cities and soon enough the rest of the country will be .. Or? Globally speaking, more than half of the world's population live in cities and by 2050 two thirds are expected to do so, according to forecasts presented before the pandemic. In the most urbanized continents even more people live in cities - four of five in North- and South America and three out of four in Europe. So, yes actually there is quite a lot that points in favor of that urbanization is here to stay. However, this is not the whole picture...

📈 Here are the facts

London, Berlin, Stockholm, New York... the trend is that more and more young people, as well as families, choose to move out from the cities. And the trend is similar in several parts of the western world. In many countries it is proper to describe this as a de-urbanization trend, suggesting that people are moving from larger cities to smaller populous areas.

And yes, the pandemic has had an impact. To go through a "lockdown" trapped in a small apartment in London or Paris has made many of us long for cheaper living facilities with vicinity to green areas.

We have learned to work and in some aspects also socialize remotely, digitalization has had a real breakthrough this last year.

A study published last year estimated that 37 percent of all jobs in the U.S could in fact in total be carried out from home. In Sweden, nine out of ten remote workers would prefer to continue working remotely at least one day a week in the future and this also suggests that a larger home could become desirable.

However, if we examine the numbers more in detail it is obvious that the moving out of the cities is not a new trend, but more of a shift which has been going on for some time now.

Take Stockholm as an example. Stockholm County had a record low net domestic migration in 2020; more than 5,000 more people moved in than out. But the county has lost population to other counties in the last three years, that is, since before the pandemic. And the city of Stockholm, which experiences a relocation of people to surrounding municipalities such as Knivsta, Håbo, and Norrtälje, is losing the most. The same trend break is noticeable in the USA, for example, where more and more millennials are choosing to move from the city to the suburbs.

Cities that are shrinking

Stockholm is not the only capital or city with more people leaving than people arriving. Here are some more cities which have a larger number of inhabitants moving out than moving in. Even before the pandemic.

A large part of the moving is within the local area. A phenomenon known as 'exurbs', smaller cities a bit further out than the suburbs but yet within reach to the larger city by commuting. A somewhat larger distance to the office will be easier to handle if you only need to go to the office a few days per week. This might explain why places as Trosa or Esbo and Vanda are growing rapidly.

For some, a new lifestyle - perhaps a more eco-oriented one - is the pull factor for leaving the city. Paris je te quitte – Paris, I'm leaving you - is the name of a French initiative that offers guidance for those who want to leave the city for the countryside in France. On their website, it is possible to select criteria such as "sunny", "seaside", "mountains" etcetera. In the U.S millennials are now choosing Texas, Colorado, Washington, and Arizona over New York and Chicago. And in England, the beaches of Cornwall are attracting more people.

Remote work has made it possible for someone in Madrid to work from the Canary Islands and for someone in Stockholm to move to Åre or Järvsö. In the past year, Åre grew by 1000 new inhabitants, making it a community of 12 000 people.

During the pandemic, several Swedish regions, Jämtland, Värmland, and Gävleborgs county had a larger number of people moving in than out, for the first time during the last 20 years. At the same time, big cities like Stockholm and Gothenburg are losing residents.

Parallel with digitalization there is a rise of a new green wave which affects the interest in moving out to the countryside. Today it is also possible for people to combine a remote job in the tech sector with keeping hens and growing vegetables.

💡 Optimist’s Edge

When the benefits of leaving the city are discussed many points out an enhanced quality of life. Cheaper and larger housing, less time spent commuting, more time for family life and nature just around the corner... Where would you go live if you could work from anywhere?

Many of our basic needs can be met just as well - or even better - with a moderate distance from the city. Secureness, fresh air, and a roof over one's head check! Digitalization also means that the needs that are higher up on the list now also are made available from anywhere. Shopping, concerts, and higher education check!

However, de-urbanization can also have consequences on the economy. For instance, when it comes to the real estate market when more of us work from home there are fewer business trips, and more of the shopping is carried out online which makes the demand for offices and hotels, and shops decrease.

At the same time, real-estate prices are expected to rise in places that are becoming more attractive. Perhaps Västerås, Drammen, Tavastehus and Roskilde will be the winners post-pandemic? Did you know that the street where the prices on apartments have grown most in the whole country the last two years is in... Haparanda.

When people move to these municipalities, the demand for service also grows. A growing trend is unmanned stores, which could be a solution for rural areas, tourist areas as well as city districts that lack grocery stores.

As young families most often are the ones moving, the demand for schools and pre-schools also grows. It is possible to imagine that the demand for other services which are difficult to digitalize, such as restaurants and cafées, also would grow in these areas. If those who move from the cities are allowed to lower their living expenses it could also mean that there is more left to spend on leisure activities.

De-urbanization could also mean possibilities to establish enterprises in locations where the rents are lower. For companies who embrace remote work, there is a possibility to recruit employees regardless of where in the world they are located.

If de-urbanization continues, transport will play a huge role. Self-driving vehicles which also make it possible to do other things while being transported enables longer commuting distances for instance. Imagine that you have your sleeping car just on your doorstep. At night you go to sleep in the comfortable bed, watch a few episodes of your favorite Netflix series, and the following morning you wake up to a busy workday in Stockholm or Copenhagen.

The next step is when drone flights become available for private use. At this point, distances will shrink even more, when you could be going to bed in Funäsdalen and wake up in Paris.

Transportation of goods, such as packages, will also become more important when e-commerce grows. Especially in places where physical shops are rare. During the 2020s e-commerce grew by 40 percent in Sweden.

So, will we continue to see a growing de-urbanization? The answer to this depends on if the development outlined above becomes permanent or if it is simply a "notch in the curve". Urbanization, as we know it during the 20th century, has correlated with the fact that the cities have been the providers of jobs, service, entertainment, and even the place where people have had the potential to meet a future life partner. Digitalization means that more people can work from anywhere and that there is, for the first time in history, a labor market that is independent of geographical factors. Logically, this will mean a whole lot of more changes in the future.

For instance, there are increasing possibilities for "voting with your feet". Companies and citizens can move where rents and taxes are lower and regulations are more attractive. Or where there are more rewarding leisure activities. This can itself make the demand for more digitalized services grow.

When it comes to education and healthcare, these services are just starting to develop. Self-driving school rides or home delivery with drones are other examples of how technology can enhance the attractiveness of rural areas. Just think of how e-commerce has made it possible to order books, electronics, and clothing from around the world. Imagine that the same can be done with food. Is there no restaurant nearby that serves the Balinese dish you are craving? Fortunately, it is possible to order at home just in time for dinner with automatic delivery.

Maybe you do not even need to fly to Paris this week when you can still get a bag of perfect croissants delivered outside the door just in time for breakfast?

💡How to get the Optimist’s Edge

How can you capitalize on this?

Take the leap - move?

Take advantage of the new trends associated with homework and digitalized services to live closer to nature or in a place where your quality of life is higher.