Small cities and rural areas have discovered they can trade dollars for citizens to revitalize their economies.
Dozens of American towns facing population losses are now offering as much as $15,000 to those who move there and stay for at least one year. Most offer about $10,000.
In a world where many people work remotely, this inducement—plus lower taxes, wider spaces, and other local amenities—gives small towns a large advantage in attracting people, said Bob Ross, the spokesman for the Choose Topeka Initiative in Topeka, Kansas.
“The economic impact far exceeds the $10,000,” said Ross. “If you really think about it, $10,000 isn’t a huge amount when you consider the fact that you’re coming here to purchase a home.”
The Topeka initiative pays people up to $15,000 to move to the city—nearly a fourth of the area’s average salary. The city chose this number because it was the estimated cost of moving from the coast to Topeka, Ross said.
Half the money comes from local employer-signing bonuses, and the city provides the rest, he said.
Despite the outlay, the city makes its investment back and more after just one year, he added.
“There is a dollar impact,” he said. “They’re bringing partners with them which often have jobs as well. They’re buying homes and they’re shopping at businesses.”
When a person moves to an area, they bring much more than their tax dollars, Ross said. They add their own personal contributions to the community.
“What I’ve enjoyed about the 54 people that have moved here is almost to a person, they’re very adventurous,” he said. “They’re very eager to become a part of a place. They’re choosing a smaller city because they want to make an impact there.”
Since its start in 2019, Topeka’s paid-move program has brought in an estimated 200 people, he said.
For decades, towns have attempted to attract businesses to get people, said Ross. Now, paying people directly cuts out the middleman.
“Do you really need an Amazon headquarters? Or do you just need 50 to 100 of those Amazon workers able to enter the community?” he asked. “That’s the real value that comes out of those businesses coming into your community.”
As with many rural places in America, Topeka’s population has been declining. In the past decade, it dropped by 1 percent.
Experts argue over which factors bear the most responsibility for this demographic change, although the results are indisputable. Towns disappear, local tax bases are strained, and communities die. A shrinking town is a dying town.
Although Ross said the program was started as a talent-attraction move, statistics suggest that it may balance out the town’s population decline. If it continues to succeed at the same rate, the city will nearly match its population departure rate.
“We’ve been working so aggressively over the last decade to revitalize our city and to really transform it,” he said.
After the 2008 housing crisis, Newton struggled to add housing, said Bruce Showalter, the town’s housing director.
“In 2011, we had zero starts and zero housing permits taken out,” he said.
The town then hired a consulting company, which announced, following a study, that Newton was dying. In response, civic leaders came up with a revitalization plan, under which Newton would pay $10,000 to anyone who bought a newly constructed home in the area. With this initiative, the city could fix both its housing and population issues.
“The two reasons were to build and maintain our population and to increase our tax base,” said Showalter.
Since the beginning of the program in 2014, the city has assisted in the building of 100 new houses.
Paying the incentive for these houses cost Newton $1 million. To raise the funds, the city sold bonds, Showalter said.
Tax growth from the increased population is enough to pay for the bonds, he said.
“It’s paying itself back pretty much and with the population growth, the city council is very happy.”
Chris Giesen, the economic development authority coordinator for a similar program in Harmony, Minnesota, said he also was confident his program could quickly pay for itself.
“If you have a $255,000 house, the city will collect about $12,000 in five years,” he said. “So it’s a way of foregoing those dollars for a little bit of time.”
In some ways, the COVID-19 pandemic has gifted paid-move programs with a golden opportunity, Showalter says.
“You can live anywhere and still do your job remotely,” he said.
Statistics support his observation, as many urban dwellers have relocated to rural areas during COVID-19.
Maine has seen a surge of applicants to its student-loan-repayment program during the pandemic, said Katie Shorey, the engagement director of the nonprofit Live and Work in Maine. Students who move to, or stay in, Maine get some student-loan payments reimbursed by the state using tax credits. In 2019, Maine reimbursed $30 million in student loans.
Many urbanites are moving to rural Maine because they want to be outdoors.
“If you were in a city during COVID, you were like, ‘Oh my God, I am confined in these walls and in these streets,’” she said. “I was able to get outside and snowshoe and walk in the woods.”
From its start in 2008, the Opportunity Maine Tax Credit program has grown exponentially. In 2019, 14,751 people took advantage of the program, according to Maine Revenue Services.
But Shorey’s main emphasis about Maine is the benefits of rural life. Free college payment may attract people, but hiking, enjoying the fall colors, and friendly neighbors keep them.
In return for these economic and personal benefits, Maine receives a stream of talented young people.
“Historically, we’ve had a big brain-drain problem, and a lot of young people leave the state,” Shorey said. “So if this program can either entice them to stay after going to school or help attract younger people here, that is a huge value add for us.”
Physician assistant Sam Stanfield, a Live and Work in Maine participant, said that she and her husband moved to the state for school, but chose to stay because of the student loan payment offer. Because Stanfield works at a rural hospital, her monthly loan payments are now only $500 a month. In other places, she would have to pay more than $2,500 a month, she said.
“We thought we would move to Maine for me to attend school and then relocate to be closer to our families,” she said. “But this was definitely a great reason for us to stay in Maine.”
Stanfield said she loved both Maine’s community and its natural beauty. She also said she appreciates the simplicity of loan reimbursements.
“Maine has made it super easy,” she said. “You can literally go onto the website, fill out the form, and show proof of graduation, and you qualify.”
Paid to Buy Cheap?
One of the strangest parts of paid-move programs is that the towns paying often already have a lower cost of living than the places that they seek to draw people from.
Paid-move towns Topeka, Kansas; Newton, Iowa; and Muscle Shoals, Alabama, all have a cost of living that’s about 20 percent lower than the U.S. average. For example, the average price of a house in Newton is $195,000, compared to the average cost of a house in the United States of $374,900.
But inexpensive small towns still pay prospective movers.
In many places that pay to shift, the numbers of people heading to rural America remain fairly small.
Mackenzie Cottles, a spokeswoman for the Shoals Economic Development Authority, said that in the past two years, 71 people have moved to the Florence–Muscle Shoals metropolitan statistical area. The area has a population of about 150,000 people.
Although America’s rural places may struggle to attract new people, it seems they don’t struggle to keep them.
Representatives from Topeka, Newton, the Shoals, Harmony, and Maine all say that almost no one leaves after spending a year in small-town America.
“We have a good amount of confidence in our community. If someone does live here for a year, they will never want to leave,” Cottles said.
Correction: A previous version of this article described incorrectly Topeka’s population drop and Samantha Stanfield’s position. It also gave an incorrect name for the Live and Work in Maine program and described incorrectly the manner in which 14,751 people used the program. The Epoch Times regrets the errors.