States like Texas and Florida are seeing an influx of migration from major cities and coastal states. Smith County has benefited from an influx of New Yorkers and Californians, but some challenges have arisen as a result of these shifts. Krist Swimberghe, DBA, and dean of UT Tyler Soules College of Business, talks about a new Hibbs Institute for Business and Economic Development report which examines the migration.
Mike Landess: For UT Tyler Radio, I’m Mike Landess. You’ve heard and read about the migration from major U.S. cities that ramped up in the last few years. What you may not realize is that Smith County has received the benefits and the drawbacks of an influx of New Yorkers and Californians. UT Tyler Hibbs Institute for Business and Economic Development has a new report out that looks into the specific effects of that migration.
And here to discuss that is the dean of Soules College of Business, Krist Swimberghe. Welcome.
Krist Swimberghe: Thank you for having me, Mike.
Mike Landess: Now the report shows that states like Texas, Florida, North Carolina are seeing an influx of new residents from major metropolitan areas on both coasts. This has been going on for years, but it ramped up in the past few. Cost of living, availability of jobs and quality of life seem to be the driving factors. Is that correct?
Krist Swimberghe: That is absolutely correct. Among others, but cost of living, especially when you compare Southeast and Southwestern states versus the coastal states are tremendous. The differences in cost of living as well as economic opportunities as businesses have moved from the coastal areas to the southwest and southeastern states.
Mike Landess: For some of the same reasons.
Krist Swimberghe: Absolutely for some of the same reasons and perhaps also for reasons not explored in this particular brief. Perhaps a more economic-friendly legislature that has encouraged businesses moving to these states.
Mike Landess: And tax incentives, etcetera.
Krist Swimberghe: Exactly.
Mike Landess: Now Texas alone had a net migration of more than 475,000 new residents between 2020 and 2022, and there’s a significant economic impact as well.
Krist Swimberghe: Absolutely. When people move from one place to another, they move their consumption with it. And so, needless to say that if a household moves from one area to another, they go spend their money locally. And it has obviously an economic impact. To the degree in the state of Texas, I believe the number as indicated in the research that the Hibbs Institute performed in the state of of Texas, that was almost a little over $14 billion of consumer spending economic impact. For Smith County, it was well over $140 million. So a substantial economic impact. And of course, we’re talking about the periods 2020 through 2022, post-pandemic.
Mike Landess: Let’s flip that coin and talk about the other side of that, and that is that as folks move into an area, they are spending more money. But they also are demanding more goods and services. They need a lot more things. And the other part of it is that it’s very likely that because they have the money to spend, that drives up prices for things like housing.
Krist Swimberghe: And we have experienced that, obviously. While through the period of 2008 up to the pandemic, East Texas especially really was not susceptible to a tremendous increase in housing. What we’ve even seen in Smith County since the pandemic and since the influx of people from California and New York and other states, we’ve seen our housing prices go up because the demand simply outpaces the supply. And supply didn’t quite catch up at the pace that the demand required it to pick up.
Mike Landess: Look here in Tyler, where we have a new medical school that’s coming in, and we’re bringing in people from out of state to come and help be a part of the faculty and to help make this go. And of course, the students themselves. That certainly has got to have an effect on that. And you have to wonder, too, as you see that kind of impact in an area, some of that is being driven by the remote people being able to work remotely. Tell us about that a little bit.
Krist Swimberghe: Yeah, indeed. Obviously the pandemic forced us all to work remotely, and there is a certain measure of jobs which have not returned back to the office. While perhaps it may be less than initially anticipated, there is still a good share, especially in the tech industry, a good share of jobs where companies allow employees to work remotely. And obviously when you’re allowed to work remotely, you’re going to look for the areas that provide you better quality of life, which also affects obviously the influx of people in a particular area and therefore the associated pressure on the housing market.
Mike Landess: One of the things that I think is interesting from a national perspective is that as people are moving away from these major metropolitan areas and looking for a better lifestyle, some in the past used to move to the suburbs. And they created what they called the “donut effect,” where they were not contributing to the welfare and the growth of a major city. But they were living off of the good parts of it, which is the cultural aspect and the variety of things there are to do there, but they’re putting their money into that suburban economy instead. Now it’s changed where they’re giving up on the suburban economy, and they’re just coming to Texas and Florida. Florida’s the big one, right?
Krist Swimberghe: Florida, obviously realized an influx of over 600,000 people. However, I would have to say that perhaps while you saw in the past that the downtown areas were being ignored and there was a flight to the suburban areas, I think both right now experience a a boom, both the downtown areas as well as the suburban areas. I think what’s actually happening, and again, what’s perhaps not touched on in this report is that as we experienced the influx of people from out of state in our states, both Florida and Texas, that people who were living there and perhaps were closer to retirement age, then sought to come to areas and leaving not only to go to suburban areas, but come to counties like Smith County, a little more rural, presenting a little slower pace of life. And so we’ve seen that over the last decade, or perhaps beyond, where people from the metroplex areas, DFW areas, San Antonio, Austin, who were close to retirement age and perhaps retired. Retired not where they were but moved out of the metropolitan areas. Moved to Smith County and the counties surrounding the metropolitan areas and thus not only just leaving desolation behind itself, but also contributed to suburban wealth, if you will.
Mike Landess: Yeah, exactly. So let’s just imagine for a moment that we’re a a drone, and we’re right on top of this question, and now we’re pulling way up in the sky to take a big look at it. The post-pandemic world that we live in now, it’s changed so much. Will those changes stick or will we work our way back to where we were at some point?
Krist Swimberghe: I think some of it will stick. I think some of it will stick, and that’s obviously a question that still completely has to work itself out. But what we have seen reports that where perhaps it was contemplated that the majority of work would go remote. We have seen that actually, surprisingly, while some remote work still persists and will continue to persist, that surprisingly people have understood that coming to work is not just a professional endeavor. But it’s also a social interaction, and it’s contemplating the mental stress that the COVID pandemic put on us. So I think many of us, while initially widely enthusiastic about remote working and being comfortable in our homes and just dressing up from the top on up, I think many of us have also realized the tremendous social component and interaction. That it’s necessary to go back to the office for our mental health. While nothing replaces the face-to-face interaction, the relationships you can build that way, technology has come a long way.
Mike Landess: That’s a little discouraging to think about living the rest of your life in yoga pants or pajama bottoms.
Our guest has been the dean of the Soules College of Business, Krist Swimberghe. For more information about the latest Hibbs Institute report, or to find this interview to hear again or to share, go to KVUT.org. I’m Mike Landess for UT Tyler Radio.
(Transcripts are automatically generated and may contain phonetic spellings and other spelling and punctuation errors. Grammar errors contained in the original recording are not typically corrected.)