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Cheaper Cities Stand to Gain in Work-From-Home Shuffle

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These translations are done via Google Translate

By Alex Tanzi and Wei Lu

(Bloomberg) The Covid-19 pandemic hit right as Ralph McLaughlin, chief economist for Haus Inc., was moving from Washington, D.C., to San Francisco. When his company gave employees the option to work anywhere, McLaughlin didn’t hesitate.He chose to work mostly from a mountain home 145 miles from San Francisco and visit his city office “when I need to feed off the energy of co-workers,” he said. “It feels like the future of work that I’ve always dreamed of has arrived.”

Companies ranging from the largest financial firms like American Express to tech giants such as Google are relaxing their work-from-home policies. And some are taking it a step further. Facebook said this month that many of its employees can permanently work from places cheaper than its Bay Area headquarters. Twitter also extended its work-from-home privilege in perpetuity.

“In thinking about the long-term effects of the Covid-19 pandemic, remote work stands out as perhaps the biggest change agent,” said Skylar Olsen, senior principal economist at Zillow. “We may see a growing premium on homes with room for an office or other place to comfortably work.”

If so, that will likely mean more people relocating to areas where larger homes are more affordable.

To show which regions stand to benefit or lose, Bloomberg News constructed a map showing how regional prices for the U.S. metro areas changed over a decade. Areas in blue are becoming less expensive than the national average while regions in red are growing even costlier.


The map is based on data from the Bureau of Economic Analysis, which recently released regional price parity estimates. It sets the national average cost of goods and services at 100 and then shows how the cost of living in states and metropolitan areas compare with that average.


For example, the San Francisco-Oakland-Berkeley area had a price parity of 131.6 in 2018, the latest year available, which means that the region is about 31.6% more expensive than the national average.


Since 2010, populations in cities in the southern and western regions of the United States experienced rapid growth. The South leads the way with 10 of the top 15 fastest-growing large U.S. cities with 50,000 or more residents, according to new population estimates for cities and towns from the Census Bureau. Collectively, Houston, San Antonio, Austin, Fort Worth and Dallas increased by almost 933,600 people.

Meanwhile, goods and services in large metropolitan areas such as Cincinnati, Cleveland, and St. Louis, cost roughly 10% less than the country as a whole.

Among the nearly 281 million metropolitan population, 59% are in areas where real cost of living declined between 2008-2018 and 40% in areas that had a price increase. The top 15 most expensive areas are all along the U.S. coasts.


The Atlantic City, New Jersey, metro saw the largest relative drop. In Flint, Michigan, not only did the regional price parity fall 5.3% over the decade, but the area remains more than 10% cheaper than the national average.

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