Wisconsin’s small cities offer an escape for suddenly mobile metropolitan workers long cramped by a viral lockdown
By Ike Brannon for the Badger Institute
There is strong evidence the COVID-19 pandemic is causing people and companies to flee the nation’s metropolitan areas, including Milwaukee. The reversal of a century-long urbanization of American begs a question: Where is everybody going?
A recent Harris survey found that nearly a majority of urban dwellers in America have considered moving to a less-crowded community. And why not with a virus that has made life in close quarters unhealthy and has walled them off from the amenities that drew them to cities in the first place? Add to that threat from people who consider assault and looting in your neighborhood an honorable form of political protest.
Companies that have spent billions to headquarter in downtowns are now considering making permanent their remote work arrangements, potentially freeing millions to live and work wherever they want. The cost savings for everyone involved is staggering.
The Badger Institute wondered if smaller cities in Wisconsin might be the beneficiaries of this COVID-19 flight. We contacted Troy Streckenbach, Brown County Executive; Mason Becker, city council president of Fort Atkinson, a city of 12,000 people midway between Madison and Milwaukee; and Jeff Bruss, chairman of Three Lakes, Wisconsin, an unincorporated resort community of about 3,000 people just south of Eagle River.
None of them reported any overt evidence of an urban migration—at least not yet. Demand for homes in their already heated real estate markets, however, has markedly increased in the last few months, at the same time overall moves across the U.S. have dropped, according to a COVID-19 migration report.
This is a summary of our conversations with each of these officials.
Streckenbach, a lifelong area resident, has been the Brown county executive since 2011. Pandemic or not, he anticipates no major population change in the 2020 census.
However, Streckenbach has noticed a marked demand for homes in the urban areas of Brown County, including Green Bay. The market for homes priced between $150,000 and $250,000 is even stronger than it has been for the last two or three years. Homes in this normally less fluid, less available price range aren’t staying on the market very long, he said. While there has been no thorough analysis of the housing demand, it seems to Streckenbach it is consistent with a migration into Brown County.
Balancing a real estate surge is an estimated $14 million weekly economic hit from the NFL’s decision to have the Packers play its games without the usual sellout at Lambeau Field. Hotels and renters to fans, many of whom live outside of Brown County, will bear the brunt of this COVID-19 calculation, he said.
The 2020 census will most likely show Fort Atkinson at a population standstill. But like Brown County, Becker told us that while he hasn’t seen more people moving in, after a stall at the beginning of COVID-19 in March and April real estate demand is up. Homes in the upper price ranges are being snapped up above asking price within 24 hours of going on the market, something Becker hasn’t seen before.
Fort Atkinson has done little self-promotion since the pandemic started, but Becker suspects that remote work might free workers who could still visit their downtown offices in Madison, forty minutes away, or Milwaukee, less than an hour to downtown.
Before the pandemic, the city incorporated 75 acres of land for residential development. Becker thinks the city’s bet was a good one.
The real estate market has gone from red to white hot in the last four months, Bruss told us in September. Demand is higher than at any point since prior to the Great Recession, a direct response to the pandemic, he says.
Bruss doesn’t see it as a long-term trend, merely a short-term palliative for families. Without the need to get children home for sports and school activities canceled by COVID-19, families with second homes in Three Lakes have just extended their vacations in the area.
Demand from these vacation homeowners prompted companies to increase their internet speeds. Fuel companies sold a lot more propane through September, he said.
Even more than the other regions, Three Lakes is selling homes faster and for greater sums than the asking price than ever before, Bruss said. Realtors have started cold-calling homeowners to entice them to sell, something new for the area. And increasingly, buyers are razing homes to build bigger and better.
For all the activity, Three Lakes is probably never going to be a destination for a population in flight from a virus, Bruss said. Like all northern Wisconsin resort areas, the summer is short and the winter is cold—and long. The year-round population can’t support the kind of food, entertainment and other cultural amenities urban dwellers have come to expect. The outdoors—when you can enjoy it—might not be enough of a tradeoff, he said.
Once the COVID-19 emergency has subsided, Bruss said he expects Three Lakes to be about the same size, perhaps with an improved stock of homes.
A Post-Pandemic Strategy for Wisconsin
Until now, few families have been forced by pandemic to make life-changing decisions. The uncertainty of the next few months, the concern that it might be years, makes waiting for clarity prudent. Maybe it’s why Americans aren’t moving right now.
But it seems likely that Wisconsin will be a net winner. The short-term response in the real estate markets in each of these communities suggest it. The state has always been known for its low cost of living, stable public finances, and the kind of amenities that make it a good place to live and raise a family.
It’s still be too early, but smaller communities in Wisconsin that capitalize on those advantages might become home for some of the millions of workers suddenly with the freedom to choose not to be packed cheek-by-jowl in an expensive metropolis.
Ike Brannon is president of the consulting firm Capital Policy Analytics in Washington, D.C. This appeared in the Fall Issue of Diggings, a publication of the Badger Institute. Reposted with permission.