You Decide: Have Cities Reached Their Peak?

By Mike Walden

I grew up in a rural region outside of Cincinnati, Ohio, in the 1950s and early ‘60s. Our home was around the corner from my paternal grandfather’s farm. I enjoyed the open spaces and clean air. Traffic was minimal, so I could ride my bike everywhere. However, there were some changes. Whereas my father walked to school, I took a bus.

It was a major occasion for my parents to take me to downtown Cincinnati for shopping, a movie or a Cincinnati Reds game at old Crosley Field. It was probably then that I first became interested in cities. Downtown Cincinnati offered excitement, easy access to stores, restaurants and entertainment, and the wonder of seeing massive skyscrapers like the 49-story Carew Tower, still standing today as the second-tallest building in the city.

It was natural that I carried this urban fascination to college. My initial intent was to become an architect and design big city buildings. A lack of design creativity pushed me to city planning, where I thought I could help manage cities. Then I discovered economics and its power for understanding behavior. My Ph.D. dissertation focused on why some neighborhoods in Cincinnati that had fallen into decline were being revived by new investments and new residents.

When I came to North Carolina in the 1970s, the majority of people lived in rural regions. It wasn’t until 1990 that North Carolina officially became an urban state, with most people living in cities and their adjacent suburbs. Today, two-thirds live in urban areas.

Indeed, during most of the last three decades, urban areas, led by cities like Raleigh, Durham, Charlotte, Winston-Salem and Greensboro, have continued to increase their dominance. Over 80% of the state’s economic activity is now based in urban counties. Growing economic sectors like technology, pharmaceuticals, finance and others have favored urban locations with their access to colleges and universities, a young workforce, and amenities like shopping, entertainment and transportation, particularly airline flights.

But there may be some cracks appearing in the dominance of cities, particularly big cities. Recently released U.S. Census data show that since 2020, more people in the nation have been moving out of urban regions than moving into those regions. The opposite has occurred for rural regions, where more people have moved to those areas than have left. I looked at these data specifically for North Carolina and found the same results. Foreign immigration does not factor into these numbers.

Of course, the trend of urban areas losing people and rural areas gaining people may not continue. Some of the trend may be a reaction to the pandemic, when people sought comfort in rural regions where population densities are much lower, possibly providing partial protection from illnesses spread from person to person, like COVID.

Still, there may be several factors that will sustain a rural rebound. One is the increase in remote work. Remote work increased 650% during the pandemic as offices, schools and other businesses were closed to stop the spread of the virus. But even after the pandemic, remote work is over 300% higher than prior to COVID. A significant number of workers like the freedom provided by remote work, as well as the reduction in commuting. Many businesses have also found remote work increases worker productivity and satisfaction, as well as saving the company money on office rents and maintenance.

A second factor is the expansion of high speed internet service. In part thanks to federal and state financial assistance, including in North Carolina, over 90% of individuals today say they have access to broadband.

A third factor is the growth in cyber buying combined with home delivery. For a large number of items, we don’t need to drive to stores for purchases. Orders can be placed for almost any product, and that product can be delivered to our doorstep. While the process may not be as available or easy in rural areas, the anticipated arrival of drone delivery in the future may make cyber ordering and home delivery convenient everywhere.

The conclusion is that cities may be losing some of their attractiveness in the post-COVID period. Work, shopping and information access via the internet are increasingly becoming available in small towns and rural regions. Even college classes can increasingly be accessed remotely.

If the recent data on population movement continues, we may be approaching a shift in North Carolina’s economic geography. Growth in metropolitan populations may slow and possibly decline. At the same time, growth in small town and rural area populations could jump. Since the majority of remote jobs are hybrid — for example, working three days at home and two days at the worksite — rural areas within a one-way commuting time of an hour to big cities (beyond which most drivers find the commute excessive) would see the biggest influx of workers.

Such a geographic shift could be a win-win for many. Households located in small towns and rural areas would benefit from significantly lower housing prices, less congestion and more space. But with slower — or negative — growth in cities, residents there would see some easing in congestion and some reductions in the upward pressure on the costs of shelter.

Traveling all across North Carolina for almost half a century rekindled my interest in rural areas as well as in cities. The widening urban-rural divide has been an issue in the state for decades. Is the gap between city life and country life about to narrow? You decide.

Mike Walden is a Reynolds Distinguished Professor Emeritus at North Carolina State University.