Welcome to the weekly edition of The Ag Globe Trotter by Dr. Dave Kohl.
For those of us who grew up in rural areas, the phrase, “Hey neighbor! How are you doing?” often evokes the welcome sight of a familiar face. The de-urbanization trend has been accelerated by the COVID-19 pandemic and is resulting in many rural Americans getting new neighbors in what has become a rural renaissance.
The interest in rural properties has manifested itself in a matter of 18 months. After decades of urbanization, more people living in larger cities are moving to rural areas as a result of the pandemic. It has resulted in an abrupt 180° change. Articles in the Wall Street Journal, reports on CNBC, and Bloomberg News are each reporting on the de-urbanization trend. Let’s discuss some of the variables behind this trend and the recent movement of people to smaller cities, towns, and rural areas.
Some individuals and companies are working remotely or in a hybrid approach, with a combination of time in the office and virtual work. Others are finding that leaving urban areas lowers their cost of living by reducing housing costs and other aspects of everyday life. Of course, some urban dwellers are making the move due to quality of life issues such as health, safety and the ability to balance work and life demands.
Over 1,000 agricultural lenders have been asked about the increased demand for rural properties using webinar polls over the last several months. An astounding 88% of the lenders indicated an increase in interest and demand for rural properties. The same perspective can be observed when talking with agriculture and rural realtors. Some people want land for recreational purposes, while some desire a rural residence. Others desire 5 to 20 acres in rural areas to operate lifestyle farms.
In a recent face-to-face senior management class at Virginia Tech, this de-urbanization trend was discussed with the students, many of which desire to return home to either a farm or agribusiness. Some of the students were threatened by this trend because of the increased competition for land and real estate. Others indicated that the new neighbors could be difficult to coexist with because they often do not understand agriculture and rural cultures.
However, some students countered that the new neighbors could provide opportunities for niche markets such as livestock, hay, custom work or side “gig” businesses. Other students indicated that the new neighbors could be powerful political allies in local, state and national government agendas and initiatives.
The decade of the 2020s could result in a rural renaissance. However, broadband internet technology, accessibility and other lifestyle amenities will be necessary to act as a human capital magnet. The new neighbor of the 2020s in rural America could change the paradigms of business and everyday interaction and require critical thinking and input into strategic plans in agriculture at all levels of the industry.
Dr. Kohl is Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agricultural and Applied Economics at Virginia Polytechnic Institute and State University. Dr. Kohl has traveled over 8
million miles throughout his professional career and has conducted more than 6,000 workshops and seminars for agricultural groups such as bankers, Farm Credit, FSA and regulators, as well as producer and agribusiness groups. He has published four
books and over 1,300 articles on financial and business-related topics in journals, extension and other popular publications.
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The Ag Globe Trotter