Cities Offer Cash to Lure Relocation Buyers

May 1, 2018

In places facing a shortage of workers, some civic leaders are taking the unusual step of offering to pay people to move to the city.

City officials in Hamilton, Ohio, have launched “Relocate to Hamilton,” touting $5,000 to help pay student loans. In Grant County, Ind., civic leaders are offering $5,000 toward buying a home. The North Platte, Neb., Chamber of Commerce is offering up to $10,000 to move to the town for a job. In 2016, the state of Maine launched an ad campaign called Visit For a Week, Stay for a Lifetime to try to get more people to call Maine home. Those who visited Maine on vacation and then moved there could be eligible to get their vacation expenses recouped. 

The incentive idea is spreading, The Wall Street Journal reports. Some small cities are faced with an aging population and an exodus of younger workers that have created severe labor shortages. Instead of offering incentives to employers to relocate there, they’re offering incentives to workers to fill already open jobs. 

“The mere fact that they’re doing what they’re doing highlights the headwinds they are facing,” Enrico Moretti, an economist at the University of California, Berkeley, told The Wall Street Journal. “There is no one in San Francisco trying to pay people to move here.” 

The Great Recession from 2007 to 2009 prompted many young people to move to the bigger cities in search for jobs. The number of people ages 25 to 54 increased nearly 6 percent in larger metro areas since 2008. But in towns and rural areas, the number of people at those prime working ages has dropped. Smaller communities face a significantly shrunken labor force, which will likely get worse, The Wall Street Journal reports. 

“Low unemployment rates, everyone thinks of that as a good thing and it is, but there’s a downside,” Mike Allgrunn, an economist at the University of South Dakota, told The Wall Street Journal. “Eventually you run out of people to do the work.” 

In places like Hamilton, Ohio, about 5,800 jobs remain unfilled in the city of 62,000. City leaders hope they can lure young adults to start their careers in the city by offering $5,000 scholarships to go toward the student loans of people in engineering, technology, science, or the arts. They must agree to live in downtown Hamilton for two years. 

Hamilton’s program was modeled after one in St. Clair County, Mich., which began offering student loan scholarships in 2016. The program is targeted at attracting local young people who have moved away to return. 

The Grant County, Ind., economic development office is offering $5,000 toward a purchase of a home for those relocating there. Applicants must have a job and advanced training or a college degree. Applicants will have to repay the money if they move away from the town within five years. So far, about 100 newcomers have purchased houses through the program, Tim Eckerle, executive director of the Grant County Economic Growth Council, told The Wall Street Journal. The chamber of commerce is creating a scholarship program for $9,000 to help repay student loans. Combined with the housing grants, newcomers could potentially receive $14,000 to settle in Grant County.

Source: “How Bad Is the Labor Shortage? Cities Will Pay You to Move There,” The Wall Street Journal (April 30, 2018) [Login required.]