Will the Snowbelt be the New Japan?

Future Housing

Marble Falls      Americans continue to move to the Sunbelt states and cities in droves.  If anything, this trend went into hyperdrive during the pandemic when people could work remotely and increased mobility coupled with the demand for larger housing to accommodate work and more room to roam on your property.  Some cities have exploded past normal expectations, like Austin, Charlotte, and Fort Worth.  Arizona, Texas, Florida, and North Carolina have seen their populations blow up, while some states in the north, and let’s be honest, and call it the Snowbelt, have lost population or are barely holding on.

What’s happening here?  The answer isn’t simple, because a lot of factors are at play.  For example, as popular as warmer weather and more space is, jobs are still the lifeblood for population growth.  Alabama, Arkansas, Mississippi, Louisiana, and other deep South states certainly have sun, but our population numbers are certainly not off the charts.  People are still leaving rural areas and going to cities, just warmer cities with more jobs and running from bigger cities with exorbitant housing prices.

The impact on Sunbelt housing is profound, though.  A piece in the Wall Street Journal looked at the higher inflation numbers in Sunbelt cities like Phoenix, along with others.  When housing inflation, largely driven by migration of new residents, was stripped out, other inflation indices were no different from Minneapolis, for example.

This creates its own set of problems for existing residents, of course, but another item caught my eye as well about Japan.  The story in the Times focused on the aging population there, especially in rural areas, where they found that,

the Japanese 2018 Housing and Land survey, reported about 8.5 million akiya or abandoned homes — roughly 14 percent of the overall housing stock. The Nomura Research Institute puts the number at more than 11 million, and predicts that akiya could exceed 30 percent of all houses in Japan by 2033.

That’s serious, but before we point too many fingers, I got to thinking more about the same problem in the United States as people leave the Snowbelt.  Sure enough, the states with the most abandoned houses are Vermont, Maine, and Alaska, all of them ice-cold, and of course, pretty rural.  Surveys indicate that the US has about 16 million abandoned houses, twice as many as Japan, whose population is 38% of the USA, which by the numbers would say that it is not as extreme a situation as Japan, but it’s not in another league, but in the same neighborhood.

Do we really want all of these folks to move to the South?  Of course not, and it’s not because we’re unfriendly, but because we can’t match houses that need people easily with people who need houses, making this a national problem being masked as a regional success story.  Without a truly national housing and jobs program, though, the Snowbelt and rural areas generally will find ourselves toe to toe with Japan and likely other countries as well in wrestling with this problem without a clue to a solution.