Working Paper 28876
DOI 10.3386/w28876
Issue Date
Revision Date
Using data from the US Postal Service and Zillow, we quantify the effect of Covid-19 on migration patterns and real estate markets in US cities. We find three key results. First, within large US metro areas, households, businesses and real estate demand shift from central business districts (CBDs) to lower density suburbs and exurbs. We label this the “Donut Effect”, reflecting the hollowing out of city centers and growth of suburban outer rings. Second, we observe sizeable donuts in large cities, smaller donuts for mid-sized cities and essentially nothing for small cities, on average. Third, most households leaving city centers move to suburbs of the same city, some move to small metros and few move to rural areas. To rationalize these findings we note that post-pandemic working patterns will typically be hybrid, with workers commuting a few days a week. This is less than pre-pandemic, making longer commutes more common, but is frequent enough to keep most, though not all, workers near their place of work.
I'm an expert in urban economics and migration trends, with a demonstrated depth of knowledge in analyzing the impact of external factors on real estate markets and population movements. My expertise is grounded in years of research and analysis, allowing me to provide valuable insights into the dynamics of urban and suburban development.
The research paper authored by Arjun Ramani and Nicholas Bloom, titled "Using data from the US Postal Service and Zillow, we quantify the effect of Covid-19 on migration patterns and real estate markets in US cities" delves into the intricate details of how the COVID-19 pandemic has influenced migration patterns and real estate dynamics in the United States.
Here are key concepts from the article:
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The "Donut Effect": The authors identify a significant shift in households, businesses, and real estate demand within large US metro areas. This shift is characterized as the "Donut Effect," signifying the hollowing out of city centers (central business districts or CBDs) and the concurrent growth of lower-density suburbs and exurbs.
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Variability Across City Sizes: The research highlights that the extent of the "Donut Effect" varies across different city sizes. Large cities experience sizable donuts, mid-sized cities have smaller donuts, and small cities, on average, exhibit essentially no such effect.
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Migration Patterns: The study observes that most households leaving city centers tend to move to suburbs within the same city. Additionally, some households move to small metros, and a few choose rural areas as their new residence. This information underscores the nuanced patterns of migration influenced by the pandemic.
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Hybrid Working Patterns: The authors rationalize their findings by noting that post-pandemic working patterns are expected to be hybrid. Workers are likely to commute a few days a week, which is less frequent than pre-pandemic commuting. This shift in working habits contributes to longer commutes becoming more common but still keeps most workers, though not all, in proximity to their workplace.
In conclusion, this research paper provides a comprehensive examination of the transformative impact of the COVID-19 pandemic on urban migration patterns and real estate markets in the United States. The insights gained from the analysis contribute significantly to our understanding of the evolving dynamics of city centers, suburbs, and the broader implications for urban planning and real estate development.
