How pandemic-era migration changed Richmond's economy
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After millions of Americans rethought their living situations during the pandemic, their moves changed the geography of where money is made in the U.S., Axios' Neil Irwin reports.
Why it matters: In some areas (like D.C.), income taxes are a major source of municipal revenue.
- But even places that don't have a local income tax depend on residents' incomes to support the local housing market, retail sales and the tax base.
Driving the news: An analysis of tax data by the Economic Innovation Group shows the impact of those moves on the local economies and quantifies the reasons some of America's biggest cities are struggling to rebuild their economies post-pandemic.
Zoom in: Migration out of Richmond, from 2020-2021, caused a $133 million drop in adjusted gross income across the city, according to EIG's analysis.
- Henrico, which also lost population, saw a nearly $81 million drop in adjusted gross income.
Yes, but: Every other county around Richmond saw big gains in the adjusted gross income from new residents, including Chesterfield, with $150.5 million more from 2020-2021. Goochland, meanwhile, saw nearly $91 million more in income from new residents.
Be smart: In 2021, the Richmond area saw 12,541 new residents move in just from Northern Virginia, we reported earlier this year.
- In total, the Richmond region added 27,640 people between April 2020 and July 2022, and nearly all of them landed in the counties around the city and not the city proper.
What they're saying: "The scale of urban income flight is a lot larger than I thought it would be," said Connor O'Brien, who conducted the analysis at EIG.
- "It's very likely that the last couple of years in superstar cities, high earners have become more mobile, while everyone else has been stuck."
What we're watching: The data only runs through 2021 — but, based on other evidence, the trends may have eased but not reversed, O'Brien said.