The Millennial Generation – the biggest Canadian generation in history – is reversing the migration back to rural areas and moving out of city centres.
Migration
Migration, whether internal or international, has always been one of the forces driving the growth of urbanization and bringing opportunities and challenges to cities, migrants and governments. Increasingly, municipal authorities are becoming recognized as key actors in managing migration and have started including migration in their urban planning and implementation.
A majority and growing proportion of the world’s population is living in urban areas. The share of the world’s population living in urban areas is expected to increase from 55 per cent in 2018 to 60 per cent in 2030 (UN, 2018). In 1950, 30 per cent of the global population was living in urban areas.
In 2018, Northern America was the most urbanized region in the world, with 82 per cent of its population living in urban areas.
Urban population growth has been propelled by the growth of cities of all sizes. In 2018, 33 megacities hosted 13 per cent of the global urban population. By 2030, the number of megacities is projected to increase to 41, with 14 per cent of urban dwellers worldwide residing in megacities.
COVID-19
This trend in migration to urban cities was seen as unstoppable. Until COVID-19 emerged. Then, everything changed dramatically and put the brakes on migration and even movements of any kind.
It’s starting to sound trite, but COVID-19 has radically changed the way that many people live and work. Eight months into this pandemic, these changes are producing interesting conversations about the potential of an urban exodus to the suburban, small-town and rural places, driven by changing perceptions and priorities.
There’s some disagreement about whether these shifts are actually happening, or if the pandemic has simply accelerated relocation decisions that were already in motion. Either way, these shifts may end up redrawing the map of where Canadians live, producing complex social, economic, and political implications for both rural and urban communities alike.
The decision to head for the hills is complicated and not entirely rational. Density and disease are not necessarily correlated and rurality and safety are not synonymous. Urban centres are often better equipped to respond to crisis due to decades of policy decisions that have concentrated resources in cities.
Government Investments
What underpins and promotes Zoom Towns is connectivity. The ability to connect to the internet from anyplace, at anytime, and in a variety of ways. Modern internet connections are sufficient. However what is coming next is a fantastical advancement and literally eliminates the limitations on connections in rural and remote communities.
Governments in both Canada and the USA, as well as many other countries around the globe have significant programs underway to develop equal connectivity for all citizens regardless of where you live. These programs offer funds to stimulate the development of connectivity.
How serious is the connectivity gap? It’s significant. The problem is speed, which is often too slow for rural and remote Canadians to be able to take advantage of even a fraction of what the Internet has to offer. As recently as five years ago, the Canadian Radio-television and Telecommunications Commission (CRTC) and governments across Canada were targeting universal broadband coverage at download speeds of 5 megabits per second (Mbps), and upload speeds of 1 Mbps. At the time, this was seen as sufficient for most consumer and business applications.
Today, we have largely achieved those goals. The overwhelming majority of Canadians can access broadband at speeds of at least 5 Mbps/1 Mbps. But the landscape has shifted.
These speeds are now too slow for cloud-based software applications. Or online learning resources. Or high-definition streaming videos. They are often too slow to support multiple users or to use telehealth services properly. They are clearly too slow when an x-ray cannot be uploaded in a Northern community unless other Internet users are temporarily kicked off the Internet.
To take full advantage of the opportunities offered by the modern Internet, 50/10 speeds are necessary, affording the capacity to download at 50 Mbps and to upload at 10 Mbps.
The Canadian federal Liberal government promised $5 billion-$6 billion for the Universal Broadband Fund in the 2019 budget, aiming to get 100 per cent of Canadians connected to broadband by 2030. The fund follows 2016’s Connect to Innovate fund, which pledged $500 million to connect 300 rural communities by next year.
Internet Technology Advancements
The first technology to be developed is local wireless internet. These Fixed Wireless Access providers use a hodge-podge of terrestrial technologies to facilitate these connections. Often they work fairly well, but they seriously lack in robustness and customer care capabilities.
5G is just starting to emerge. In its infancy today, it is expected to take five or more years to develop to the point whereby it can be used in a meaningful way. In Atlantic Canada, Bell Aliant is rolling out its initial low band services for 5G and have updated their cellular networks to provide 25 Mbps/5 Mbps service. In six months from now they will deploy the first wave of the mid band and upgrade these connections to 50 Mbps/10 Mbps. Ultimately, it is realistic to achieve download speeds closer to 300 Mbps or 400 Mbps with upload speeds nearing 40 to 50 Mbps.
It is anticipated that Elon Musk’s new Starlink service which is in early days testing will deliver satellite internet connections as soon as 2021 for Canadians. In its first stage of testing, it has proven to be effective at over 100 Mbps with ultra low latency. The promise in the next few years may realize 1,000 Mbps download speeds with nearly equal upload speeds. This service will provide stellar connectivity and allow major links to the internet from anyplace. It will erase the un-served and under-served issue instantly, albeit at a cost estimated to be cost to $100 CAD per month.
The CRTC approved SpaceX’s Starlink to sell its services in Canada. “After consideration of the comments received, the Commission has approved the application and a BITS licence is enclosed,” wrote Doucet, in a letter dated October 15, 2020.
Zoom Towns
Leaving the city requires people to replace urban resources with individual reserves: a guaranteed salary, the ability to work from home, and the social and economic capital to support relocation.
And while many rural communities have undertaken significant steps to ensure they are welcoming to newcomers, issues with racism and xenophobia still exist. Changing these narratives is not a new challenge for rural leaders, and, like many other communities, rural Canada has work to do in addressing systemic and structural problems, whether it be with racism, healthcare facilities, choice in retailers, or basic needs for schools, first responders, and clean water, sewers, and other resources.
Hot Rural Markets
Housing in a certain type of town could not be hotter. And some of them have been getting attention way out of proportion to their importance to the economy for an obvious reason: They are the places where corporate executives, Bay Street barons, entertainment stars, and more than a few journalists have fled to escape the perceived dangers of crowded cities filled with people who might be carrying the coronavirus. As well-paid knowledge workers who can do their jobs anywhere now flock to these “Zoom towns,” home prices are surging and housing inventory is dwindling. Normally, high prices and low inventory would lead to a construction boom, but many of these communities tightly regulate new building. The upshot might be a brief boom that gets choked off by unsustainable prices.
Canada is now several months into the housing-market recovery and we have early data about where the hot spots are. It’s hardly a surprise that home prices are up 22 per cent from a year ago in the Muskoka, given its proximity to the enormous Toronto job market and its throngs of knowledge workers. The average sale price of all residential sale types across Muskoka is up 22% year to date, $732,000 up from $591,000 a year ago at this time.
While COVID-19 lock-downs in March and April slowed down the housing market in Western Canada, transactions in Kelowna, Saskatoon, and Vancouver resumed by May, with sales in both May and June surpassing year-over-year levels. Many buyers put their plans on hold at the peak of COVID-19 lock-downs, but they returned to the market quickly to make up for lost time. Edmonton’s housing market quickly bounced back to pre-COVID levels in June, while Saskatoon experienced its busiest June in years; this momentum is anticipated to continue into the fall market, with RE/MAX (author of the study) brokers and agents estimating a three-per-cent increase in average residential sale prices for the remainder of the year. Overall, brokers and agents in Western Canada say the potential buyers they are talking to are not too concerned with a potential second wave of COVID-19 impacting their real estate journey, and RE/MAX brokers are estimating steady activity to round out 2020.
The appeal of lake, beach, or mountain towns with built-in cultural amenities is obvious, which is why they have historically drawn tourists and college students. But a limiting factor for economic development and home prices has always been that there were not many high paying jobs available. Virtual work changes that by allowing people to bring their jobs with them, creating the potential to reshape these communities, making them less reliant on transients. COVID-19 is helping eliminate stigmas around remote work.
President and general manager of Dell Canada, Mike Sharun says, “the pandemic is helping people see working from home in a whole new light, adding that if companies prioritize security solutions for remote work, it will be widely adapted and form the workplaces of the future”.
Luxury Homes
While the classification of “luxury homes” is specific to each region and differs across the country by minimum pricing, Canada’s overall luxury market has remained strong throughout the pandemic, with market conditions unchanged from the beginning of the year in most regions.
When it comes to the hottest Canadian housing markets of Toronto and Vancouver, the luxury segment here is considered balanced, with Vancouver pushing into a sellers’ market. Vancouver is beginning to see more interest from move-up buyers instead of the foreign buyers who drove demand in Vancouver’s luxury market prior to COVID-19. This was likely due to travel restrictions brought on by the pandemic. In Toronto, activity was slower than usual this spring as buyers did not have any urgency to transact during the pandemic. Both luxury markets are could likely remain balanced for the remainder of the year, according to RE/MAX luxury specialists.
The luxury segment in secondary markets such as Hamilton are seeing a slight uptick in activity, with high-end buyers also seeking more square footage and larger properties outside of city centres. Hamilton has experienced an increase in buyer interest from residents from Brampton and Mississauga looking to relocate to the region.
Conclusion
With estimates indicating that over 60% of all Canadian workers are now working from home, and the second COVID wave upon us, the emergence of the virtual worker is starting to look more permanent and less of a blip. With students also learning from home, this virtual lifestyle is taking root. New home builders are now planning integrated offices and high speed optical fibre connections as standard features in new homes. Power outlets and USB charging ports are now strategically built-in to all rooms.
This paradigm shift seems to be a longer term trend and has some merit. With the baby boomers retiring en mass, the migration out of urban and suburban environments to rural and remote is catching on fast. The advent of the digital nomads are upon us.
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References:
Greiff, J., & Sen, C. (2020). Booming ‘Zoom towns’ should ease city housing costs. Bloomberg News. Retrieved on October 17, 2020 from, https://www.bnnbloomberg.ca/booming-zoom-towns-should-ease-city-housing-costs-1.1475704
Smith, L. (2020). ‘Zoom towns’ are exploding in the West. Fast Company. Retrieved on October 17, 2020 from,https://www.fastcompany.com/90564796/zoom-towns-are-exploding-in-the-west?partner=feedburner&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+fastcompany%2Fheadlines+%28Fast+Company%29
Unknown. (2019). High-Speed Access for All: Canada’s Connectivity Strategy. Canada.ca, Government of Canada. Retrieved on October 17, 2020 from, https://www.ic.gc.ca/eic/site/139.nsf/eng/h_00002.html
Unknown. (2020). Canadian Housing Market Outlook (Fall 2020). Re/Max. Retrieved on October 17, 2020 from, https://blog.remax.ca/canadian-housing-market-outlook/
Weeden, S. A., (2020). The coronavirus pandemic is pushing Canadians out of cities and into the countryside. The Conversation, Academic Journalism Society. Retrieved on October 17, 2020 from, https://theconversation.com/the-coronavirus-pandemic-is-pushing-canadians-out-of-cities-and-into-the-countryside-144479
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About the Author:
Michael Martin has more than 35 years of experience in systems design for applications that use broadband networks, optical fibre, wireless, and digital communications technologies. He is a business and technology consultant. He offers his services on a contracting basis. Over the past 15 years with IBM, he has worked in the GBS Global Center of Competency for Energy and Utilities and the GTS Global Center of Excellence for Energy and Utilities. He is a founding partner and President of MICAN Communications and before that was President of Comlink Systems Limited and Ensat Broadcast Services, Inc., both divisions of Cygnal Technologies Corporation (CYN: TSX). Martin currently serves on the Board of Directors for TeraGo Inc (TGO: TSX) and previously served on the Board of Directors for Avante Logixx Inc. (XX: TSX.V). He has served as a Member, SCC ISO-IEC JTC 1/SC-41 – Internet of Things and related technologies, ISO – International Organization for Standardization, and as a member of the NIST SP 500-325 Fog Computing Conceptual Model, National Institute of Standards and Technology. He served on the Board of Governors of the University of Ontario Institute of Technology (UOIT) [now OntarioTech University] and on the Board of Advisers of five different Colleges in Ontario. For 16 years he served on the Board of the Society of Motion Picture and Television Engineers (SMPTE), Toronto Section. He holds three master’s degrees, in business (MBA), communication (MA), and education (MEd). As well, he has three undergraduate diplomas and five certifications in business, computer programming, internetworking, project management, media, photography, and communication technology. He has earned 20 badges in next generation MOOC continuous education in IoT, Cloud, AI and Cognitive systems, Blockchain, Agile, Big Data, Design Thinking, Security, and more.
A great post on a new trend in housing that is reshaping our nation!