Is Vermont on the verge of an economic and population boomlet?

(psst. But if so, don’t tell the Wall Street Journal, which apparently doesn’t understand what’s going on here at all. Otherwise, it might dispatch another confused reporter. Details below).

Don’t start counting the money yet. Don’t put up the barricades, either; multitudes are not about to mass on the state’s borders clamoring for entry. Then there’s this recession business, which may or may not be at the end of its beginning or the beginning of its end. Prosperity could be around the corner, but not necessarily the nearest corner.

Still, there does seem to be a concatenation of demographic, economic, and social developments that just might create an era of affluence and energy in the state.

With needless to say, some potential costs, both financial and cultural.

The evidence is found in a new report from the U.S. Department of Agriculture. It’s called Baby Boom Migration and Its Impact on Rural America, and it’s by John Cromartie and Peter Nelson of USDA’s Economic Research Service.

What the analysts found is that those Baby Boomers, who have been dominating and bedeviling American life since they first emerged in 1946, are approaching retirement age. Over the next 20 years millions of them will stop working and many of those millions will move hither, thither, and (of course), yon.

Nothing new abut that. What does appear to be new is that for many of these aging Boomers, ‘yon’ is neither in the city nor in the suburbs. It’s in the country, or “non-metro counties,” as the demographers put it.

Demographic statistics can mislead. For years, many people were moving to “non-metro counties,” but they weren’t really moving to the country. They were moving to non-metro counties that were right next to metro counties. Adjacent metro counties, to the pros. They weren’t becoming rural; they were becoming exurban.

Not these folks.

“Measured in terms of relative change, populations in more remote (nonadjacent) nonmetro counties will experience the most dramatic changes from Baby Boomer migration,” the report says.” The effect of remoteness, or nonadjacency, becomes slightly positive for migrants in their sixties.”

That’s because the Baby Boomers (the oldest are now 63) nearing retirement don’t want city conveniences as much as they want “desirable physical attributes—pleasant climates, mountains, beaches, lakes.” These counties, says the report, are likely to increase their already high share of Baby Boomer migration.”

Remoteness, pleasant climates, mountains, beaches, lakes? That’s Vermont, right?

Well, four out of five ain’t bad.

In fact, the report makes it clear that one advantage Vermont does not have when it comes to attracting Baby Boomer retirees is location.

“For virtually every age group…the effect of southern destinations is positive, “ the report says. “In addition, the particularly strong pull of Florida and other States in the South Atlantic region reflects a long association with older age migration.

But the retirees-to-be who are not sun worshipers might find Vermont an attractive destination, and it could behoove state policymakers to take advantage of this potential source of people and money. In general, people who move after retirement have a bit of money, and they use it to buy goods and services where they relocate.

“New Baby Boom residents are likely to have a positive

impact on income and employment levels in migration destinations.,” the report say.

And while they’d cost some money, largely for health care services, they don’t add to school populations.

In fact, they wouldn’t add all that much to the total population. We’re not talking hordes here. The report projects that some 400,000 Boomer retirees will move to remote non-metro counties throughout the Northeast during the decade starting next year.

There’s an awful lot of Northeast, and most of it is warmer than Vermont, so the state could expect only several thousand of these Baby Boomer retirees to move in—enough to make an economic impact, not enough to clog up the place.

Which is probably a relief to the folks who live here now, first because at some point population growth endangers nature’s integrity, and second because old people tend to be grouchy.

Another reason Vermont can expect to attract some of these retirees is that many of them are already here part-time. They own Vermont vacation homes or visit every year. According to the report, it’s common for people to move to an area where they had been vacationing.

The report describes. It does not recommend. But it’s clear from its contents what Vermont has to do if it wants to attract some of these retiring Boomers: Maintain the integrity of those “amenities,” make sure high-speed Internet service is available everywhere, encourage the growth of adult education and cultural institutions.

There is, according to the report, one other vital factors when it comes to attracting Boomer retirees—real estate prices. People in their 50s and 60s, the report says, “are moving away from areas with higher median home prices.”

Wait a minute. Doesn’t that put the kibosh on Vermont, where from both left and right come complaints that housing prices are too high and that the state is not “affordable”?

Apparently not., at least not according to the calculations of Razib Kahn, a scientist who blogs for Gene Expression and who (apparently) likes to play with social/economic statistics. Using U.S. Census Bureau figures, he calculated the relationship between income and housing costs for every county in the country.

And how did Vermont come out? Housing was slightly on the inexpensive side compared with income. People get less house for their money on the West Coast and even in the rural South (probably because income there is so low).

Relative to the rest of the country, though, Vermont seems downright affordable, at least when it comes to housing.

Downright safe when it comes to housing, too, which is why the state has the lowest foreclosure rate in the country.

A fact acknowledged by Gary Fields of the Wall Street Journal, who also noted that “Vermont’s strict mortgage-lending laws largely prevented the state’s residents from signing the types of dubious home loans written in other markets across the country.”

By and large, though, the story in Tuesday’s paper concentrated on all that Vermont has suffered, its policies keeping it “on the sidelines of the housing boom and the economic bonanza that came with it. Vermont’s 10-year growth trails the national average.”

By all of three percentage points.

Worse, “Vermonters didn’t see the same sharp rise in home ownership that swept much of America in recent decades.” Nationally, the story said, the percentage of owner-occupied houses rose by 4.2 percent, all the way up to 68.1 percent. Poor Vermont. Its rate rose by a mere 1.1 percentage points .

Yes, to 73.7 percent.

Did anybody ever tell these guys that at a higher level percentage gains are almost always going to be lower?

Still, the point has been made and perhaps Vermont should be ashamed of itself, with all those laws that make it hard for banks to lend money to people who probably can’t….you know…pay it back.

How passé.

Tags: Housing, the Wall Street Journal

This entry was posted on Wednesday, August 19th, 2009 at 12:15 am and is filed under Business & Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.