Economic outlook conference talks "in-migration"
The theme of this year’s Economic Outlook Seminar was the wave of Americans relocating to Montana in recent years, or in the words of the event’s organizers: “in-migration.”
The 48th annual conference was held in Kalispell Tuesday, one of seven locations throughout the state on this year’s tour by the University of Montana’s Bureau of Business and Economic Research.
The seminar’s keynote speaker, economist Bryce Ward, discussed the trends driving the increase in Montana’s popularity — often attributed to the hit television show “Yellowstone” — and what the state’s future might look like.
Ward calls Montana’s increasing draw a result of the “high amenity effect,” saying that the state is appealing because of its reputation for world class outdoor recreation and nice views.
The rise of the knowledge economy and the work from home phenomenon has led to educated professionals turning their gaze to Montana’s stunning vistas, according to Ward. In his presentation, Ward shared that 45% of people moving to Montana in the last year have a college degree.
Ward described their thought process: “Let me find mountains, lakes, and rivers.”
The trend goes back several years, but was accelerated by the Covid-19 pandemic and its ripple effects, increased desire for outdoor spaces and the shift towards remote work, said Ward.
Although Montana’s population has been growing for years, statistics cited by Ward show that the state gained 28,000 more people in 2021 and 2022 than were projected at the pre-pandemic pace.
Increased demand on scarce resources such as housing has led to increases in prices as communities grapple with how to grow supply — or not.
In the Kalispell area, house prices increased 68% from 2019-22, according to the Federal Home Finance Agency data, the largest increase in the state over that time period.
According to Ward, Montana communities and policymakers have two choices: deal with the consequences of cost or the consequences of size. He pointed to different examples of cities that have reacted differently, Las Vegas and San Francisco.
Las Vegas has decided to increase housing supply, which has kept prices lower but has put increased pressures on other scarce resources.
In San Francisco, where the city’s geography, policies and other factors have limited development, the increase in popularity has led to a spike in housing prices that has pushed some locals out.
The discussion on whether to or how to expand is all about trade offs, said Ward.
If Montana cities decide to increase their housing supply and expand other necessary infrastructure to accommodate demand, it could bring benefits such as increasing economic opportunities and consumer amenities. This could come at the expense of increased strain on scarce — and unexpandable — resources such as lakes and rivers, as well as increased congestion.
If cities decide to resist expansion, it could lead to the opposite situation, where Montana’s resources are preserved and spaces stay wide and open — but would reduce opportunities for workers and drive housing prices even higher, potentially pricing long-time residents out of the state and only allowing wealthier Americans to relocate to the state.
Some of these trends can already be seen in Kalispell and the Flathead Valley.
Kalispell’s poverty rate has increased from 13% to nearly 18% in the last year, according to stats cited by Kalispell Chamber of Commerce President Lorraine Clarno. Clarno also mentioned in her remarks that building permits have slowed, with all sectors down in 2022 since their 2021 highs. Remarkably, no single-family residential permits were issued in Kalispell in the last two months of the year.
The state faces tough decisions, but Ward sees a silver lining to the phenomenon, saying that the challenges of growth are better than those faced by areas in decline with limited options.
Reporter Adrian Knowler can be reached at 758-4407 or aknowler@dailyinterlake.com