Kelly Swift grew tired of the Los Angeles area a few years ago so she decided to leave—and take her job with her.
Ms. Swift kept her role in health-care information-technology consulting, and her California salary, when she and her family settled in a suburb of Boise, Idaho. Her employer didn’t mind that she started working from home.
Ms. Swift joined a group of workers fueling a renaissance in American cities that lie outside the major job hubs. People who do their jobs from home, freelance or constantly travel for work are migrating away from expensive urban centers such as Los Angeles and San Francisco toward cheaper, smaller cities including Boise; Denver; Austin, Texas; and Portland, Ore.; according to economists and local residents.
That has brought a boom to these midsize cities, and while the ultimate effects aren’t yet clear, the development comes with a few downsides. Many places are dealing with growing pains like fast-rising home prices and traffic congestion, but aren’t accruing all the economic benefits, such as the deep investments companies often make in the areas where they are based.
“One of the bummers is that they are not necessarily joining the workforce,” said Sheila Smith, a real-estate agent in Boise. Many of the out-of-town arrivals she sells to work from home or commute to jobs in distant cities, she said.
Additionally, workers tend to spread out geographically during an economic cycle’s later stages, economists say, raising questions about how these cities will fare in a downturn. Workers are usually more confident—and employers more lenient—when the economy has been flourishing.
Ms. Swift said she and her family were effectively living paycheck to paycheck in the Los Angeles area. But living in Boise is 35% less expensive than living in Los Angeles, according to personal-finance website Bankrate.com. She and her husband, who have two children, bought a house in the Boise area after renting in L.A. It is twice as big as their old place, but the monthly payments are half as much as their L.A. rent. There was also enough room for her mother to move in.
“We all love it,” she said. “We have a much higher quality of life here.”
Some regions see remote work as a promising way to lure people who otherwise wouldn’t consider the move. Vermont and the Shoals area of Alabama, among others, have introduced giveaways to draw telecommuters in the last few years. A program in Tulsa, Okla., hands some arriving remote workers $10,000 in cash. “You’re looking for something new,” says the website for the program, which is sponsored by the George Kaiser Family Foundation. “We’re looking for great people to join the Tulsa community.”