Is Remote Work the Future for College Towns in Rural America?
In so-called “college towns,” learning institutions have a huge impact on the surrounding communities and their home economies. Each September, thousands of students and their families descend on university towns, spending money on food and housing, adding to the labor pool, and stimulating local economies in highly-integrated ways. And when COVID-19 hit, it impacted not only the universities but the communities surrounding them as well.
Throughout the pandemic and resultant shutdowns, few industries suffered more financial loss than hospitality, tourism, and food service. Unfortunately, the economies of college towns often rely on all three of these industries. Beginning in March 2020, countless colleges across the US closed their campuses, shuttered their dorms, and sent their students packing. By April, more than a thousand campuses had closed because of the COVID-19 pandemic, and by September, the majority offered students a fully remote curriculum.
During this time, many elite universities with extensive alumni networks substantially reduced tuition for distance learners to accommodate lost social and academic experiences. Even so, an estimated 25% of college students delayed attending university rather than pursue online education. Because universities support their institutions through ancillary services like student housing, meal plans, and community partnerships, losing in-person learners dealt a painful blow. Sadly, this financial blow has struck both colleges and universities, as well as the small towns that surround and support them. These towns rely heavily on student and visitor spending — e.g., money from events like sports games, conferences, and parents’ weekends.
In response, many college towns have hurried to reopen campuses and thus, reopen businesses that depend on student and faculty patronage. Unfortunately, the number of COVID-19 cases spiked soon after reopening campuses in 2021, as variants of the virus like the Delta strain proliferated. As such, college towns are faced with a difficult choice. Staring down economic disaster, college towns across the country must decide how and when they will reopen and bolster themselves against future threats. Follow below to learn more.
Small Businesses Rely Heavily on Students and Staff of College Campuses
In their September 2020 article for Harvard Business Review, Sean Gallagher and Jason Palmer noted that “education is one of the least digitized and most people-intensive economic sectors.” Because of this, the operations of higher education institutions were wholly interrupted during the COVID-19 pandemic. Many universities adapted, offering virtual courses and other services to students in the US and across the globe. However, while college faculty, students, and administrators adapted to virtual learning, college towns did not. College towns, by definition, are dominated by a campus’ population. Much like a resort town, the economy of a college town is fueled by seasonal, situational spending.
In rural areas across the US, few towns would experience such an economic boost without a college or university present. Writing for The Hechinger Report in 2019, Elizabeth Hewitt noted that “higher education in the United States is a $364 billion-a-year industry.” Before COVID, the industry employed “nearly four million employees.” In rural areas, college towns contribute to the economy “not just bolstering the local job market and spending money, but by attracting people to settle in places they likely would not otherwise go.” In July 2020, Jessica Snouwaert wrote in an article for Business Insider that “some businesses [in university and college towns] make 80% or more of their income from university-related traffic.”
Highly Contagious COVID-19 Variants Confuse College Reopening Plans
While about 40% of colleges and universities across the country — particularly community and public schools — were still virtual this Spring, others pursued in-person learning. In fact, private colleges that did operate during the 2020/2021 school year enjoyed high enrollment for the upcoming 2021/2022 year.
However, highly contagious variants of the original COVID-19 virus might have placed reopening and continued operations plans on hold. As concerns over the Delta variant and its break-through capabilities emerged and worsened early this summer, concern over in-person learning mounted.
International Attendance Could Falter Due to Delta Variant
Enrollment of international students, who pay far higher tuition than domestic students, fell to record lows last year. Paloma Esquivel wrote in a November 2020 article for The LA Times that “enrollment of new international students at US higher education institutions was down by 43%” in the fall of 2020. However, 90% of college campuses “reported that foreign students deferred attendance to a future term.”
Writing for CNBC in August of 2020, Natalie Zhang noted that “more than 1 million international students come to the United States each year.” In 2018, this large block of college students “contributed almost $45 billion to the US economy…through spending on retail, dining, and transportation.”
Before the COVID-19 Delta variant emerged as a significant public health concern in the US, researchers and market watchers believed international students would return in full force this fall. Referencing recent IIE data in an early June 2021 article for Forbes, Michael T. Nietzel indicated none of the institutions surveyed intended “to offer virtual instruction only.” More than 50%, however, reported that “the majority of their international students attended classes in person at some point during the spring semester.” Before news of the Delta variant hit, universities were preparing for “a strong recovery in international education enrollment as they emerge from the pandemic.’” Now, that path is less sure.
Testing, Mask Mandates, and Other Restrictions May Discourage In-Person Attendance
As infections and hospitalizations due to the Delta variant surge, colleges around the country have reconsidered their plans to reopen. Dozens of universities like Stanford, the University of South Carolina, and UPenn have announced restrictions for in-person attendance this fall. Proof of full vaccination, weekly testing, and mandatory masking represent just a few of these restrictions and recommendations. Because a return to in-person attendance — and all the spending that comes with campus life — is so uncertain, some college towns are searching for ways to make up the difference.
College Towns Court Remote Workers for Reliable Income
Instead of waiting for university campuses to reopen, small businesses and local governments of some college towns have begun exploring different avenues. In seeking financial independence from students and faculty, college towns are preparing to embrace another artifact of the COVID-19 pandemic: remote work. For college towns whose university has shut down permanently, luring remote workers with cash incentives might be the only way to keep their economy moving. In towns where their university is still operating but attendance is low, attracting remote workers offers a much-needed boost. If full-time distance learning continues for even a tiny percentage of college students, college towns could experience a decrease in revenue. Remote workers could fill this gap.
In a June 2021 article for The Chronicle of Higher Education, Lindsay Ellis outlined pilot programs recently launched by Purdue University and West Virginia University. For its part, Purdue plans to set up a “remote-working community” in West Lafayette, Indiana, at its campus headquarters. With the investment of a development company, Purdue will pay remote workers $5,000 per person to relocate to Indiana, where they will live in low-cost housing and can access university resources. Purdue’s “remote-working community” will be housed in facilities owned by the university.The efforts seem to be paying off: Crexi’s platform in Q2 observed a 136% increase year-over-year the amount of unique leads seeking property in the Lafayette-West Lafayette, IN, MSA.
Crexi also observed similar lead interest growth in the Morgantown, WV, metro area, where the University of West Virginia has similar plans to expand its population and infuse the local economy with fresh capital. West Virginia University has teamed up with VA’s tourism agency to attract passionate outdoors-loving individuals frustrated with city life. WVU plans to offer “free certifications in remote work or remote management” as well as other incentives to those who relocate. These include “$12,000 in cash over two years, the subsidizing of activities like skiing and rafting, and co-working space and social programming.” Between Q2 2020 and Q2 2021, the amount of leads interested in regional properties on Crexi increased by more than 188%.
Pre COVID-19, college and university enrollment was already on the decline. Between 2016 and 2020, more than sixty colleges across the United States shut down due to expensive upkeep and falling enrollment. College towns must now diversify their economies and populations to survive. As “anchor institutions,” Russell Flannery writes in an article for Forbes college campuses are what “keep the surrounding towns alive.” College towns can become “boom and bust” communities without staff, students, and faculty to patronize businesses.
Interviewing Jane Kolodinsky of the University of Vermont in Burlington, Flannery notes that many closed institutions have already attempted projects like those planned by UWV and Purdue. Kolodinsky notes that an investor who purchased Green Mountain College intends to convert the space for sustainable agriculture. The College of St. Joseph plans to convert its university buildings into affordable housing for the elderly. Of course, these solutions serve the community but do not “help the institution that closed.”
As such, a mixture of the approaches listed above will likely serve college towns best. And while colleges may look different in the future, the surrounding communities represent both viable and promising options for investing in commercial property.