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Remote work force comes to the forefront

The answer to Routt County’s quest for economic development snuck up on the community from behind.

A study just released by the Routt County Economic Development Cooperative concludes that workers who live here but make their livings in distant cities and states are contributing at least $35 million to the local economy each year. Business leaders were only vaguely aware of the trend until two years ago.

Noreen Moore, the business resource director for the Economic Development Cooperative, said this week that the study estimates there are 700 households — 10 percent of the total — in Routt County for which “remote working” is one of the primary sources of income. And more of these location-neutral businesses and location-neutral employees are arriving daily, Moore believes.

“These are primary workers. They are coming in the door, and they represent exactly what a new company would if it relocated here,” Moore said. “If a new company said, ‘We’re going to create 50 new jobs all offering $60,000 salaries,’ we’d be pretty excited. But these location-neutral employees are all making $150,000 — twice that amount.”

Moore, the author of the report, along with Scott Ford of the Small Business Resource Center at Colorado Mountain College, said she didn’t begin catching on to the magnitude of the remote-worker phenomenon until recently.

During the preparation of a separate report in 2003 on indicators in the local economy, Ford and Moore spotted the trend but didn’t recognize it at first. They noticed that the U.S. Census Bureau statistics for 2000 reflected people whose primary residence was in Routt County but whose W-2 forms reporting their income to the IRS were issued elsewhere.

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Curious, they looked back at the same set of statistics for 1990, and the level of intrigue was heightened. They found the number of people who fit the description in 1990 numbered 250. The number had more than doubled to 600 in a decade.

Moore and Ford resolved to gain a better understanding of the trend and to shine a light on it.

They conducted their survey in late 2005, and 61 people responded. They found three types of business entities and employees that operate remotely — location-neutral businesses where the business and owners are located in the county, location-neutral businesses whose owners live here but operate businesses located elsewhere and location-neutral employees who worked remotely for companies not located here.

“These are full-time working residents and should not be confused with the second-home industry,” Moore said. “They are motivated to resettle their families and businesses to their community of choice and spend considerable time researching different communities.”

Moore said the survey revealed that remote workers are well educated, have high household income and are between the ages of 35 and 54.

The economic impacts measured by the survey include payroll, business-to-business spending, business visitors, household spending and charitable giving.

Generally, the survey respondents were not independently wealthy, but upper-middle class people who work for a living. Their household incomes are between $100,000 and $200,000. Of the total, 22.5 percent of location-neutral business owners made between $100,000 and $149,000, and 28.6 percent of location-neutral employees fit that range. Twenty-five percent of location-neutral businesses reported household incomes between $150,000 and $199,999. One-third of location-neutral employees were in that range.

In both categories, most are married with children, and 50 percent work from home.

Moore said there was general accord on the qualities that attract location neutrals and the key elements that let them work remotely.

“Their relocations have been spurred by two developments — affordable and accessible broadband (Internet access), which became available in Routt County in 2003, and the acceptance of ‘remote working’ in the national and international business community,” Moore said.

Remote workers also identified commercial air service as being critical to their ability to live and work here. And they responded it was the sense of community that drew them here in the first place.

Despite their relative affluence, Moore is concerned rising real estate prices in the Yampa Valley could put a damper on location-neutral employees contemplating a move here. Her survey shows they tend to become very involved in community organizations. Moore thinks they could represent the next generation of community-minded families that have the potential to “hold the soil” against the erosion of Routt County’s community values.

Ironically, growth could undermine the sense of community that attracts remote workers and wealthy second-home owners, Moore pointed out.

“We as a community would really love to have these people come here,” Moore said. “They bring kids, they live here full time, and they contribute to the community. You couldn’t ask for a better match.”

Her demographic data shows location-neutral workers are looking for homes priced between $500,000 and $1 million. She’s worried that within three to five years, homes in that price range will be difficult to find close to Steamboat.

“My concern is that with the escalation of real estate prices, they will be priced out of the market,” she said.

State Demographer Jim Westkott said the impacts of second-home owners and remote workers are largely misunderstood in mountain communities such as Routt County.

He said both trends have become “economic drivers” in resort areas.

“Residential economic drivers consist mainly of second homes, but they also include retirees and Internet-based remote workers,” Westkott said.

“While each of these industries makes important contributions to the local economy and community, their effects on the community are often missed or misunderstood. Most importantly, they create the need for a substantial increase in the work force while, at the same time, causing housing prices to rise. These residential economic drivers have come to dominate the real estate markets of other resort areas in the state and are beginning to do so in the Yampa Valley.”

Westkott said that if the communities of the Yampa Valley want to minimize the impacts of the growing demand for housing developments in the area, they need to work together to plan for them and “do so with a strong understanding of their secondary effects and how they manifest themselves within the region.”

Audrey Danner of Yampa Valley Partners said that’s precisely the goal of a series of regional forums under way in the valley. Danner said the goal of the forums (the third will be held in Steamboat on May 12) is to persuade community groups and governments up and down the valley that they are all part of one system. The hope is that different groups in the region will learn to balance the issues and concerns that affect the entire system.

“We’re trying to better understand how individual and community-level decisions impact the regional system and its well being,” Danner said. “So, we’re not each protecting our own small town. Wealth is here, and more wealth is coming. We want to learn how we can treat this change as an opportunity.”

Moore urges a concerted effort to attract more location-neutral workers in the next three years, while they can still afford to purchase real estate here.