Rust Belt Revival, a Great Migration

I am predicting a second Great Migration in the United States, one that contradicts recent trends. For all my life, Americans flocked to the Sun Belt: southern states with mild winters. They abandoned northern states, in particular the Rust Belt from St. Louis to Buffalo. I’m predicting a reversal. I’m predicting over the next generation people will leave the Sun Belt for northern states, particularly the ready-built Rust Belt cities. And I’ll put some money where my mouth is. But first, my narrative.

In my early years in South America, I saw how life required little artificial energy. None of my apartments had heating or air conditioning. I never owned a car. I marveled at the wisdom of the early modern era and how the colonists built their great Latin American capitals in moderate climates. Specifically, nowhere too hot. If a hot city was big before the 20^th century, it was a slave port, and not very big anyway, like that sweltering shithole in Cartagena. No, the real money was in Mexico City, Bogota, Lima, Rio de Janeiro and Buenos Aires.

I began to revere those cities that supported human life for centuries before modern plumbing or fossil-fuel energy. And I developed a contempt for those places that did not, particularly cities that only developed after automobiles and air conditioning.

My entire thesis of a second Great Migration is premised on climate change, that global warming is moving the regions that support human life. The places where it’s becoming difficult will lose population to those where it’s not difficult.

The West, the Sun Belt and the coasts have been in high demand for decades. I’m predicting the tide will turn. West of the Continental Divide is prone to wildfires. States dependent on the shrinking Colorado River lack freshwater, forcing them to curb growth or agriculture (or both). The Sun Belt states face extreme heat that is deadlier than a frigid winter. Large swathes of coastal communities are unsustainable in the face of rising sea levels and more frequent hurricanes.

No place is completely safe, as we’ve seen deadly flash flooding from Vermont to Appalachia, and 120-degree temperatures in Canada. But the low-risk areas in the United States are east of the continental divide, north of the Confederacy and miles from the coasts. The Midwest and inland northeast.

Extreme heat is in the news today but has yet to reach catastrophe in the U.S. I believe that will change, that there will be a Katrina-like event. Over a thousand die in one city, pleas for federal help. In Texas, there is precedent for electrical grid failure. What if that happened in July or August? Some people will leave after that. Some will see the writing on the wall and leave before it happens.

Where extreme heat, wildfires, flooding and hurricanes don’t force people out of unsustainable locales, their financial ability will. My bearish case for Florida (also via email newsletter) says that even when stubborn Floridians resist nature, property insurers will not. As in California and Louisiana, major insurers are refusing to cover homes in areas prone to wildfires or storms. Or the rates they ask are unviable. In Florida, the state government now insures a fifth of all properties … the riskiest ones to boot. At some point, these government bailouts won’t cover the costs of rebuilding. And people will move to where their real estate is safer.

The Rust Belt cities that hollowed out starting in the 1950s are poised for a boom. The only risk is flooding from heavy rains. They’re pre-built with large houses and cultural institutions. They’re very affordable (for now). Many are somewhat walkable for when that carbon tax arrives (2035?). Small cities like Erie, Toledo, Grand Rapids, Fort Wayne and Decatur will be attractive to remote workers. The big city folk will find even more culture-with-a-capital-C in Detroit, Cleveland, Pittsburgh, Indianapolis, Milwaukee and Chicago. It’s a Rust Belt Revival, coming soon to a news outlet near you.

Wager

If I’m wrong, I will donate $20 to all dissenters’ preferred causes. Leave them in the comments. These can be those you know would make me cringe: NRA, anything with the word “LatinX”, Cori Bush, Donald Trump’s legal bills … anything.

How do we measure whether the Rust Belt states grow at the expense of Sun Belt states? The U.S. House of Representatives has a fixed number of members based on how population is distributed among states. The next census will be in 2030. If I’m right, the combined seats of my select Rust Group (Wisconsin, Michigan, Illinois, Indiana, Ohio and Pennsylvania) will be higher than it is today. Meanwhile, the combined seats of my select Sun Group* (Florida, Louisiana, Texas, Arizona and Nevada) will be lower.

• Rust Group combined House seats today = 79
• Sun Group combined House seats today = 85
  • UPDATE: I removed California from Sun Group, see comment below.

Given the possibilities, I have a narrow path to victory. Albeit on a long timeline.

• Rust Group higher, Sun Group lower = I WIN
• Sun Group higher, Rust Group lower (current trend) = I LOSE
• Both groups higher = I LOSE
• Both groups lower = I LOSE
• Either group unchanged = I LOSE

It’s worth noting again that I am betting against the current trend, in which the Sun Group grows and the Rust Group shrinks. Human adaptability could beat these dynamics despite my climate thesis being right. Innovators may find ways to reduce carbon emissions to zero before 2030, bolster high-value coastlines or even reverse the damage already done and cool the planet. All in the realm of possibility, let’s wait and see.

Is it 2030 and I was right? You can make a donation to my preferred charity, Rainforest Trust. Peruvian Naturals donates 3% of earnings to save those carbon-eating trees.

Who Cares?

According to Pew, 12% of Americans say climate change is not a problem at all, 20% say it’s a small problem and 24% oppose efforts to reduce climate change. Some people believe it’s outside their personal control, so why bother? If you’re in one of those camps, here’s why you should care.

Even if you don’t take my wager, where you live is a bet in a way. If you own real estate, you have money invested in that area. If demand for that area rises or falls, you have real financial risk. If you don’t own real estate, your most valuable assets are your time and energy. Do you want to invest in an area that will grow or decline?

If you’re nearing retirement or financially independent, maybe you don’t need to care. But if not, ignoring climate risk is a bet whether you’re deliberate about it or not. You’re betting on the status quo, or the status quo before recent years if you need weather to go back to how it was before. Your skin is in the game.

Apologies for this being so Uncle Sam-centric. But I haven’t gone too granular into Latin America’s geographic implications. A few eye-popping phenomena caught my attention, including:

• Lima has seen real rain in the last year (not just “garua”).
• Lima’s beach season went into June this year.
• Mexico City is getting warm enough for the mosquitos that carry dengue and Zika.

You just have to study country by country, region by region. But generally Latin people go without HVAC and cars, so real estate and outlook may not change much at all unless it’s not an existential threat like in Caribbean coastlines or small cities built into hillsides of Andean Mountains.