A rural rebound

Although most of the world's population is increasingly living in cities, there's apparently been another kind of shift in the United States: one on which the tech-savvy who can work from just about anywhere buy second homes in once-rural areas well before retirement, joining the ranks of the leisure class who live mostly from investments.

Call it a 'rural rebound,' but for 50 million people allergic to traffic, crowds and noise, a 'resource-extraction' economy is shifting to an 'aesthetic-based' one. But according to a story in the Wall Street Journal, the natural selection of rural areas favors the pretty:

The word "gentrification" conjures up images of once-poor urban neighborhoods invaded by cappuccino bars and million-dollar condos. Now, broad swaths of rural America -- from New England to the Rocky Mountain West -- are being gussied up, too.

Affluent retirees and other high-income types have descended on these remote areas, creating new demand for amenities like interior-design stores, spas and organic markets. For many communities, it's the biggest change since the interstate highway system came barreling through in the 1960s and 1970s.

With the Internet allowing people to work from almost anywhere, the distinction between first and second homes has become blurred. Many people are buying retirement property while they're still employed. Millions of soon-to-retire baby boomers, say demographers, will propel this trend for years to come...

And yet gentrification is selective. Rural America makes up about three-quarters of the nation's land mass, but has just 17% of the population, about 50 million people. Many mining towns and Great Plains' farming communities have stagnating or shrinking populations while more scenic communities are soaking up new residents.

One indicator of rural gentrification: An increase in residents' total dividend, interest and rent income. That measurement, tracked by the Commerce Department, is a sign that new residents -- usually retirees -- are living off their investments rather than salaries...

...baby boomers and the previous generation are moving to rural areas in increasing numbers. Kenneth Johnson, senior demographer at the University of New Hampshire's Carsey Institute, says 76% more people over age 50 moved to "recreation counties" -- places with lots of amenities and seasonal housing -- in the 1990s than in the 1980s. "This suggests that people who are now in their 50s and 60s are moving into these recreation counties more than in the past," he says.

Still, such growth also causes rural areas some definite growing pains:

...the influx of city money can be a challenge for rural economies. Infrastructure like roads and sewers becomes strained. Fire departments, which often rely on volunteers, don't expand as quickly as the housing stock. and the newcomers push prices up, in some cases forcing locals to outlying towns...

Some are finding it hard to let go of the past. Ken Roberts, an Idaho state representative, has spent his entire adult life farming hay, grass and oats on land that has been in his family since 1901. That was the year his grandfather arrived in a horse-pulled wagon whose splintered, rusted remains sit under a canopy of ponderosa and aspen pine trees on the edge of the family farm.

Now that Valley County has been discovered, the value of Mr. Roberts's family land has shot up from about $1,500 an acre a few years ago to more than $100,000 in some places. When his mother, who is in her late 70s, passes on, he estimates the federal tax bill could exceed the total earnings of three family generations. Despite the huge tax hit, Mr. Roberts says his goal is to keep at least some of the 600 acres in the family.

"There's 106 years of family history down there, and I love to farm," he said on a recent evening, as he sat in his truck and looked down on his land. Mr. Roberts acknowledges that his problem is a good one to have. But unless he sells the land to a developer, his family will remain land rich and cash poor.

So now he's looking to develop certain parcels, and use the money to preserve the rest as farmland. He's also found a way to supplement the farm's modest income: he started a construction company.