TCS Daily

Third Wave Gentrification

By Michael Totten - June 23, 2005 12:00 AM

Last weekend I left my city of Portland and headed out to the nearly depopulated northeastern corner of Oregon, to the small town formerly known as "Halfway." The town recently changed its name and posted a sign on the outskirts -- "Welcome to Oregon: America's first dot-com city."

Don't let the sign fool you. There's nothing dot-com about it, not really, not yet. In exchange for the name change -- a naked publicity stunt if there ever was one -- the company donated computers to the school and promotes the local microscopic tourism "industry" on its Web site. is a tourist destination of sorts because it's just down the road from Hell's Canyon, the deepest canyon in North America. (Yes, Hell's Canyon is deeper than the Grand Canyon. But it's a six-hour drive from the nearest international airports in Portland and Seattle and it's a royal pain to get to even if you live in this state. That's why you haven't heard of it.)

Only a couple hundred people live there. And from the look of the place at least half of them are senior citizens. The town is almost painfully low tech and provincial. It's surrounded on all sides by a beautiful but brutally isolating vastness so empty you could fit entire nations inside it. Not only is no Internet boom-town, you have to drive almost 100 miles out of it before you can even make a call on your cell phone. The town's name and its slogan are lies.

It occurred to me, though, that the day places like this one will become real dot-com towns may be coming.

Real estate in much of rural America is shockingly inexpensive, especially in the remote parts of the West. Houses are practically free compared with what they cost in Seattle and Portland, not to mention what they cost in New York, Los Angeles, and Chicago. That's because hardly anyone can move there and find a job. First Wave agriculture economies (to borrow Alvin Toffler's terminology) require fewer and fewer humans to do the work. These places hemorrhage young people to large urban areas, and they've been doing it ever since the Second Wave Industrial Revolution got rolling hundreds of years ago. Rural economies keep spiraling downward, and home prices circle the drain along with them. When the current generation of senior citizens passes, and a smaller number of young people grow up to take their places, home prices will be knocked into oblivion. The number of houses for sale will drastically exceed the number of people who live anywhere near them and might want to buy one.

Meanwhile, telecommuting jobs are more common than ever. There will only be more of them in the future. In the past such jobs were rare because they were impractical or downright impossible. Blue collar workers needed to show up in person at factories. Office workers didn't have email, teleconferencing, instant messaging, and other various "virtual water cooler" places to meet and discuss work projects online. Now they do.

I telecommute at several part-time writing and editing jobs simultaneously. Several of my old colleagues in the high tech industry do, too. One former co-worker of mine now tests software for a Portland company from the beach in Costa Rica. It's a great deal for him because, hey, he gets to live on a North American salary in an inexpensive ecotourism paradise where tech jobs of that sort of have never even existed. The company benefits, too, because it doesn't have to rent office space for him anymore.

There isn't, not yet anyway, a huge outflow of telecommuting employees from the cities to the American countryside or to the beaches of Latin America. That's partly because there are very few households where both wage-earners telecommute. If one spouse has a day job rooted in a specific geographic location, the telecommuting spouse has to stay put. But if the number of telecommuting jobs ever reaches, say, 30 percent of the total number of white collar jobs available, millions of American households will include two wage-earners who can live absolutely anywhere they want as long as they can connect to the Internet.

These two trends -- declining rural real estate values and increasing white collar telecommuting jobs -- are slowly approaching their respective tipping points. When they both reach those points, a third new trend will likely be born. At the same time large numbers of people can effectively work from anywhere, real estate in the countryside will be both plentiful and even more dizzyingly cheap than it already is. Many who today leave cities for the suburbs because they want to live in "the country" will have the option of actually living in the country at hugely reduced cost, with real peace and quiet, with vanishingly close to zero crime rates, and with zero-minute commute times. Towns like may, then, become small dot-com cities in fact as well as in name.

The First Wave agriculture revolution created small towns - or "villages." The Second Wave Industrial Revolution depleted and drained them. The Third Wave tech revolution just might restore them.


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