Rural Economic Development Prospects in a High Energy Cost Environment

Rural America is a diverse landscape ranging from rapidly growing amenity rich communities to struggling resource-based towns and villages. A key feature is that rural population growth quickly tails off for rural communities more distant from urban centers. A long period of higher energy prices will put particular pressures on exurban and more remote rural communities that rely on urban commuting. The adverse effects will also be felt in resource-based communities. The combination of urban-centered rural growth and higher energy costs suggests the following: • More regional planning mechanisms are needed to ensure rural areas participate in urban growth; • The adverse effects of high energy costs in remote rural communities will need special policy supports including infrastructure investments and planning for (remote) rural to urban in-migration; • Higher energy costs and mortgage rates will put pressures on exurban property values, leading to local property tax shortfalls that may force state intervention. Because past trends are likely unsustainable, future infrastructure planning should be based on realistic expectations of exurban growth; • Higher energy costs will likely place strains on overcommitted exurban households, requiring workplace supports to ensure their financial viability.