The Problem With Digital Nomad Overpopulation

The global population of digital nomads – remote workers who settle temporarily in a foreign country to combine work with travel – is growing at an incredible rate of 18% annually, according to the Gitnux Market Data Report 2024.

With around 55 countries now participating in the digital nomad visa scheme, many of the places that have taken advantage of this rising trend have reported benefits across sectors including retail, hospitality and property. Digital nomads are also helping to spread a wave of entrepreneurialism and technology skills around the world, with the potential of creating new jobs in their host countries.

However, not every digital nomad hotspot is happy about its fast-growing influx of temporary expats. Let’s take a closer look at the potential problems caused by digital nomad overpopulation, and the places where digital nomads could start to see increased regulation.

The impact of digital nomad overpopulation on local communities

Not every digital nomad hotspot is happy about its fast-growing influx of temporary expats, however. With digital nomads often staying in their host countries for long periods (usually between six months to two years), some communities are starting to feel the strain of a large influx of new citizens.

With digital nomads likely to rent property, rely on public transport and take advantage of public services, their presence in certain places is contributing to problems such as housing shortages, rising living costs, strains on infrastructure and cultural tensions. In places where digital nomadism is particularly popular, overpopulation is becoming a common issue, and has even led to backlash from local residents.

In response to these challenges, some national and city governments are starting to implement measures aimed at managing the influx of expats and digital nomads, in order to preserve the well-being of their residents.

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The problems caused by digital nomad overpopulation

While many countries benefit from hosting digital nomads, a few places in the world – especially those that have become particularly popular in recent years – have noted several consistent issues caused by the rapid influx of remote workers. Some of these problems include:

1/ Failing to adapt to local culture

While exposing yourself to new cultures is often touted as one of the benefits of nomadic living, many digital nomads have come under fire for failing, or even refusing to integrate with their local cultures.

Whether by segregating themselves to live in isolated expat bubbles, by swarming to ‘touristy‘ locations, or by continuing to live according to their own national culture, many people have noted a growing resentment against digital nomads from local people who feel digital nomads are exploiting the cultural capital of their homes.

Some local residents go even further, blaming digital nomads for the rise of social issues such as gentrification and two-track neighbourhoods – in other words, in neighbourhoods where wealthy digital nomads gather, working-class locals are pushed out when landlords and business owners seize the opportunity by raising prices and redeveloping established facilities.

2/ Shortage of housing

As digital nomads flock to destinations renowned for their affordability, they often put strain on the available housing stock, driving up rental prices and making it increasingly difficult for residents to find affordable housing.

In London, a wave of immigration contributed heavily to a sharp 7% increase in rental costs during 2023.

This housing crunch not only exacerbates existing inequalities but also threatens the social fabric of communities, as locals are pushed to the outskirts of their own neighbourhoods. This is a problem that has been notably aggravated by the rise of companies like Airbnb, which have made it more lucrative to convert properties into short term rental accommodation catering to tourists and the digital nomad population, rather than local residents.

This not only reduces the housing supply available to permanent residents but also contributes to the alienation of residential neighbourhoods, transforming them into transient spaces that lack community spirit.

3/ Increased cost of living

As the cost of living rises dramatically across the Western world, digital nomads find themselves drawn to destinations where living costs are markedly more affordable. However, these nomadic workers may be inadvertently triggering an increased cost of living in the communities they move to.

With more spending power than the local residents, it has been suggested (and also disputed) that the presence of a large digital nomad population often coincides with inflated prices for goods and services.

This increased cost of living places a significant burden on locals, who may be left unable to afford basic amenities in their own neighbourhoods. What unfolds is a tale of two economies, where on the one hand digital nomads benefit from the gentrification of an area, while the local population grapples with inflation and diminished purchasing power.

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4/ Putting strain on local infrastructure

Digital nomad overpopulation can place significant strain on local infrastructure. Public transport networks, designed to accommodate the needs of the local population, may struggle to cope with the increased demand from the digital nomad population, leading to service delays, overcrowding and congestion.

Additionally, an increase in the number of vehicles owned or rented by digital nomads may increase traffic congestion and pollution levels, further burdening transportation infrastructure.

Healthcare is another example of where local infrastructure can take a significant hit from digital nomad overpopulation. This is particularly relevant in smaller or remote communities, which may face challenges in meeting the healthcare needs of both residents and digital nomads.

Increased patient loads can overwhelm healthcare providers, leading to longer waiting times, reduced access to medical services, and potential compromises in the quality of care. Emergency response services may also come under strain as they struggle to cope with the increased population density and resource demands. This may be especially true in countries that are renowned as medical tourism destinations.

5/ Not contributing to the local economy

Despite living in local communities and spending money on local commodities, digital nomads often derive their incomes from their home countries while remaining exempt from local taxes.

The lack of economic benefits derived from digital nomads makes their relationship one-sided: local and national governments support digital nomads through public spending (on infrastructure, healthcare, public services and so on), while many digital nomads do not make a meaningful contribution in return.

Digital nomads may therefore be seen as an economic burden. This feeling can be especially acute if digital nomads are deriving salaries several times greater than the local average salary, giving them significantly higher spending power without contributing to the economic development of their region.

6/ Loss of local authenticity

As destinations become popular among digital nomads, they face the risk of losing the authenticity and charm that initially attracted both expats and residents.

Digital nomad overpopulation often forces neighbourhoods to undergo rapid transformation to cater to lifestyles of the new demographic. Local businesses may prioritise serving the needs of digital nomads over the local population, leading to an increase in digital nomad-oriented facilities such as coworking spaces, boutique hotels, and international cuisine restaurants, at the detriment of resources oriented towards the local community.

The commercialisation of local culture can further this sense of lost authenticity, as traditional crafts, festivities, and customs are commodified and marketed to appeal to a global audience. Cultural heritage sites may also become overrun with tourists and digital nomads, detracting from their significance and spiritual value.

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Destinations taking action against digital nomad overpopulation

Several destinations have started implementing measures to help minimise the negative impacts of digital nomad overpopulation. These measures are mostly concerned with strain on local resources, infrastructure, and housing.

Here are some of the destinations that are starting to regulate digital nomads:

Barcelona, Spain

Despite being one of the world’s friendliest cities, and one of the most popular destinations worldwide for digital nomads, Barcelona has a strained relationship with its new residents – if you’re walking through certain parts of the city, you may still see graffiti telling visitors to van a casa (‘go home’).

While tourism has long been a vital part of Barcelona’s economy, contributing significantly to its cultural vibrancy and prosperity, it has also placed immense pressure on infrastructure, housing, and the daily lives of residents. Locals have expressed concerns about overcrowding, rising rents driven by the demand for short-term accommodation, and the commercialisation of neighbourhoods, leading to a sense of displacement and loss of community identity.

In response to local frustration, Barcelona has implemented stringent regulations on short-term rentals through platforms like Airbnb. These restrictions include forcing property owners to obtain a special licence from the city government to operate short-term rentals, limitations on rental periods and fines for those who do not follow the rules. This is aimed at ensuring that rental properties aren’t being taken off the market for long-term residents.

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Amsterdam, Netherlands

Around 5 million international tourists flock to Amsterdam every year. This regularly overwhelms the city’s infrastructure, which is built to cope with a population of just 800,000. Now that digital nomads have entered the picture, Amsterdam claims to be reaching breaking point.

Like Barcelona, Amsterdam has seen a surge in short-term rentals as digital nomads settle in the city. This has contributed to housing shortages and increased rental prices, as well as strains on local infrastructure.

As well as cracking down on tourists with their controversial Stay Away campaign, Amsterdam has also introduced measures to limit the number of days per year that properties can be rented out to foreign nationals and cracked down on illegal short-term rentals. Hosts can now only rent out their properties for a maximum of 30 nights per year. Anything above this will require a permit.

Lisbon, Portugal

Portugal was the most popular destination among digital nomads in 2023 according to Flatio’s Digital Nomad Report, attracting 27.1% of all digital nomad visits.

As such, the Portuguese capital of Lisbon has experienced a boom in short-term rentals, particularly in popular neighbourhoods like Alfama and Bairro Alto. Lisbon is currently home to around 16,000 digital nomads, all of whom are competing for the same resources as locals.

There has been much public outcry against digital nomads from Lisbon locals, who feel that the rapid influx has led to the over-commercialisation of local neighbourhoods. In response, the city has introduced regulations to curb the conversion of residential properties into short-term rentals, aiming to preserve housing in certain districts for local residents only.

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New York City, USA

The most recent addition to the list of cities cracking down on short term rentals is New York, which has also made the move to restrict short-term rentals.

The city government has argued that sites like Airbnb were making it too easy for tourists and digital nomads to rent apartments for short periods in one of the world’s most expensive cities, which has led New Yorkers to complain of being priced out of their own city.

With the new rules now in place, homeowners will be prohibited from renting out entire homes to guests for stays under 30 days, while short-term rentals will only be allowed for part of a home with up to two guests lodging with a host.

The policy is designed to disincentivise landlords from renting their homes to medium-term residents while undercutting the New York rental market. Digital nomads looking to stay in New York will therefore need to find a rental for over 30 days if they’re looking for the comfort of an entire property.

Bali, Indonesia

As an immensely popular destination for expats, the Indonesian island of Bali is already taking steps to stem the flow of digital nomads.

Bali has a strict tax policy when it comes to working in the country, with working permits known to be very expensive, and in 2020 the government of Bali implemented policies intended to crack down on digital nomads working without the proper permits.

Bali bolstered this move in 2023 by creating two task forces to monitor and enforce appropriate behaviour among tourists and digital nomads – including stricter rules and harsher sentencing for crimes such as illegal driving, breaking visa rules or disrespecting holy sites.

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Which Countries Are Most Affected By Digital Nomad Overpopulation?

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The impact of digital nomad overpopulation on local communities

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