The Real Out-Migration

Housing, not taxes, are forcing people out of California

by Brian Leubitz

There is much ado about the “job creators” fleeing California because of the high taxes. These uber wealthy are leaving, so we are told, because the high income taxes just aren’t worth it.

Except that isn’t true at all. In a new analysis by chief economist Jed Kolko, housing is the culprit:

Here are the basic facts. In 2011, 562,000 people left California, and 468,000 came, according to the Census’s American Community Survey. That means 120 people moved out of California for every 100 people who moved in. Out-migration reached its peak in 2005, when 160 people moved out of California for every 100 people who moved in. The California exodus rose with the housing bubble and subsided in the recession. Lower home values in 2008-2011 made California more affordable, encouraging in-migration and discouraging out-migration, as well as pushing some California borrowers underwater, further discouraging out-migration. (Trulia blog)

The graph on the right isn’t the only one that makes the case clear. If we are to really continue our growth, we must address the housing crunch that is going on, especially along the coast. That isn’t accomplished through slashing services and budgets, but rather working to create new affordable housing solutions and ways for young families to stay here in California, where most would rather stay.

Thus, the slashing the government approach that the Legislative Republicans, far from being the panacea they claim, would make the situation worse as affordable housing money continues to dry up. Housing must continue to be a key focus of both our state and local governments.

17 thoughts on “The Real Out-Migration”

  1. what are these “affordable housing” solutions. More government spending and taxes? LOL.

    Here in the real world, we know that there was a real estate bubble in California because of big government zoning policies that make it impossible in many places to either


    B. Build in certain areas that are restricted

    Even Krugman admits the truth.

    For this much is true about Texas: It has, for many decades, had much faster population growth than the rest of America – about twice as fast since 1990. Several factors underlie this rapid population growth: a high birth rate, immigration from Mexico, and inward migration of Americans from other states, who are attracted to Texas by its warm weather and low cost of living, low housing costs in particular.

    And just to be clear, there’s nothing wrong with a low cost of living. In particular, there’s a good case to be made that zoning policies in many states unnecessarily restrict the supply of housing, and that this is one area where Texas does in fact do something right.

    and here

  2. a lot of those leaving CA during the bubble are people cashing in on their undertaxed, overinflated equity.

  3. from the Washington Monthly:

    ‘…The financial crisis of 2008 and its painful aftermath, which we’re still dealing with, were a huge slap in the face for free-market fundamentalists. Circa 2005, the usual suspects – conservative publications, analysts at right-wing think tanks like the American Enterprise Institute and the Cato Institute, and so on – insisted that deregulated financial markets were doing just fine, and dismissed warnings about a housing bubble as liberal whining. Then the nonexistent bubble burst, and the financial system proved dangerously fragile; only huge government bailouts prevented a total collapse.

    Instead of learning from this experience, however, many on the right have chosen to rewrite history. Back then, they thought things were great, and their only complaint was that the government was getting in the way of even more mortgage lending; now they claim that government policies, somehow dictated by liberals even though the G.O.P. controlled both Congress and the White House, were promoting excessive borrowing and causing all the problems.

    Every piece of this revisionist history has been refuted in detail. No, the government didn’t force banks to lend to Those People; no, Fannie Mae and Freddie Mac didn’t cause the housing bubble (they were doing relatively little lending during the peak bubble years); no, government-sponsored lenders weren’t responsible for the surge in risky mortgages (private mortgage issuers accounted for the vast majority of the riskiest loans).

    But the zombie keeps shambling on – and here’s Mr. Rubio Tuesday night: “This idea – that our problems were caused by a government that was too small – it’s just not true. In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies.” Yep, it’s the full zombie.

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