California’s population declines, again, as state grapples with housing crisis(theguardian.com)
theguardian.com
California’s population declines, again, as state grapples with housing crisis
https://www.theguardian.com/us-news/2023/may/03/california-population-decline-states
90 comments
At all governmental levels, California is fully mis-managed partly because management no longer has to do with outcomes beneficial to residents of California. And the question is as more reasonable people who expect reasonable management of the state leave (I plan to be one), how will the state ever turn around when voters continue to vote for management that does not manage in their best interests?
Where are they moving to? Because CoL isn't everything. Quality of life is a real issue. Move to TX and you get an even worse run public utilities and anti-woke politicians run amok. Worse with FL.
The problem is not endemic to CA. It's literally everywhere because everyone who can afford it has decided to seek rent instead of profits.
The problem is not endemic to CA. It's literally everywhere because everyone who can afford it has decided to seek rent instead of profits.
> From my understanding, California leadership at all levels of government has had only one lever the past couple decades, and that lever can only be pushed one direction.
Your understanding is wrong, and there’s probably no place that this is more obvious than housing.
Your understanding is wrong, and there’s probably no place that this is more obvious than housing.
It'll be interesting to see if any of the reparations stuff ends up happening.
It's effectively impossible as there is no money to pay for it and CA can't print money. But for sure, if it does, the exodus will likely increase. That management thinks that you can spend dramatically more than you have when you are already broke is quite remarkable.
A lot of this is uncannily familiar to anyone who's read Atlas Shrugged.
My partner is finally on board with leaving this year. I've lived here most of my life and they were born and raised here in CA. Sad to leave but the state keeps telling us it doesn't want us here anymore. High CoL that just keeps going up and crazy policies and regulations.
That’s exactly how I feel about Oregon. It’s so frustrating to look at what was once a beautiful state being ruined by politicians that would prefer more homeless individuals over me.
I'm a lifelong Californian, I love California, I can't imagine living in any other state, and I'm continuously baffled by these hand-wringing articles.
Why would I be unhappy that people who want to leave California are leaving California? I'll have sympathy for anyone who loves the state and is moving because they can no longer afford it, but if they'd rather live in Nevada or Texas or Washington then then it's a win-win as far as I'm concerned.
Why would I be unhappy that people who want to leave California are leaving California? I'll have sympathy for anyone who loves the state and is moving because they can no longer afford it, but if they'd rather live in Nevada or Texas or Washington then then it's a win-win as far as I'm concerned.
I am on the fence - love CA jobs, people and weather, but hate prop13 and the incestuous ruling political class that claims to be progressive/left but are just corporatist and protect their own above anything else (not that it's much different in many other states - they're just more overt about it).
The challenge is that the time to leave CA was at the beginning of the pandemic or earlier, and now housing prices / rent everywhere else have gone up way more than CA.
The challenge is that the time to leave CA was at the beginning of the pandemic or earlier, and now housing prices / rent everywhere else have gone up way more than CA.
People leaving is a sign that policies aren't working well for everyone.
For each person that leaves, typically that means many more whose quality of life has declined and are considering leaving.
If California works for you, then great, you have no obligation to be unhappy on behalf of others.
For each person that leaves, typically that means many more whose quality of life has declined and are considering leaving.
If California works for you, then great, you have no obligation to be unhappy on behalf of others.
I daresay that there are no policies that work well for everyone.
To rephrase: policies are playing out badly enough that the equilibrium has shifted to a net outflow.
That doesn't mean it's bad for everyone or that it was great for everyone before. But such a shift in actual people movements over (state) borders is one of the most powerful political indicators that exists.
Leaders losing followers, companies losing employees, countries losing citizens, and clubs losing members are all pretty negative signs. Not absolutely bad in all cases, but certainly worth concern.
That doesn't mean it's bad for everyone or that it was great for everyone before. But such a shift in actual people movements over (state) borders is one of the most powerful political indicators that exists.
Leaders losing followers, companies losing employees, countries losing citizens, and clubs losing members are all pretty negative signs. Not absolutely bad in all cases, but certainly worth concern.
Please stick with the dystopian hellhole memes and let the technolocusts find better fields.
It seems like much of this comes from the shift to remote work. Many Californians didn't really want to be here but moved in order to be part of the biggest commercial developments of the day. Now a California location is no longer necessarily forced on people. This could be good for everyone.
Some number of us who left would've preferred to continue living there, but it can be difficult to justify that if you're trying to not spend a majority of your income on housing.
In my case, as a remote worker it was hard to say no to a house twice the size of my old apartment for a mortgage payment half of what my rent was. The only tradeoff was more rainy days, since I moved to a metro in the PNW.
Had housing prices been more reasonable in the parts of California where people want to live, I wouldn't have had any issue staying. It was nice.
In my case, as a remote worker it was hard to say no to a house twice the size of my old apartment for a mortgage payment half of what my rent was. The only tradeoff was more rainy days, since I moved to a metro in the PNW.
Had housing prices been more reasonable in the parts of California where people want to live, I wouldn't have had any issue staying. It was nice.
Maybe it's rose colored glasses, but 2013 Bay Area was so much nicer than 2023 Bay Area, and the cost of living, while high, wasn't nonsensical like now. I was glad to move in, and glad to move out.
> It seems like much of this comes from the shift to remote work.
A lot of it, as in 2020, came from the reduction in immigration to the United States (2020 and 2021 were about 300k below any time in the prior decade, due to pandemic-related restrictions.
California has had negative net domestic (within the US) migration offset by international immigration, for which it is a major destination for both employment- and family-based immigration, for quite a long time prior to 2020.
Another big chunk is retirements (which in 2020 and 2021 were accelerated by the pandemic); taking savings from working in California and retiring out of state to a lower CoL area has been common for a long time.
A lot of it, as in 2020, came from the reduction in immigration to the United States (2020 and 2021 were about 300k below any time in the prior decade, due to pandemic-related restrictions.
California has had negative net domestic (within the US) migration offset by international immigration, for which it is a major destination for both employment- and family-based immigration, for quite a long time prior to 2020.
Another big chunk is retirements (which in 2020 and 2021 were accelerated by the pandemic); taking savings from working in California and retiring out of state to a lower CoL area has been common for a long time.
That doesn't make any sense. You really think remote tech jobs are the leading cause of this population decline in a state of 39 million people?
Remote work (which isn’t just tech, though perhaps more in tech) is a factor, both in people being able to move out and in people not moving in.
Probably an exaggeration to call it the leading cause, though, curtailment of immigration and accelerated retirements compounding the existing trend of taking retirement savings to move somewhere lower CoL are big factors.
Probably an exaggeration to call it the leading cause, though, curtailment of immigration and accelerated retirements compounding the existing trend of taking retirement savings to move somewhere lower CoL are big factors.
The full report from the Department of Finance is here:
https://dof.ca.gov/wp-content/uploads/sites/352/Forecasting/...
Unsurprisingly, the change is not even. Central agricultural areas are still moving up in population, and large costal cities are down. Los Angeles lost 1% of its population last year.
https://dof.ca.gov/wp-content/uploads/sites/352/Forecasting/...
Unsurprisingly, the change is not even. Central agricultural areas are still moving up in population, and large costal cities are down. Los Angeles lost 1% of its population last year.
Wonder how long before CA starts trying to tax leaving the state?
That was proposed a few years ago, but i dont have a link.
What would a tax like that even look like?
Thanks!
Based on this, it seems like "exit tax" is a bit of a misnomer -- the proposal was just to tax people even after they've left California, but they would have paid the tax even if they hadn't left.
Based on this, it seems like "exit tax" is a bit of a misnomer -- the proposal was just to tax people even after they've left California, but they would have paid the tax even if they hadn't left.
I assume it would be the state trying to claw back investment or benefits they gave to a resident.
They've tried this twice already, although neither bill went through:
https://scocablog.com/exit-taxes-in-california-not-so-fast/
Especially egregious was a 10-year look back so even if you left years before the taxes would take effect, they'd still fleece you.
The way California's finances are going, and the way the state is degenerating, it's only a matter of time until they get serious and pass some form of this. It probably won't pass legal muster, but they'll do it anyway and spend years fighting it in courts.
https://scocablog.com/exit-taxes-in-california-not-so-fast/
Especially egregious was a 10-year look back so even if you left years before the taxes would take effect, they'd still fleece you.
The way California's finances are going, and the way the state is degenerating, it's only a matter of time until they get serious and pass some form of this. It probably won't pass legal muster, but they'll do it anyway and spend years fighting it in courts.
Not quite the same, but you may own CA taxes on stock options if you earned them while living in CA even if you don't live there when you cash them in.
https://www.upstartwealth.com/blog/will-you-owe-ca-tax-after...
https://www.upstartwealth.com/blog/will-you-owe-ca-tax-after...
"California’s population has continued to plummet, according to a new state report, underscoring a continuing trend as the state scrambles to increase its housing stock and ease a cost of living crisis."
If people are leaving, shouldn't that slow the cost of living increases and/or make the existing housing supply closer to being sufficient?
If people are leaving, shouldn't that slow the cost of living increases and/or make the existing housing supply closer to being sufficient?
Not enough to change the broad shape of the problem, because despite the word “plummet” the number of people leaving in net is not big enoughbto make much difference to the huge supply problem. The 2021 drop was less than half a percent of population.
Also, when you look at both sides of migration, the in-migrants are richer and less price sensitive than the out-migrants, so, they put disproportionate pressure on prices for the remaining non-rich, mitigating the demand effects of net out-migration.
Also, when you look at both sides of migration, the in-migrants are richer and less price sensitive than the out-migrants, so, they put disproportionate pressure on prices for the remaining non-rich, mitigating the demand effects of net out-migration.
Vacant homes held as investment/ properties built for the wrong market (for example: high-end, luxury, when demand warrants multi-family, middle income) can unfortunately keep general availability low and prices high.
It has at least in the Bay Area. Rent and Home prices in many places have been flat.
Most people leaving probably aren’t homeowners.
A state is not an economic business entity. It does not have to keep growing and growing. What it needs to do is serve the people who live there in way that align with tax revenue.
This dick-swinging my state is growing bigger than your state. Is unnecessary theatre and media fodder. Are the people being served - increases or decreases are irrelevant - or not? Let's focus on what matters for a change.
This dick-swinging my state is growing bigger than your state. Is unnecessary theatre and media fodder. Are the people being served - increases or decreases are irrelevant - or not? Let's focus on what matters for a change.
It doesn't have to grow. But it definitely shows that people don't want to stay there.
Or maybe it shows some people cannot afford to stay there.
Clearly the fact that people are leaving in such large numbers suggests that it isn't serving the current population very well.
India must be the most amazing country on Earth.
People leave India in large numbers also. Population growth due to sex is a different category.
Maybe not. Maybe the leaving side has been what it's always been. Maybe there's no one moving in? And now the net is a loss?
Yes, could be for the same reason. Or it could be just the way things are. Given the USA's population is stagnent, perhaps CA isn't all that unique? Or is also an immigration issue (which "economic growth" is often used as a false proxy for).
Nonetheless, populations do decline. To make it sound like a "failing" - as if it were a business - is where I take issue.
Yes, could be for the same reason. Or it could be just the way things are. Given the USA's population is stagnent, perhaps CA isn't all that unique? Or is also an immigration issue (which "economic growth" is often used as a false proxy for).
Nonetheless, populations do decline. To make it sound like a "failing" - as if it were a business - is where I take issue.
Mostly it's out of control housing prices.
But the trendline outside of CA is even worse lately.
When a state increases its expenses every year, it has two choices, grow the tax base or rase the tax rates.
California is already one of the most taxed states and greater increases in tax rates will likely shrink its tax base.
California is already one of the most taxed states and greater increases in tax rates will likely shrink its tax base.
The overall tax burden in California ranks 12th among the states, between Iowa and Nebraska. It is not a particularly high-tax state. The cost-of-living issues arise from the lack of housing. It is still a regulatory burden—the lack of housing is caused by bad local government—but it is not a tax as such.
Do you have a source on the tax burden? I’m living in Massachusetts right now (notoriously called Taxachusetts by some here), and CA sales and income tax rates look to be about 50% and double the rates here, respectively. It looks like property taxes are about 50% higher here, but income and sales tax is way bigger than property tax in my experience. Not to mention California’s notorious gas tax.
Massachusetts has a much more noticeable personal income tax because it is not progressive, everyone loses 5% off their paycheck. In California a household with 2 children for example won't pay 5% until their income is > $200k.
I'm not saying that's inaccurate but figuring out tax burden - because of the distinction between rates and what's collected, the state and localities and the way benefits are allocated (among many other things) can be really confusing.
I never said it was the top. being 12th out of 50 does make it a high tax state. Also, the high cost of living is not just the lack of housing. There is a massive regulatory burden on all aspects of california life.
Given that people make much more money in California than in Iowa or Nebraska, that is still a lot of taxes coming in.
Yes, but how is that related to the OP's Laffer Curve bullshit? High-income and therefore progressively taxed households are the only people still migrating in to California. Migration out of California has everything to do with cost of housing and nothing to do with taxation. The lower-income households that flee the state for Texas, the top destination, are more taxed in Texas than they were in California, but the people migrate anyway because the housing cost difference is larger than the tax difference.
Yes I agree. But when people say California is the most heavily taxed state in the nation, its usually a weasel interpretation where they mean California's pay the the most taxes not related to a percentage of their higher incomes. The real killer in California is simply the rent is too high (even food costs are pretty reasonable compared to other states).
Surely one can at least argue that it matters if people are voting with their feet? But on the other hand, it's not like the state is being brought to its knees. This decline of 138k people is minuscule, roughly a third of a percent. Should the trend continue, California will still, with 25 million people, be elbows deep in residents a hundred years from now.
Ca has a current deficit of at least 30 billion dollars with unfounded long term liabilities at as high as 77k per household. If the populace declined to 25 million, that number goes to 123k per household in current dollars which would be unserviceable.
To some degree isn't this people voting with their feet? A U.S. state does a lot of things in serving people, people are going to look at all of that collectively to decide if those decisions are in general good or bad.
I don't think collective decisions like this are the last word and it's probably hard to use the de-population to make some sort of judgement on any particular policy or aspect of California but I also wouldn't say it's impossible to draw conclusions.
I don't think collective decisions like this are the last word and it's probably hard to use the de-population to make some sort of judgement on any particular policy or aspect of California but I also wouldn't say it's impossible to draw conclusions.
Yes. But then say that. Using a business paradigm for a government entity, at least in this case, is a false god. Why go there?
Maybe CA is as big as it can be? God knows the droughts in the south of the state raise red flags about agriculture, population, etc. What's next? "CA grew and then it didn't rain at all"?
Maybe CA is as big as it can be? God knows the droughts in the south of the state raise red flags about agriculture, population, etc. What's next? "CA grew and then it didn't rain at all"?
California has enormous pension obligations at every level of government to the tune of tens of thousands of dollars per household (maybe 77k!?). It will not meet that liability with a declining population, particularly if corporations and the wealthy do the leaving. It can’t legally shift money around, it’s all been allocated by the voters. The only option is to increase taxes, and probably by a lot, which would push more people out of the state given it already has the highest taxation in the country. If I were Ca, I’d be building as much new housing as I could as quickly as possible. Hopefully, declining housing costs (against inflation if nothing else) would make it a wash for future residents.
California is such a beautiful place to visit, but I’m curious why anyone chooses to stay when there are so many other great cities you can move to for a fraction of the cost. I understand that moving is expensive and difficult, but you’d think it would be worth the effort to better your living situation.
I like it here. I like other places too but I like it here more. And, I think it’s worth staying and advocating for change that would mean other people who like it here could stay too if they wanted.
Same. I love it here but am frustrated at the dysfunction of the Bay Area. Making a good salary insulates me somewhat to the CoL issues.
Camping in the Sierras is awesome and as a pilot flying in California is a dream. Mission is gritty but there is great food around. It seems to have stabilized.
The kind of stuff I get to work at at Apple is insanely cool and commuting 280 is great.
Still have a good friend group; albeit a bit smaller since folks have moved away.
Camping in the Sierras is awesome and as a pilot flying in California is a dream. Mission is gritty but there is great food around. It seems to have stabilized.
The kind of stuff I get to work at at Apple is insanely cool and commuting 280 is great.
Still have a good friend group; albeit a bit smaller since folks have moved away.
I’ve been here for a few years. It’s been great as a software engineer that’s single and able to afford rent. But I’d never join the housing rat race. I could stick around at Google and make enough to afford some place. But I’d rather just live somewhere else.
For individuals who aren't price sensitive, the juice isn't worth the squeeze because rent hikes outside the state have been higher. I might save a few hundred dollars a month. It doesn't meaningfully change the financial situation, and then one loses access to the weather, beaches, etc.
There are other parts of the country that have beaches. To each their own of course, but the salary to rent ratio seems better to me in many other places. I own a home so rent increases aren’t an issue I deal with directly, but I see your point there.
The article claims it's too early to cry 'Cal-Exit!'
But even little old Iowa is growing. If the juggernaut that is California is shrinking, then it's definitely time to decide something is very wrong.
But even little old Iowa is growing. If the juggernaut that is California is shrinking, then it's definitely time to decide something is very wrong.
What's wrong with people moving from California to Iowa?
I think they're saying if even "shithole" Iowa is growing but California ain't, there's a major problem with California. Not that moving to Iowa is a bad idea.
It’s too crowded so no one goes there anymore. California just over grew the last 80 years and now it is leveling off. Not really mysterious, not an exodus of people that it will get it under 39 million anytime soon, let alone to a much more realistic 30 million.
I am from the Northeast and want to move back. the whole state feels like a "lower-world" country than what I was used to growing up.
I think this is a larger trend of "blue states" demographics shifting to red states. This has broad political implications - there was a report I read a while back that stated is why there was no "red wave" in 2022 elections.
And this trend will continue.
And this trend will continue.
> “Affordability is not miraculously better, but, on the other hand, other places outside California are now equally unaffordable,” he said.
Problem solved.
Problem solved.
If it were only true!
Houses around here are under $1M, often half that amount. Big houses.
It's a University town as well. Smaller places are even cheaper.
Houses around here are under $1M, often half that amount. Big houses.
It's a University town as well. Smaller places are even cheaper.
This really means nothing without a reference to the prevailing local wages, though.
Is there such a thing as 'local wages' any more?
Of course. It's how much people who live there get paid.
Let me explain. That doesn't have much to do with a silicon valley remote employee's ability to buy a house here.
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seanw444(2)
It's going to get a lot more California before it gets more normal, buckle up :)