Posted on 02/13/2019 1:21:37 PM PST by Red Badger
A growing number of Californians are contemplating moving the state due to the sky-high cost of living, with sentiment highest among millennials, according to a new study.
Fifty-three percent say they are considering fleeing, representing a jump over the 49 percent a year ago.
The poll conducted by Edelman Intelligence found the chief reason for dissatisfaction isn't wildfires or earthquakes but housing cost and availability.
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LOS ANGELES — A growing number of Californians are contemplating moving from the state — and not due to wildfires or earthquakes but the sky-high cost of living, according to a survey released Wednesday.
The online survey, conducted last month by Edelman Intelligence, found that 53 percent of Californians surveyed are considering fleeing, representing a jump over the 49 percent polled a year ago. The desire to exit the nation's most populous state was highest among millennials, the survey noted.
"California is a great, great place if you're young and ambitious and daddy's paying the rent," said Joel Kotkin, a presidential fellow in Urban Futures at Chapman University in Orange, California. "It's similar to New York with the same dynamic, and maybe more of it."
Kotkin, who has researched California demographic and economic trends for decades, said he's astounded when he asks his Chapman students whether they think they'll be in the state in 10 years. "I would say the majority would say 'no,' — and many grew up in California," he said.
"There's no doubt that California's economy, for all of its strengths when it comes to innovation and creating these industries that people want to be part of, is struggling with high costs," said Aaron Terrazas, a senior economist with online real estate site Zillow. "Costs have gotten way ahead of incomes in California, and that's making a lot of people think about whether it's worth the hurdles."
According to Edelman, 63 percent of millennials in the 2019 survey indicated they were considering a move from sunny California. The chief reason for dissatisfaction: housing.
In fact, 60 percent of millennials surveyed cited housing cost and availability when asked in general what reasons would make them leave California. That was slightly higher than the general population (55 percent), although sentiment among renters topped the survey with 65 percent citing housing factors as a reason to leave.
Californians believe housing costs are four times more threatening to the state's economy than high health costs. Residents also consider crime and security as a top-three concern.
Terrazas said millennials in California who are "tired of renting and looking to settle down and buy a home are finding it's often out of reach for them." He said this is especially the case in coastal job centers of the state, whether Los Angeles County or the San Francisco Bay Area.
"California just doesn't strike them as reasonable," the economist said. "The state has consistently seen much faster home value appreciation than most of the country, and the same goes for rent until about two years ago. Rents have begun to slow down, ... although they remain at high levels."
Terrazas said Southern California has high housing costs and on average lower incomes than Northern California. "In some ways, Southern California is in much dire straits," he said.
Even with higher average incomes in Silicon Valley, though, he said homebuyers now must spent about half of their pretax incomes on a monthly mortgage for a median home. The median home in the Silicon Valley market topped $1.2 million at the end of 2018, according to Zillow data.
Statewide, the median home value in California was $547,400 at the end of 2018, while the U.S. median home value was $223,900. By comparison, the median home value in New York state stood at $289,000 and $681,500 in New York City; New Jersey was $324,700.
The Edelman survey found 47 percent of Californians are considering moving out of the state in the next five years. Again, it found the rates among millennials were higher with 55 percent of them contemplating the move. And 57 percent of Californians with kids under 18 also were considering packing up and leaving in the next five years.
Chapman's Kotkin believes the next wave of discontent in California won't necessarily be focused on housing costs but taxes.
"Taxes are a real killer if you're upper middle class and whether you're a younger person trying to buy a house or you just want to be able to spend what you make," said Kotkin. "There's also concern among people looking to retire and having their income taxed into oblivion."
At 12.3 percent, California led the 50 states in 2018 with the highest top marginal tax rate, according to the Federation of Tax Administrators. And that doesn't include an additional 1-percent surcharge for those Californians with incomes of $1 million or more.
"The tax bill made it worse," Kotkin said, pointing out that the federal tax changes means deductions for state, local and property taxes now get capped at $10,000. "State taxes have become a significant factor now. We're getting into a situation where the middle class in California really can't hack it."
Overall, the Edelman survey involved a total of 1,900 California residents and was conducted Jan. 4 to Jan. 20. It said results were weighted to the Census to be representative of the state's adult population.
A report from California's Legislative Analyst's Office last year indicated Texas, Arizona, Oregon and Nevada are popular destinations for relocating Californians. It also found families with kids and those Californians with only a high school education were most likely to flee to lower cost states than college educated residents.
Finally, the survey found more than 60 percent of residents feel that the best days of living in California are behind instead of ahead. And a large number of residents are "ambivalent" toward tech as an engine of prosperity, the survey said.
Skateboards make racket as hundreds flee California.
OH GOD they’re coming to Texas along with their political views!!!! We are so screwed!
If we didn’t need to stay close to raise our granddaughter we’d be gone.
Texan Conservatives should buy a billboard along I-10 with the message:
“IF YOU ARE MOVING FROM CALIFORNIA TO TEXAS, PLEASE LEAVE YOUR VOTING HABITS AT THE BORDER.”
My son is moving his company and his family from Mountain View to Reno. I’m waiting to hear if they made a deal on a home today.
We do not need anymore of them in AZ either....Time for another wall.
The sad thing is that as these people flee they have a tendency to continue voting in the manner that caused them to flee.
Keep ‘em. They f#@c#d up their own state they are doing it to Arizona now.
Millennials are more likely to trend right as they get older and wiser, they might have been indoctrinated in school but they are fast learners when hit with reality.
What’s that old saw about insanity?
Doing the same thing over and over again and expecting a different result each time?....................
If you are not conservative … stay out of Arizona. If you are liberal, Oregon or Washington state may be far more welcoming
Problem is, everywhere they go they want the same cradle to grave benefits from government and end up making little California’s. Just look at Colorado.
“are contemplating moving the state...”
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I’d like to see that. Good ol CNBC. /s
Yep. Zero sense of causality.
“Just look at Colorado.”
Dude, Colorado is, like, WAYYY too far away for me to see from my, like home, man...
Welsome to the rest of the country, guys
Please California politics stay in California
You can run but you can’t hide. They will flee, and vote to make their new homes just like California.
Coming to turn YOUR state blue.
I imagine the final decade or so of my life is going to be no fun whatsoever.
Yep, and they are already over the edge politically.
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