Are Californians Really Leaving for More Affordable States?
Senators disagree over the facts: ‘It’s a fiction about all of the people leaving California.’ Or is it?
By Katy Grimes, May 30, 2019 6:53 pm
During the Senate debate over Sen. Maria Elena Durazo’s rent control and tenant unionizing bill Monday, Sen. Jeff Stone (R-Temecula) delivered a floor speech about how SB 529 was just another bill squeezing California business owners and landlords, and forcing them out of the state. Through more rent control and anti-landlord regulations, “They are going to go where they can to make a profit,” he said. “I know it’s a dirty word to many in the Senate… profit.”
“It’s a fiction about all of the people leaving California”
“So many entrepreneurs have moved out of the state,” Stone said. “This is just another reason for landlords big and small to say ‘enough is enough… let us manage our own properties.'”
Sen. Hannah Beth Jackson (D-Santa Barbara) described herself, as a “reluctant landlord,” and said, “I am frankly tired of hearing how people in the state of California are leaving.” Jackson said when people are stuck in legendary traffic on the 405 in Los Angeles, or the 101 in Santa Barbara County, “people aren’t leaving the state. They are going from place to place.”
She warned that the bill capping rents and allowing tenants to organize, was necessary because “there are far too few units,” while Stone warned that other states are attracting California landlords and entrepreneurs because of bills like SB 529. He said apartment owners and builders are looking to divest from California because of the onerous building process. “Other states take weeks, not months.”
“It’s a fiction we keep hearing about all of these people leaving California,” Jackson said. “We’ve still got more than enough to take care of the economy and keep it going in a robust fashion.”
Not So Fast
Sen. Mike Morrell (R-Rancho Cucamonga), who owns a property management business, said he and his wife know many property owners who “are fleeing the state. They are going for states that have a lot more economic freedom, and not constraints, which makes it difficult to be able to compete.”
“They are going for states that have a lot more economic freedom”
Morrell said he opposed SB 529 because he is “a believer in property rights.” Morrell said he was given a book by the Hoover Institution called “How Money Walks: How $2 Trillion Moved Between the States, and Why It Matters.”
“Between 1995 and 2010, millions of Americans moved between the states, taking with them over $2 trillion in adjusted gross incomes,” author Travis Brown says. “Two trillion dollars is equivalent to the GDP of California, the ninth largest in the world. It’s a lot of money. Some states, like Florida, saw tremendous gains ($86.4 billion), while others, like New York, experienced massive losses ($58.6 billion). People moved, and they took their working wealth with them.”
“Money—and people—moved from high-tax states to low-tax ones. And the tax that seemed to matter the most? The personal income tax. The states with no income taxes gained the greatest wealth, while the states with the highest income taxes lost the most. Why does this matter? Because the robust presence of working wealth is the leading indicator of economic health.”
According to “How Money Walks,” California lost $58.63 billion in annual adjusted gross income.
“About 130,000 more residents left California for other states last year than came here,” the Sacramento Bee reported. “California has seen more than 15 consecutive years of net resident losses to other states.”
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Went to the Rockies game today….counted at LEAST a dozen LARGE multi-family housing units being constructed along I-25 & Santa Fe Drive…. plus many more single family housing developments are going up all over town….
And every 5-7th car has an out-of-state plate….
Whether or not that’s a good thing in the long run remains to be seen but there’s a MASSIVE immigration happening here…
Gov. Polis and the Boulder liberals are doing their best to kill that economic engine by structurally reforming CO to be East California, using SF as their model, but that remains to play out….
What’s better than rent control? A tax on vacant land and unoccupied buildings. While rent control makes it less attractive to supply housing or business accommodation, a vacancy tax makes it less attractive NOT to! A vacancy tax of $X/week makes it $X/week more expensive to fail to get a tenant, and thereby REDUCES, by $X/week, the minimum rent that will persuade the owner to accept a tenant.
Furthermore, avoidance of the vacancy tax would initiate economic activity, which would expand the bases of other taxes, allowing their rates to be reduced, so that the rest of us would pay LESS tax!
Hee hee. Yeah, the politicians will raise one tax but offset it with lower taxes elsewhere. Happens all the time, right?
Schhhhhh.
Sorry, comrade. Won’t hold up to legal scrutiny. Maybe in your homeland of Russia
Thanks for all you do Katy. We were life-long California residents and escaped the State last summer. Life here in Colorado Springs is glorious! Gas averages $.90 per gallon less and even though our new home is 1,200 sf larger, our utility bills are averaging $140/month lower. An added bonus: we can get all the grocery bags we need and aren’t charged a thing! First thing we did upon arriving was register to vote so that we can do our part to ensure Colorado doesn’t become California.
Same here, but north of you in Douglas County….
Sadly, I’m extremely dismayed at the changed political environment in Colorado as the Douglas County school board flipped to union controlled immediately after we moved here two years ago… now they’ve raised the mill value calculations to pay for the pension shortfall and will likely do so again soon to cover the new security changes being made in the aftermath of the STEM school shooting.
Then the entire state flipped blue last November with Governor Polis and all the Boulder progressives taking over and ramming their green, business unfriendly policies down everyone’s throats. Basically, they are quietly following California ‘s lead and turning Colorado into East California…
To follow what I’m complaining about, read http://www.completecolorado.com, http://www.coloradopeakpolitics and http://www.coloradosun.com .
Legal weed has opened the door to decriminalized psilocybin mushrooms and there’s an undertow of drug and alcohol consumption that is driving the inmigration from all over the nation, coupled with the Denver Economic Development group encouraging liberal tech and lifestyle companies like The North Face to move their SF liberal millennial workforces into Denver, flipping the state permanently blue…
I’ve seen Douglas County politics flipped in the last two years, and concerned conservatives down your way in the Springs have also complained about the recent political upheaval.
My biggest concern is that they’re going to put an issue on the ballot to undermine TABOR next November and I’ve also heard recent rumblings about a bullet train along the Front Range similar to Brown’s failed boondoggle…
Liberal, PC virtue signaling is probably going to slow the economic engine that has attracted business and the recent boom could just as easily bust as Colorado becomes Boulderado and SF of the Rockies….
Plus, ageism is rampant in Denver and the pay doesn’t match the cost of living and finding work here has us sadly returning to CA where there’s work….
I hope it works out better for you than it has for us, but why suffer the crappy winter weather for the same liberal politics, and just wait until the next hailstorm damages your car, home and property….
Have not read the book but 130,000 more left than came. Interested as to the average salary of leaving verses entering and other comparisons such as education.
Actually the reversal of California’s “net domestic migration” (migration between states) commenced in 1992. Since then we’ve had about 4.2 million MORE Californians leave the Golden State than move here from other states. I say again, the 4.2 million is a NET figure.
The net departures hit a quarter million a year net in 2006, but slowed dramatically in the recession, because people couldn’t sell their homes. Since 2011, the annual net outflow has increased every year, and appears to be further accelerating.
We left CA 5 years ago, I remember the gas was just over $5 gal the day we left & it was $1.99 gal the day we arrived in our new state. We have 28 rentals here, a couple four plexus & the rest are duplexes & single family homes. Being entrepreneurs who’ve always owned at least one business we were happy to move to a lower tax state with not nearly as many onerous regulations on business start-ups. Like Ms McKone, we registered to vote immediately & we do all we can to keep Cali out of our new state.
I left Long Beach after 19 years for northern Virginia where it’s like Irvine but cut into woods. After 18 years my first apartment was sold and we were all asked to leave. The same thing happened a year later across town. In both cases a slumlord management company was installed, and they both treat tenants with contempt and spend as little as possible on repairs and upkeep.
The rent control issue is not covering what really matters – professional and reasonable relationships between tenants and who they pay their rent to. Long Beach does not and will not enforce housing codes because of political contributions and a mad rush to turn Long Beach into Santa Monica.
Good luck with turning ghettos into expensive ghettos with cheap upgrades. I miss least the marching armies of the homeless and the SoCal trait of people making everything they touch worse than how they found it.
I love CA. Eventually you realize every state has trade offs and no place is perfect. I can go from my condo in W. Hollywood to my house in Del Mar in about 2 hours and escape for a week or two. I can go from the beach to big bear or take a road trip to Santa Barbara in a matter of hours. My parents live in Ocala, Fl. It is beautiful but the humidity, bugs, snakes, rain, and the racism? Im good without all that. Unfortunately, if you didnt get in on the real estate game in the 90’s? you’re screwed unless you had money. I bought a fee homes in hancock park for a steal! I mean literally a steal!! Held onto them and BAM! Livin the dream now!
A very interesting and well written column on why people are leaving California hope that it adds to discussion.