UC Berkeley Study: Sacramento’s Regulations Create America’s Highest Poverty Rate, Triggering California Exodus

A new report from the California Policy Lab at UC Berkeley has exposed the harsh reality of life under one-party Democratic rule: California now suffers the highest cost-of-living-adjusted poverty rate in the entire United States, a crisis manufactured by Sacramento’s suffocating regulations, anti-housing policies, and decades of progressive failures. 

The study, “Priced Out: Relocation Amidst California’s Affordability Crisis,” confirms what struggling families have screamed for years — incomes may look decent on paper, but skyrocketing housing, energy, insurance, and everyday costs have pushed millions into real financial despair. The dire financial outlook for California and its punitive economic policies are even causing billionaires to flee, taking their businesses with them–along with the revenue and taxes Sacramento politicians rely on to fund their pet projects, bloated bureaucracy, and a Ponzi pension scheme. 

As Herb Morgan, candidate for State Controller, noted in his February op-ed:

CalPERS reports roughly $563 billion in assets against about $716 billion in liabilities, leaving about $153 billion unfunded. CalSTRS carries another $88.7 billion in unfunded obligations, with funded ratios in the mid-70% range. Together, that’s roughly $240+ billion in pension debt — more than $6,000 for every Californian.

San Diego County Supervisor Jim Desmond nailed it: “UC Berkeley just confirmed what California families already know: this state’s cost of living crisis is self-inflicted… Not because incomes are low. Because Sacramento made everything too expensive.” 

UC Berkeley just confirmed what California families already know: this state's cost of living crisis is self-inflicted.
Their new report found that California has the highest cost-of-living-adjusted poverty rate in America. Not because incomes are low. Because Sacramento made…

— Supervisor Jim Desmond (@jim_desmond) April 2, 2026

Rents run 53% above the national average. Utilities are 60% higher. PG&E bills have nearly doubled since 2019. Car insurance has surged over 30% in two years. Gas prices have skyrocketed due to refinery closures, while groceries sit 11% above the norm. The result? A punishing affordability meltdown that is hollowing out the Golden State. 

The smoking gun, according to Berkeley researchers: a catastrophic housing shortage engineered by Sacramento’s web of mandates, environmental lawsuits, restrictive zoning, and refusal to let builders meet demand. Families fleeing the state slash their housing costs by an average $670 per month — dropping from $2,376 in California to just $1,706 elsewhere. Movers into the state face a brutal 38% spike in housing expenses. 

Since 2020, California has posted the second-worst net domestic migration loss in America. In 2025 alone, roughly 150,000 more people fled than arrived. Those who escape are far more likely to own homes just seven years later — proving the California Dream is alive and well… just not in California. 

This isn’t breaking news to California Globe readers. Our investigations have long exposed how Sacramento’s heavy-handed regulations and “affordable housing” mandates actually strangle new construction, driving prices into the stratosphere while families get priced out. This isn’t an isolated disaster. As we’ve documented for years, the same failed policies fuel the homelessness industrial complex that has burned through $37 billion with exploding encampments to show for it.

The Berkeley study is a brutal wake-up call. Sacramento can no longer blame outsiders for a crisis it created. Democrats’ progressive policies have consistently prioritized ideology over results. Until lawmakers dismantle the regulatory chokehold and unleash pro-growth, pro-housing reforms, the great California exodus will accelerate — stripping the Golden state of the very people who made it golden.