Boise and Reno capitalize on the California real estate exodus | Hacker News Reader

Boise and Reno capitalize on the California real estate exodus

bloomberg.com

47 pointsgshakir93 comments

Life hack: Move to the Bay Area and get a Bay Area tech compensation package, gain enough trust within your company/team to convince your manager to work remotely, move to a cheaper cost of living place and keep same compensation package...profit. Seen it done many times...

Here's the thing: what happens if you like living in the Bay Area and prefer working in person to working remotely? This strategy probably works great if you Want to live elsewhere, but otherwise it's a big trade off.

You're more than welcome to stay in California and pay California prices. A lot of other people feel that way too. No one is stopping you.

Then you pay the premium to live and work in the place that you (and millions of other people) want to be. The above strategy works best for people who don't actually WANT to live in the Bay Area.

what do you think?

Why even move there? Many companies, including ours pay Bay Area salaries regardless of where you live.

I don’t think that’s true...AFAIK your typical FB/Goog comp package for the same level as Bay Area in London, for example, is significantly lower. And base salary might be semi comparable but total comp (I.e. stock) is for sure significantly higher in Bay Area than other areas.

I worked for an SF company but live in Cleveland. Now I work for a local office but still make about half the cost of my entire house every year.

What happens if you lose your Bay Area job or decide to switch out? Sounds like you'd need to move back to the Bay to repeat the process.

It’s called a hack for a reason

The employers I know will renegotiate your terms if you ask them to relocate and work remotely.

Interestingly, some employers I know encourage remote working on the grounds that they then need to maintain smaller office spaces (actually those going to offices aren't that cramped). Seems like employers save on your not-coming in person and not minding keeping your high salary.

Quite a bit different from my experience, which admittedly is at companies like Google, Facebook, etc that bus people into HQ from 7 counties, into tightly packed office space.

The article talks about two points of resentment. The more serious is people moving to red states not understanding why they are moving and voting for the same type of politicians that they fled from. If you move, at least try to understand your neighbors.

People should vote for whomever they feel best represents their concerns and interests, or whom they think will govern best for their society at large.

If you move, try and understand your neighbors, certainly, but that doesn't mean voting for the candidate that best represents them instead of best representing you.

Speaking as a transplant, it's not wrong to ask that transplants at least take a moment to consider why they left home and moved here, when making voting decisions. If you left because of high taxes, voting for tax increases in your new home at least appears misguided.

Most people aren't leaving because of high taxes, they're leaving because of high housing costs.

Sure, so then stop for a minute and think before voting for, e.g., low density zoning.

Fair point.

Let me try to steel man the parent comment and maybe you can respond:

These people are fleeing the very predictable consequences of progressive governance, they should make an attempt to understand what made their origin so bad they wanted to leave and what made their destination so good that they decided to move there. If they vote for the policies that led them to flee, they might start the cycle over again.

I'd question using terms like "progressive" there. For instance, the reason SF is so expensive is that it's impossible to build more housing. That's not in any way a progressive policy.

It's really not "impossible".

I don't want to say its _only_ because of "progressive" policies, but specifically affordability is hurt by lack of construction, and construction is hurt by things like low income housing units, high fee's for new construction, and rent control. Those are all marketed as progressive and they are choking supply.

The entire reason why Senate Bill 827 failed was because progressives said it didn't protect the low income from gentrification.

"Progressive" generally goes along with the mentality there's no problem that is not solvable by government, which is usually the least efficient and cost effective mechanism for most problems.

This undoubtedly causes a ripple effect through the economy as all costs proceed to rise over time if not in check. Never mind how many preferred policies like rent control and micromanaged environmental laws that accumulate like technical debt and paralyze development have wrecked the housing market and soak the tech industry like a huge transfer tax that benefits those who got in the right place at the right time in the 80s/90s and shut everything down.

"Affordable housing" is another misnomered policy that is shooting oneself in the foot. Instead of just having market pricing and allowing the city to grow as demanded you let a few poor people stay because they win a lottery and still drive the bulk of people far out.

The syringe, shit laden road to hell is paved with good intentions still holds true today, and why I call myself a liberal but not a progressive in the political sense. There's a definite distinction, and certainly not unreasonable to hope that voters driven out by those policies take a moment to think of how things got there.

“Progressive” isn’t why people flee. Nobody is fleeing Australia which has higher taxes than SF.

I think people would be more inclined to stay if the money went further, I’m yet to understand why the taxes are so high without free hospitals, university, super clean streets etc.

legitimate Q: where does it all disappear in San Francisco that doesn’t occur in progressive Europe / Aus / NZ?

I don't want to be rude but are you Australian or are you just guessing? All of the top graduates from my Software Engineering class in Aus either went to the US or did a PhD and then went to the US, and people are absolutely fleeing Sydney because the cost of living is too high.

Yes I’m Australian -

I don’t think people are fleeing given the net emigration from the US, and the high cost of living in Sydney is actually my point exactly -

It’s not Sydney’s “progressiveness” that makes it expensive, you could live in Melbourne or Hobart where the tax is the same and it’s much less expensive, both more progressive. Three identical sets of benefits and taxes, wildly different cost of living.

My point was that it’s not progressiveness that makes places too expensive, it’s other factors.

Can you document the link you claim between liberal policies and high cost of living?

I guess I would read the article that points out the high taxes to support liberal policies is one reason people are moving.

I gathered from the article that the main reason people were moving was because of the high cost of living. Higher taxes certainly are a part of the high cost of living. However, clearly the high cost of housing is the largest contributor to the high cost of living, not taxes.

One could easily think that taxes in California are too high, but that in the place one moved to they are too low (assuming they are substantially lower than California of course). So I'm not convinced there's an inconsistency.

Personally, I think US+California taxes are too low, especially for high incomes. But I'm undoubtably biased from having grown up in that well-known-haven of high tax rates called Switzerland.

My impression, if you excuse the broad strokes, is that it's mostly that liberals live in big cities where they have banned housing construction, with resulting exploding housing costs.

I think “NIMBY”ism is bipartisan among affluent homeowners, whose have both an economic and social incentive to prevent new low cost housing in their neighborhoods.

Probably true.

It's still the heavily liberal big cities that are the most unaffordable. By far. It's not a subtle effect.

California isn't that expensive if you own a home outright. It's mostly expensive because of Prop 13.

Prop 13 was championed by two Republicans and passed under Reagan.

Yes, California has a 13.3% income tax and a 10% sales tax. That really has little to do with party lines. It has everything to do with Prop 13. If you can't tax old money in real estate, you have to tax something else...

Or you can try living within your means like the rest of us

Prop 13 has nothing to do with lack of supply. More supply == lower prices.

Prop 13 restricts supply. For example I have a modest home I bought for what’s now half the market value. I won’t sell to move to a slightly better home because my taxes would double.

Additionally my mother-in-law bought her home in the 70s for 1/20 of its current value. There are exemptions that allow to move within her county, but to downsize would likely 5x her taxes or more.

Isn't it great how the poor to middle class can fund the wealth of the more monied class.

  my taxes would double

Not if Proposition 5 passes.

> Prop 13 has nothing to do with lack of supply.

Prop 13 has everything to do with lack of supply; localities not being able to pay operational costs of additional infrastructure without negotiating new state aid plays a big role in localities not being inclined to support growth in any way that they are able to resist unless it's tied to something that directly produces ongoing local revenue.

  localities not being able to pay operational costs of additional infrastructure without negotiating new state aid

I have no idea what you're talking about here. There's no negotiable "state aid" that does that. Generally, development fees are charged to developers for impact on schools and such.

Jerry Brown was governor when prop 13 was passed.

  Prop 13 was championed by two Republicans and passed under Reagan.

Wrong. Proposition 13 passed when Jerry Brown was governor and Democrats controlled both the Assembly and Senate.

Interesting. Reagan was governor from 67-75, but the Wikipedia page seemed (to me) to imply it was passed under Reagan (it wasn't):

https://en.m.wikipedia.org/wiki/California_Proposition_13_(1...

Eh, the California Conveyor Belt has been operating for decades. It's already turned Portland, Boulder, and RTP blue. Next up seem to be Asheville, Reno, Boise, Austin, and possibly even Arizona and Houston.

I have a theory that people's political beliefs are largely manifestations of the behaviors that make sense within their economic system. So Blue America cares a lot about women's rights and abortion access because women are an integral part of the knowledge-worker economy, without which it couldn't function. They care about identity politics and political correctness because the information economy requires close creative work in teams, and you can't do that kind of work unless everybody has a certain psychological sense of safety. They care about redistributive policies because cities are big enough, dense enough, and diverse enough that you can't rely on social pressure to make sure everyone contributes. They care about diversity and immigration because you can't run highly-specialized knowledge-based businesses without bringing in talent from elsewhere.

Meanwhile, Red America cares about gun rights because you basically need them to live in a rural area where wild animals may surprise you at any time. They care about taxation because the businesses are usually self-reliant, independent firms (often in commodity markets) rather than deeply-networked, interconnected systems which often depend upon government R&D. They care about cultural homogeneity and upholding sacred traditions because that's a large part of the social fabric in smaller towns & cities where everybody knows everybody else. They care about liberty because they don't want Blue Staters lording their foreign values over them.

The California Conveyor is basically a manifestation of one socio-economic system growing and eating the other. As the world's population gets bigger and more interconnected, the relative size of the information economy gets bigger compared to the manufacturing, resource-extraction, and agricultural economies. That sucks up young people who are looking for jobs in industries that are growing, and deposits them in big cities. When they've made their fortunes and want to settle down, they move elsewhere, where land values are lower. But they're still embedded in the economic system (many keep the same professions, but work remotely or for different employers) and they keep the values that make sense with that economic system.

That’s a great description of the challenge.

To me, some California norms seem a bit like margin trading: loved for their high rewards when times are good, but eschewed by many with a broader historical view due to the potential for ruin.

Thats an interesting theory, but I don't think it would pass muster of a statistical analysis. Political affiliations track much closer with gender, faith, and economic standing then with Occupation. I would classify any pockets of political concentration as a result of subtle bias in selecting people rather then a natural result of the occupation. ( kinda like what they found here [1] with houses)

Also people in rural area's generally don't carry around guns to protect themselves from wild animals with a few exceptions like the deep wilderness of Alaska.

1. http://www.bgu.ac.il/BIDR/research/staff/meron/papers/epa.pd...

I was thinking more in terms of economic system than occupation. The Mexican housecleaner for a Silicon Valley hotel, the American supply-chain executive at Apple, and the Shenzhen electrical engineer are all part of the same economic system, even though they're of wildly different races, social classes, occupations, geographies, and nationalities. Similarly, the Koch Brothers and the West Virginian coal miners are part of the same economic system (and disparate from the previous one), despite being of vastly different wealth levels and occupations. The casinos in downtown Las Vegas (which serve an older, whiter, and more American clientele) are part of a different economic system than many of the mega-resorts on The Strip, even though they're in the same industry, same occupation, and same geographical location.

My definition of "economic system" is a constellation of related businesses that are all adapted to a particular level of technology. Certain technologies - particularly ones related to communication, transportation, energy, and finance - dictate an optimum arrangement of firms within the economy, because they directly affect transaction costs, and transaction costs are the reason we have firms instead of independent producers. When a major new technology - like the Internet - becomes widely adopted, that optimum changes, and many firms just no longer make economic sense anymore: even if the firm remains economically competitive within its market, its market no longer exists anymore, because the boundaries of how it makes sense to divide the economy into firms have shifted, as have what the economy actually produces. But it takes a long time - generations - for this to actually filter through all of the economy, because existing business relationships don't die until the companies involved run out of cash, which doesn't happen until a critical mass of their own customers run out of cash, and so on. So for a period of 30ish years, the two economies exist side-by-side, but often with a lot of friction between the two of them, along with a growing wealth disparity. People can feel that there's a new, alien way of life that threatens to destroy everything about what they know of the world, but because few people have visibility into the whole economy, they often can't place exactly why they're mad and end up seizing on surface manifestations of the problem.

Maybe you should take your own advice about being attentive to your neighbors.

Perhaps the universe is simpler than you imagine. Having put aside a pile of money they want to invest it where it will buy more.

Alternatively perhaps they disagree with some aspects of life in CA but would be happy to import other aspects.

Perhaps they intelligently believe in increased taxation because they believe what their tax money will buy is worth the sacrifice.

In flatland this is a contradiction but if Florida with x% more taxes is still substantially cheaper than the bay area now it might well not be. Give your neighbors more credit.

As a Floridian, I'm pretty familiar with how locals feel about folks piling in from out-of-state. A lot of retired Northeastern and Midwesterners live in FL that moved over the past few decades, and it totally changed the makeup of the state. Locals get uneasy, but it's mostly a nervousness about how the transplants would change the area. In some cases, former rural areas were transformed into huge retirement communities and planned developments (PUDs).

While they certainly changed Florida, I also think that Florida changed them. Most of the snowbirds I met in central FL tended to vote Republican, though they might have been Democrats in their home states. The main reasons people move to FL are low taxes, good weather, and affordable housing. It's a very pro-business, pro-development state. I think it's hard to move to a state and not be influenced by its culture.

My favorite is the people who move in next to a farm then make life hell on the farmer. A lot of people aren’t moving to a new area, they are homesteading.

Perhaps, but I think things have changed now such that the politics of an area are much more impacted by the urban/rural divide than the red state/blue state divide.

Look at Texas, which hasn't elected a Democrat statewide in decades. People used to joke about "The People's Republic of Austin" in reference to the liberal lean of that city, but now all of the largest cities in the state, Houston, Dallas, San Antonio, Austin, El Paso, voted for Hillary in the last election.

Someone moving from SF or LA to Austin is probably not going to find their local sensibilities that different from where they left.

Maybe. I think that may be true overall, that denser cities lean left. Where does that leave suburbia though? Somewhere in the middle? While Austin votes blue every city/county around it voted red, including Round Rock. And Ft Worth went red but Dallas went blue. So I guess it might even depend on your neighborhood.

Aren't things like schools in a dire state in Florida, though?

Not trying dig at the state or anything. But it occurs to me that an influx of retirees who care about low taxes a lot more than they care about educating the coming generation isn't necessarily a good thing for a state in the long term.

They're definitely terrible on average. I can't disagree with you. I think the state could even stand to raise it's sales tax 1% to support better education.

How about fleeing to lower cost of living states. I don't think their politics have much to do with the cost of living. Some very blue states like Hawaii and Delaware have very low property taxes and Washington has no income tax.

I grew up in Washington and remember how excited everyone was to go shopping in Oregon and not have to pay sales tax.

> How about fleeing to lower cost of living states. I don't think their politics have much to do with the cost of living.

Politics has a lot to do with broad economic outcomes (in both directions) which has a lot to do with cost of living specifically.

> Some very blue states like Hawaii and Delaware have very low property taxes

So does California. Not that that makes any of them low cost of living states.

Another theory is that it's the desirability of the location. I'm sure there are plenty of high cost of living areas in the highly desirable areas of red states and plenty of low cost of living areas in the least desirable parts of blue states.

I'd guess that local beauty, amenities, jobs and housing supply has a much greater correlation and causation with housing prices than state wide political identity.

Let's not forget that political identity has huge roots in culture not just economics.

> I'd guess that local beauty, amenities, jobs and housing supply has a much greater correlation and causation with housing prices than state wide political identity.

All of those things are influenced significantly by government policy; politics isn't just identity. (Local climate is a factor that is relevant, and isn't particularly sensitive to local politics, but it doesn't overpower all the things that are sensitive to that.)

Why would you flee cost of living in California by moving to the only state with an even higher one (Hawaii), or to any in the upper 30% (Delaware, Washington)?

sources:

https://www.missourieconomy.org/indicators/cost_of_living/

https://www.fool.com/slideshow/15-states-highest-cost-living...

The cost of living in Seattle, WA is, uh, not insignificant, to say the least. And if you move to Eastern Washington then you're in a whole bunch of GOP-voting counties with a hell of a lot less in the way of jobs a rich techie would be interested in.

How about Vancouver, WA? (Across from Portland, not the city in Canada.) I’m thinking of checking it out.

Vancouver is most notably home to white supremacy/far right groups.

Also, the very thought of commuting across the Columbia river is enough to drive me crazy.

There's not a lot of "there" there, in my experience. What do you think you'd like about the place?

Several double negatives:

1. No state income tax.

2. Not-preposterous rents.

3. Not-terrible climate?

4. It's still an actual city, I guess?

What I'd ideally want is Los Angeles weather with something like New Hampshire government. Doesn't seem to be on offer.

Classifying Vancouver as an "actual city" makes me wonder about that qualification. I think that in many ways it's simply a suburb of Portland. The climate isn't that bad, but it's a lot closer to Seattle than Los Angeles.

Alaska's a pretty cool place. Just as long as I don't have to live there, I mean.

Vancouver not BC, Washington not DC

For what it's worth, I'm a techie that thought Seattle was too expensive... ten years ago. So I moved to eastern Washington. Yes, it is very small town and very republican. But, every house on my block has Democrat political signs in the front yard and I think there's a very real possibility we're going to see our state legislative district and our congressional seat go Democrat. Likewise, depending on where you are there's more here than you might expect - short flights or ~4 hour drive to Seattle and Portland. Close hop up to BC for skiing, etc. Affordable housing. Reasonable public schools. It's not all mad max here in flyover country.

> I don't think their politics have much to do with the cost of living.

There is certainly a clear correlation. Whether it's causation is of course up for debate.

Now if we could only stop giving subsidies to red states and let them pulls themselves up by their own bootstraps.

Speaking for myself, I was glad to escape California. Not only because of real estate, but also because of taxation. A top marginal state tax rate of 13.3%? OUCH!

Plus a 9.5% / 10.25% sales tax rate if you're fortunate enough to live in LA or Santa Monica. I believe SF is around there as well.

So now we need to compare different apples with different apples again, avoiding comparison of different apples with same oranges?

California's total tax burden is 9.5% of income; the median state is Kansas at 8.5% [1]. I was surprised the difference is so small; is there something not captured by these stats?

[1] https://wallethub.com/edu/states-with-highest-lowest-tax-bur...

Inequality isn’t captured, CA relies more heavily on the top earners to fund the budget.

> Inequality isn’t captured, CA relies more heavily on the top earners to fund the budget.

Because of the high reliance on regressive parcel taxes on property (because of Prop 13 limits on ad valorem property taxes that doesn't effect parcel taxes) and regressive sales taxes combined with progressive income tax, California state and local taxes are, in net, regressive at the low end and progressive at the high end; most other groups below the top 1% pay less, proportionately, in taxes than the bottom 20%.

https://itep.org/whopays/california/

That seems.... reasonable to me? (As someone who is in a fairly high tax bracket and who wishes our local taxes were higher on folks like me so we had better services.)

It’s much higher than even the second highest, NY.

Is there a way you can donate your excess cash to fund the services improvements you want?

Would be cool if you could voluntarily fund specific services (schools/homeless) and lower the tax burden on others

Higher salaries make up for higher taxes. That number you see in your pay statement before taxes was never going to be yours.

We took one whiff of California's tax and housing regime and bought a house in Las Vegas. So what if it's a charnel house for three months every year, the lack of state tax and reasonable housing prices make it worth it.

> So what if it's a charnel house for three months every year

Wait, what? Looking at that definition I still don't understand

I think the reference was towards the ridiculously hot summers Vegas can see. When I went in the beginning of June for my birthday San Diego was in the 70s and Vegas was topping out over 110.

From my one experience in vegas 110 is quite bearable due to low the humidity. How did you take the heat?

I took it fine, I used to work outdoors in the High Desert (Victorville/Apple Valley/Lucerne Valley) area doing point-to-point wireless installs. Summers there can be just as brutal.

Quick edit: not as brutal, but close. Vegas regularly sees higher temps.

It's fine. We have our industrial air conditioning units and swimming pools, and there is plenty to do indoors for the duration of the summer.

Might have misused the phrase -- I was simply referring to how hot it gets during the summer.

Really? Do you enjoy outdoor activities?

Vegas hiking is good in fall, winter and spring. The heat necessarily means that you limit yourself to indoor activities during the summer, and that's just fine by me!

It will be interesting to see what happens to Las Vegas when the water supply runs even lower than it is now.

Going out to Lake Meade isn't exactly reassuring these days, but the Vegas water district has made huge strides in reducing water consumption: the rebate program to get people to put in more natural foliage in their backyards has been a smashing success, there are more programs coming on stream make sure that per capita water usage keeps trending down.

I'm not too worried about the future, to be honest.

So a lot of voting demographics will change I assume, a lot of red states would become less red if this migration becomes a serious trend. Middle class New Yorkers are affected by high prices in housing as well

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