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Comment by handmodel | Hacker News Reader

- The article says that "millionaire flight" out of California is a myth. This is mostly true and a good point.

- However, the article/research looks at outflow and doesn't find a trend but this is bad methodology. It looks like they are not factoring in the fact that less people are moving into California then had been previously even if the rate moving out isn't too different. It almost feels intentional given how clean and well-covered the data is on that.

This opening paragraph is good

>Every year from 2000 through 2015, more people left California than moved in from other states. This migration was not spread evenly across all income groups, a Sacramento Bee review of U.S. Census Bureau data found. The people leaving tend to be relatively poor, and many lack college degrees. Move higher up the income spectrum, and slightly more people are coming than going.

Source: https://www.sacbee.com/news/california/article136478098.html

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The myth (repeated endlessly here and elsewhere) is that high taxes and excessive commercial regulation are driving wealthy founders and other knowledge workers out of California. The truth is that high housing prices are driving low and middle income households out of the state.

California has much lower housing costs outside of major cities. It’s exodus is seen as unusual simply because it’s a a populous state, but rate wise it’s hardly unusual. IMO, people leaving California in large numbers is also a function of how many people move into the state because people who moved long distances once are more likely to move again.

As 2020 was a serious outlier I am sticking with U.S. states by net domestic migration (From July 1, 2018 to July 1, 2019):

Net domestic migration rate per 1,000 inhabitants: Alaska −12.96, Hawaii −9.76, New York −9.29, Illinois −8.28, Connecticut −6.19, Louisiana −5.60, New Jersey −5.51, California −5.15, skipping several places Delaware 7.15, South Carolina 10.30, Arizona 12.50, Nevada 14.03, Idaho 15.31. https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...

It’s the territories that are seeing the fastest changes. American Samoa –26.1, Guam –11.0, Northern Mariana Islands –15.4, Puerto Rico –14.1, U.S. Virgin Islands –7.5

Suburban and housing costs in California are very high by national standards. Is your argument that the people who are moving out of California overwhelmingly non-native Californians?

Once you are out of the main coastal communities housing prices drop dramatically. I have friends in Eureka renting a gigantic house for like $1200/mo, and I saw studio apartments in the city center in the order of $750/mo. The SoCal equivalents would be $3500/mo-plus and $1500/mo-plus, respectively.

So Eureka Ca, which is in the middle of nowhere costs about the same as the suburbs of Raleigh NC. Raleigh has a mid level international airport with direct flights to Europe and other continents, has many other cities and great schools in it, and nearby (NC State, UNC Chapel Hill, Duke, etc), (the whole research triangle), etc... with plenty of job opportunities.

What does Eureka have (appart for nice nature)? How much does one has to drive to go to an airport that can fly directly to Europe or Asia? If your local business closed, how long and how much would you have to drive to find another job?

Commanding a mid-level metro prices, without the economy vibrancy of one, is sheer overpricing. And maybe that's why so many locals are leaving. (the influx is usually immigrants, which are more willing to put up with crappier conditions).

The people on the bottom 50% aren't taking international flights and proximity to international airport is honestly a worthless metric for 90% of the population.

In fact 500,000 of them without health insurance are looking encouragingly at a possible medicaid expansion 11 years after the ACA passed.

it is a proxy for jobs and a large labour market and choice, even for poor people. Eureka doesn't have one, yet it commands prices of a mid sized metro.

CA is overpriced by a long shot

I don’t have a horse in this race, but must point out that Eureka sits directly on the Pacific Coast of the mainland United States, which adds significant desirability to a town that is admittedly best known for having a lot of tweakers.

(In fact Eureka is fairly centrally located on the coast, which is kind of cool, too. I’d want to live in Arcata instead because less tweakers. But Arcata isn’t directly on the coast, so you can’t really compare them)

This is really pedantic, but Eureka isn't really directly on the coast either, it sits on the far side of Humboldt Bay and is shielded by an isthmus that is mostly empty land. That said the coast is a 10 minute drive (and maybe 25-30 minute drive for Arcata)

As for the populace... they don't call it Eutweaka for nothin

The more we narrow our focus the less meaningful the discussion. Whether Eureka is overpriced is a digression. The parent post to this whole offshoot is implying that comparing a carefully chosen podunk town in California with one of the only two big cities in the entire state of NC shows why people are leaving CA.

Eureka can be overpriced while the overall thesis remains carefully constructed malarkey. NC has grown by 300% in the last century while CA has grown by 900% in the same period. More recently NC has grown at about 1% per year over the last decade. California grew similarly over the same period until 2016 when it started to slow down. Its barely a blip in the graph and needs no complicated explanation.

I chose Eureka because I know people there and have direct experience with the town, even if it is an extreme example. If I knew folks and the housing situation in Stockton, or Modesto, or Bakersfield, or even Temecula, or any of those other armpit Central-Valley cities, I would have used them as an example.

And you're right, maybe Raleigh is a better choice. Or maybe Minneapolis. Or perhaps Boise, or any number of other mid-size capitol cities. But they aren't California.

I think the point is that we should compare major metropolitan centers/coastal communities in CA to major metropolitan centers and coastal communities in other states. That there are places relatively cheaper in CA is not in question, but those cheaper places are likely similar to even cheaper places in other states.

The opportunities available in Eureka are not the same ones available in the Bay Area (although it's likely gotten better). I suspect they don't even stack up to Raleigh favorably. Eureka is much smaller than many bay area cities, and more importantly, is isolated, so it feels much smaller than even the ones that it is similarly sized to, as once you leave Eureka, you're not immediately entering another city of the same or larger size.

Right but this is just by virtue of CA being a big, long, state where the northern reaches are far away from the economically active parts.

Eureka is charming enough, but it has no specific attractive force over any other (very) small coastal city where the next-larger city is many hours' drive away. Compare to Crescent City, or southern coastal Oregon.

So yes, you're still in California up there, and housing is less expensive. But there are no jobs (WFH tide floats all boats), and it isn't the California that most people are looking for. See also: Bakersfield.

Median income in Eureka is well below the national median income. It's a beautiful area, very mild weather, old growth redwoods nearby, and the Eureka/Arcata/Fortuna area has universities, some good restaurants, and top notch breweries. But there's almost no work. Illegal cannabis growing used to be really big in that area, and now legal cannabis is significant, but pay is really low.

Sure beats Crescent City though.

Bakersfield at least has agriculture and oil extraction industries. But the heat and the air quality make it an unattractive place to live.

Susanville is a small town with a thriving industry in corrections, so lots of jobs if you don’t mind being a prison guard. It’s also an hour or so out of Reno, and has cheap housing. It’s also nice nature wise, and if you head north you are warned there are no gas stations for a hundred miles or so.

But moving to rural Nevada, rural Oregon, or rural Arizona is much cheaper than your example of a very cheap city in California. Even moving to Eugene, Reno, or Flagstaff would be cheaper total living expenses.

Absolutely true; you can easily double your bang for buck in California housing by moving outside of major areas. And those less populated areas are still _really_ nice.

But for every buck you save, you lose an hour of your life to our terrible transportation infrastructure. Twice the house, four times the drive. It's why the housing price equation is as unbalanced as it is here.

> I have friends in Eureka renting a gigantic house for like $1200/mo

They must have started renting that house at least 10 years ago and had a landlord who never rose the price. Because rental prices for large houses are $2000+ (Eureka/Arcata) or $1800+ (McKinnleyville) now.

Eureka is a moderate sized town by most standards, and you can get cheaper places in similarly sized towns or larger small cities throughout the US. Probably get apartments much bigger than a studio, too.

Oh yeah plenty of cheap places in El Centro and around the Salton Sea.

I clarified, I am saying the net migration from California is hardly unusual as a percentage of the population. However, the magnitude of exodus is a function of both the size of the state and the number of people who recently moved to California.

It’s not that an overwhelming percentage of people leaving recently moved in, but they do represent a larger percentage of people moving out which is normal.

High prices = strong demand

Unless it's a temporary trend driven by speculators. Looking at CA house prices is like looking at FAANG stock. People will keep jumping in to join the ride until it finally crashes.

I guess this is probably the story that gets repeated in places like HN which I agree is common.

However, if you ever talk to uber drivers or your waiters they will complain about how expensive California is. Or even people at parties who are in between jobs and thinking of moving to where they grew up. I guess in real life I just hear more people talk about the general cost of living argument than a than the specific anti-tech one.

> who are in between jobs and thinking of moving to where they grew up

I hear the opposite, people cannot afford where they grew up. Most people from the Bay Area aren’t working high paying tech jobs.

> I guess in real life I just hear more people talk about the general cost of living argument than a than the specific anti-tech one.

Anti-tech sentiment peaked in the early 2010s. Tech buses stopped being vandalized and the “die techie scum” thing mostly went away after 2015.

To clarify I am saying that some people on here are saying that California is anti-business/anti-tech and that is why people are moving out. I am saying the vast majority of people moving out of CA are just doing so because general cost of living isn't a great deal.

And almost by definition, if you move to California from somewhere else then "home" would be lower cost of living. Only exceptions are if you grew up in NYC, Boston, DC or a few other cities.

> Only exceptions are if you grew up in NYC, Boston, DC or a few other cities.

And pretty much all Hawaiian transplants.

Sure. But Hawaii is very small. Less than 0.4% of the US population. People have brought it up many times on this discussion thread.

If you live on the west coast, people fleeing the high COL of Hawaii is pretty common. Also Alaska. The west isn’t cheap, I think a lot of people would be surprised by prices in Montana (and not just because Californians are bidding up housing prices).

DC is pretty brutal some of the time. $$$

> And almost by definition, if you move to California from somewhere else then "home" would be lower cost of living. Only exceptions are if you grew up in NYC, Boston, DC or a few other cities.

Lots of California is cheaper than a lot more than just the few most expensive cities. California is not just the central cities of the Bag Area. Also, on a state level, HI has a higher cost of living than CA.

California is the third highest cost of living state:

https://worldpopulationreview.com/state-rankings/most-expens...

Everyone knows that California is not just LA and SF. But also Florida isn't just Tampa/Miami and Arizona isn't just Phoenix.

The big cities in CA are more expensive than the big cities in other states. The rural areas in CA are more expensive than the rural areas in other states.

Pointing out that the rural areas in CA are cheaper than the cities in other states is not compelling.

And for the record, Hawaii is seeing net out-migration too. At least its excuse for low cost of living is the fact that its an island that has to ship everything in.

Your link doesn’t support your argument. California’s COL index will be dominated by the fact that it’s one of the nations most urban states, with two of the largest and wealthiest metro areas.

Indeed, my experience is that there are parts of CA that aren’t significantly more expensive than my Midwestern home state.

I'm not trying to be that annoying - but are you sure the cheap parts of CA are comparable to the cheap parts of your state?

The cheapest parts of CA are probably going to be as expensive as right outside a Cleveland or Pittsburgh.

Certainly if one's goal is to live somewhere cheap while remotely-working at a high-paying tech company, you'd pay the highest state income taxes in California at the top bracket.

If we're just talking about random middle class (and below) people ability to retire in the same house they've lived in for decades, a few other states may be worse at the moment, e.g. NJ and CT and perhaps others raising property taxes fast. But the days of prop 13 protecting Californians from this same fate may not last forever.

Anecdotally as someone who's been doing some casual house-pricing over the last year around California, it is surprising how expensive a lot of the state -- including areas that were pretty cheap, in relative terms, just a few years ago -- has gotten for new home buyers. It's true that people kind of forget that there are cities outside the Bay Area and the LA Basin, but it's still dismaying how much a 1500 square foot, 3BR/2BA home that isn't of the manufactured variety is likely to set you back even in pretty remote towns in California.

Prop 13 is a huge incentive to park as much cash as possible in real estate and then never sell. Hugs market distortion. It's statewide.

Even in Oregon places like Hood River, Veneta, Bend and such have seen home prices surge.

Areas of Washington State like Arlington have seen this as well, it's crazy to see a dated 4 bed 3 bath house go for $800k when it is not within even supercommuting distance of any high paying employees.

> Prop 13 is a huge incentive to park as much cash as possible in real estate and then never sell.

Or cash out for a retirement where you aren’t living someplace subject to Prop 13 effect on the market, which is what a lot retirees leaving CA do.

Hawaii is not much of a defense as it has logistical reasons for its high cost, and anyway has a smaller total population than most major metro areas.

I'm not necessarily in the camp that thinks California isn't worth the cost. Though some undesirable location in the desert may indeed not be worth the taxes.

> Hawaii is not much of a defense

Since it is a place that people can come to California from, it is a very effective defense against the claim almost by definition, if you move to California from somewhere else then "home" would be lower cost of living.

> Anti-tech sentiment peaked in the early 2010s. Tech buses stopped being vandalized and the “die techie scum” thing mostly went away after 2015.

While we're comparing anecdotal evidence, I live in Los Angeles and count among my peers many who work in the Hollywood/Media industry. I can assure you the general sentiment among them toward Big Tech is overwhelmingly negative. I work in tech (albeit not a large company) and even I tend to agree.

I am guessing that the previous post is about the S.F. Bay Area anti-tech backlash peaking in early 2010s. I also think that the people who were expressing that backlash would not distinguish so much between Big Tech and Hollywood/Media. I think the peak after 2010 has more to do with economic stress following 2008 and the glaring wealth inequality.

A lot of this negative big tech sentiment isn’t backed by anything rational, it’s the same middle school or high school mentality of beating up nerds.

No, it's not. First, most "big tech" aren't nerds in the sense you mean, and they act more like the "cool kids" bullies in those movies than nerds. Second, the negative sentiment has more to do with wealth inequality and all that brings than any such petty rivalry as you describe.

Also to be quite honest software engineers aren't as smart or nerdy as they think they are in general. Very arrogant and egotistical, though, for sure.

I believe the primary reason for anti-tech sentiment in SF is gentrification: https://en.m.wikipedia.org/wiki/Gentrification_of_San_Franci...

Depends where you're looking. If you look online, anti-tech sentiment has never been stronger. These are of course, very different groups of people we're talking about.

I live in Texas and I whenever I go to California, I find it super expensive too! I am a unifier site professor and my salary is not very different from the professors in CA (State university salaries are public). I don’t know what is keeping those professors there.

This very much disagrees with you: https://www.aaup.org/sites/default/files/AAUP-2021-SurveyApp...

A sampling of average overall salaries for professors:

- UC Berkeley (ie bay area): $214,300

- UCLA: $234,200

- UT San Antonio: $130,900

- UT Dallas: $169,500

So an average Berkeley professor makes more than half again as much as an average UT San Antonio professor. And 25% more than UT Dallas.

You're forgetting income taxes and then add CoL on top of that. Sure you're making gross more but that $214k turns to ~$140k after taxes while that Texas $169k turns into ~$126k. So closer to a difference of about $14k. Then think that housing is way cheaper, gas is almost half the price, electricity can easily be had for 7c/kWh in DFW, etc. I just filled up this afternoon for $2.49/gal, what does gas cost out there these days, $4.60/gal?

In the end I imagine the prof at UTD could easily have more cash at the end of the month than the prof at UC Berkeley.

UTSA is such a small school it really shouldn't even be compared to UC Berkeley or UCLA.

Many CA universities have housing programs for professors to offset the higher cost of living that i don't think show up in those salary averages.

Interesting, I see that here:

https://www.ucop.edu/loan-programs/loan-programs/frap/index....

It doesn't really say what percentage of professors get this assistance or how much that assistance is typical in the end.

Faculty housing rates at UCLA:

https://portal.housing.ucla.edu/faculty-housing/faculty-hous...

So pretty much >$2k and up to $5,427/mo for housing costs. And that's supposed to be somehow more affordable than the surrounding area? For a 2bdr apartment its >$500/mo more than my mortgage + insurance on a four bedroom home with a pool purchased recently. For the condos, that's a few grand a month more. Compared to $1,400/mo average rent immediately surrounding UTD. Rent can be found for <$850/mo in Richardson, only 42-70% of the cost. And that's without having a small commute and living in a cheaper part of DFW, as Richardson's real estate isn't exactly a cheap part of town.

That would have to be a pretty good-sized stipend to offset that cost. Also it speaks volumes that a professor making >$40k gross more needs to then also have a housing stipend to make the actual take home close to the person making >$40k less.

Texas A&M professors might be keeping more than even a UCLA prof! College Station is a tiny town.

Yeah, right? The Texas A&M prof can probably afford a good-sized house, own and operate multiple cars, and still save more cash at the end of the month than a prof at UCLA living in a studio and not owning a car despite making ~$100k less gross income.

I remember taking a hard look at some job offers around SF, relocating from DFW. Crunching the numbers I would have needed well more than twice my current salary to have my savings rate be the same and I'd still be downsizing my housing a good bit.

Others have pointed out critical problems in your comparison. Clearly, you can't cherrypick the best universities in CA and compare them to second-best in TX. UTSA is not even an R1 university. Generally when people talk about top universities in TX, they refer to UT Austin and Texas A&M. In any case, neither UC Berkeley nor UCLA is a good representative of CA universities.

A major issue in looking at the averages at the entire university level like this is that you might be comparing apples to oranges. There are typically three ranks among research professors: assistant, association, and full. These positions can additionally have chairs. The salaries differ considerably across these ranks. Then there are teaching positions which are usually non tenure track. They may also have the same assistant, associate, and full professor positions but their salaries are much lower than the research professors. AAUP appendix has combined all of them into one single category.

Finally, this survey masks the salary differences among different disciplines. In American universities, B-school professors typically earn way more than other disciplines such as pure sciences, psychology, and engineering.

When we do salary comparisons (we have to do it while negotiating a raise), we pick out colleges/schools that are similarly ranked as ours and then we take average salaries of professors at the same position. As I mentioned, the salaries are public so this is possible although quite tedious.

I'd suspect CA pays somewhat better, though it'd be countered to a degree by the high number of academics preferring to live in CA. But either way, Berkeley and UCLA versus UTSA and UTD? Are the latter two even ranked in the top 100? Berkeley has the 2nd most nobel prize winners in the US behind Harvard. UCLA has a solid number too.

I agree, it is a non starter. In any case I was not comparing average TX university salaries to just two universities in CA

Better weather, better universities, slightly better politics, and more

Years ago (2007ish) I worked for a startup owned by a guy that relocated to Reno and had a huge property in some mountaintop country club on the edge of the city line. As we stood in the snow, looking out over Reno (where they had none) he was telling me all about how the money he saved on taxes in California 100% financed the property we were standing on. It was a very nice house... guessing about 4000 or 5000 sqft.

Many many years later I was sitting at the bar at the top of the Stratosphere in Las Vegas eavesdropping on a conversation by a guy who started some kind of sanitation or janitorial business. He was trying to impress a woman that he was talking with, and I distinctly remember him saying he'd be eaten alive if he started the company in California, and that he was thankful for the tax situation in Nevada.

So I don't think this is entirely a myth.

It's not a myth because you heard two people talk about it? It's not entirely a myth, I think we can all agree - of the tens of millions of people in CA, some think that way.

But CA has long invested large amounts in its people (one reason there is U Cal Berkley, which is one reason for the Bay Area's success), which of course requires taxes, and it long has protected its citizens, including the wealthy ones - something the citizens like and vote for.

My point is that it is happening, if my anecdata is to be believed, and that sampling theory suggests it might be (or have been) a trend. As a CA native I love my state, but it is also important to understand other perspectives.

> sampling theory suggests it might be (or have been) a trend

How does sampling theory support that your two experiences might be a trend? I got two flat tires in the last ten years. Does sampling theory say it's a trend? Statewide? Worldwide?

> it is also important to understand other perspectives

Absolutely, but let's remember that much of the narrative has been pushed by a political faction for years.

> How does sampling theory support that your two experiences might be a trend? I got two flat tires in the last ten years. Does sampling theory say it's a trend? Statewide? Worldwide?

I don't run with startup/entrepreneurial types, so for this to come up in the way it has with my limited exposure to these folks, I consider that at least somewhat significant. I am not saying it is definitely a trend. But I do remember from my social science labs that ballpark-accurate statistical inferences can be made from surprisingly small sample sizes if the population sampled is broad enough. Do I just happen to find myself around locationally-anxious ex-Californian business owners? Who knows.

> Absolutely, but let's remember that much of the narrative has been pushed by a political faction for years

Ah yes, politics' icy tendrils (tentacles?) seem to molest everything they come across, and even some things they don't. All I can say is that I am not trying to push a political narrative, and that the people who are should kindly jump off a cliff.

I think those small samples need to be larger than that, and they have to be representative samples.

> I am not trying to push a political narrative, and that the people who are should kindly jump off a cliff.

I am not at all saying that you are. I'm saying that the narrative affects the situation. I agree about the cliff!

9 people gets you a significant portion of the confidence that a larger survey provides.

? It depends on the size of the population. I don't believe surveying 9 people will tell you anything about public opinion among the ~325 million Americans.

And again, it must be representative. Should I ask 9 friends of mine?

No, unless you are trying to draw conclusions limited to your friends. Similarly, two flats in 10 years might be significant for you and your driving, but not tires as a whole.

> He was trying to impress a woman that he was talking with, and I distinctly remember him saying he'd be eaten alive if he started the company in California, and that he was thankful for the tax situation in Nevada.

He doesn't know that because he didn't try it.

There's news articles every year that California "has the worst business environment in the US" or stuff like that, but they're all based on surveys and what they actually mean is business owners are whining in case they get an income tax cut. CA's economy is, of course, doing great, and for the middle class the tax burden is less than Texas if you remember to count taxes other than income tax.

No way tax burden is less for the middle class.

There are markets that are filled up with established players and lots of competition, and then there are markets with more opportunity because they are still developing. You can get eaten alive by competition as well as taxes, more so in fact. It isn’t clear that any of the two cases you referred to are because of taxes rather than competing in mature markets.

Incline Village aka Income Village, NV has been a popular destination for tax avoidance for decades. It’s true that people move states (in reality or on paper) to decrease their tax burdens. What isn’t true is that this sort of behavior has recently accelerated and turned into something that could be characterized as an exodus.

> The truth is that high housing prices are driving low and middle income households out of the state.

Also, high housing prices are allowing home-owning retirees to cash out and live the part of their life where they don't need to worry about a job quite well elsewhere.

As a big "two things can be true" guy, I'll point out that there is no conflict between these two stories.

Even if the rich are leaving with higher rate than the poor, you will still have more poor among the people who are leaving.

I think part of the source of that myth is that middle-class Californians look wealthy to the middle class citizens of the more affordable regions they are moving to. Because while the cost of living is lower, salaries and wages generally are as well.

True but I do wonder if there has been a shift in primary residency among the wealthy. You have to have a residence in California if you're rich, it's just part of it.

Just my little data point but I moved into a sleepy little ID town that has a lot of people that have moved here from SoCal, and of the 5 people I asked "what brought all the way up to Idaho from California?" 4 of them commented on how expensive California was and the high cost of living. 3 of them also stated that they didn't like how things were happening in Cali.

Again small anecdotal data point but take it for what it is worth.

Well, it would make sense that the people who left California feel unhappy with California; Not that it's what you were saying, but just because it's likely that those who left the state are unahppy with it, that does not mean most people in California are unhappy with it.

In fact, I love California so much that I buckled the popular media narrative and moved _from_ Texas _to_ California. Funnily enough, people talk about the California-to-Texas pipeline as if it's a new thing, but it's been an observed phenomenon since at least 2005, and it's a lot smaller than the media would have you think (usually net ~40k year leave CA for TX, with about 80k going to Texas and 40k coming from Texas). That is 0.1% migration.

https://kinder.rice.edu/urbanedge/2021/03/03/californians-mo...

Do the Californians have money when they go to Texas (I don’t know)? If yes, that could feel like a “big” migration from the Texas side.

I've been in northern Nevada for the last 30 years and it's always been that way. When there's a boom in California it gets a little worse or the impact is felt a little more with things like housing, but it's not new. The best part is you get people that move here for the lower taxes complaining about the lack of services or the quality of the schools without the realization that those things are typically paid for with taxes. On the other side you have locals complaining about the "Californians" moving here and changing things to be more like California. I hear the same things from friends in Idaho that moved a decade ago to get away from the increasing housing costs here.

> How things were happening

What does that mean?

If people move out of a place because of high housing costs it necessarily means that others were highly desirous of that place.

Those people could just be their own parents, still living in CA and blocking new housing for their children to live in.

"Nobody goes there any more. It's too crowded."

It's not an exodus if fewer people are moving somewhere.

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