Tech workers now doubting decision to move from California to Texas
chron.com
chron.com
Maybe I’m too much of a cynic but when everyone was hyping up moving to Texas (or Miami before that) the only pitched seemed to be affordability. But more or less everywhere is more affordable, the question is why move to [destination state/city] specifically. And I never saw a hugely compelling reason.
Off topic perhaps but personally I’m much more interested to know the future for things like the arts in the face of inaffordability. Like, if aspiring actors can’t afford to stay in LA long term waiting tables and going on auditions what might that mean for the film industry? Could we see other cities get some of that cultural cache?
The higher housing prices in CA reflect much greater demand - people want to live in CA, despite all the reactionary political media campaigns - and it's for good reason. When Austin prices match SF, then things have changed.
I was surprised that so many people just followed a hot trend on such a long-term, high-impact decision.
The Bay doesn’t have any more land (and nimbys tend to prevent new, denser development). This drives prices up.
Texas has an absurd amount of empty land. This helps keep prices down.
Making a comparison between the two and attributing the difference to desirability doesn’t make sense.
(I don’t disagree that the Bay is desirable for many reasons or even that it does have higher demand.)
Aren't you excited for eternal movie stars? Thanks to improved graphics/"AI" you can have Tom Cruse be the star in every movie for the next 500 years.
> some very well compensated workers discover that affordability isn’t the biggest motivator in their lives.
I'm not American and know nothing about SV, but I am quickly learning money doesn't matter that much to be compared to being around friends/family. At this point money would not be the deciding factor in any move I made.
I think that is the key point, if you have money to burn, sure it's great in California, but a lot of people really are having a hard time making it work and are moving specifically for the affordability. This includes junior devs from what I'm seeing.
Being employed in tech AND Bay Area (therefore California) leaves one pretty spoiled for pay, perks, diversity, activities, etc.
Even moving out of Bay Area, like to SoCal, the tech quality of life is just not the same.
I’m sure everyone was also talking about the filthy streets and daily car break-ins, too…
I think we would have been okay in Austin, but the things I've heard from close friends from Texas are:
1) Austin is not like SF Bay Area at all. People around here seemed convinced by the myths that Austin was like a liberal oasis in a Republican desert but it's not like that at all. It's more liberal than rural Texas but it's still Texas.
2) There's only desert and rolling hills for 3+ hours around. No water, no mountains, etc unless you make a long road trip. It's not like the SF Bay Area where you have water, desert, mountains, etc all very close by.
Perhaps it's an American thing because the American political system has resulted in a complete lack of common-sense legislation; but it's absolutely justified.
(My background here: I'm an American living in the UK. I've been consistently surprised by the number of common-sense laws and regulations that are supported by even conservatives, or if not supported, are not immediately repealed once conservatives gain power.)
I'm saying I don't understand why one would be concerned about the politics of the people in the city they live in. It wouldn't even cross my mind to consider it.
I can’t imagine simply not caring, unless one is so wealthy that the laws don’t matter, or the kind of person who is never affected by their neighbors’ antagonistic voting.
Also, non-competes are banned in California but not in Texas. Moving to Austin means giving your employer a veto over your future career.
In the UK this is often disguised because it gets conflated with age: people want to live in the big cities when they're young, and when they're young they're more liberal. As they got older they get less liberal and want more space, so move out of the cities, so at no point does it feel like they're selecting where they live based on politics. But it does shake out that way regardless.
The USA is big enough and California far enough to the left vs other places, that even moving from one big city to another will yield noticeably different neighbourhood politics.
Fortunately where I live there is no political meddling in the school syllabus - standards are set nationally by the Education Dept and schools boards don't get voted in on political lines.
> standards are set nationally by the Education Dept
Wait, desert?!
(From Austin, Big Bend's part of the Chihuahuan Desert is about 8h away, plus of course many other dry & dusty west Texas locales.)
(Los Angeles is east of Reno.)
Very far to the east as it seems . . . ;)
Reno: 39.527110 N, 119.821812 W
About 1.45 degrees east.
That's not to say it's a permanent monopoly, but if those other states want to actually take any of that influence, they need to morph their policies to at least match the kind of privileges California offers. There are other places that have actually been working to do this for a decade or two that have grown permanent economies in the tech realm (Boston rebuilding their tech economy, Colorado, Utah, Oregon). Texas is simply not one of them, despite Austin doing its best.
I live in a state with income tax, and if I lived in this same house in Austin (as if I could afford such a house in Austin) my total, overall tax bill in Texas would probably be $20k per year higher than I pay now.
It's a misleading claim every time it's made.
The people of Texas need to pay for things somehow; they must contribute tax revenue roughly equal to government expenses. If it's not personal income tax, then it's some other tax.
I prefer income tax when it's progressive (higher rates for higher earnings), because it helps equal out the sacrifice: 10% of $10,000 income is much more of a sacrifice than 10% of $1,000,000 income.
It's hard to see how any other tax is preferable. Why would I prefer sales tax?
For example, both Texas and California have 0 miles of high-speed rail. But California has spent $10B for those 0 miles, while Texas has spent $0.
I love this.
High property tax on the other hand, is helpful in two ways:
1. It directly tax the rich who hold more property.
2. It keeps housing prices lower.
Property tax is a wealth tax for one (very significant) kind of wealth.
This feels like if you're a normal person who happens to own a painting that becomes super desirable and worth millions. If you sell it then tax away, but otherwise it's literally just the same painting you've always had.
(And when you die, the capital gains base resets, which is the real travesty -- the heirs pay the loan with some of the capital at zero capital gains tax cost, and start borrowing again with the same strategy whenever they need to.)
How so though? If you're not selling or collateralizing something, you're not gaining any money from possessing it (unless you're counting the spreadsheet number going up as gains by itself).
> And when you die, the capital gains base resets
Yeah, this seems pretty ludicrous. I can understand why inheritance wouldn't cause a taxable event (e.g. you inherit the painting), but it seems pretty wild to allow that while also resetting the basis.
I could be missing something, but I don't know of a super reasonable defense for this part (other than potentially disincentivizing inter-generational hoarding of assets? Honestly not sure)
You aren’t gaining money, but you’re gaining wealth. And the compounding effects are exaggerated if you don’t pay tax until you sell.
For certain asset classes, especially liquid assets like shares/stocks this is dead simple. The value is easily and accurately determinable. If you don’t have the money to pay the tax, you sell assets to make the money. Property, especially residential, is basically on the same level. Ah, but what if investors don’t have the cash and are forced to sell their properties? God forbid these leeches stop treating housing as speculative assets and sell their portfolios onto owner-occupiers.
For other assets, yeah, I don’t know. But I don’t have a single iota of sympathy for millionaires/billionaires who may struggle to pay tax because their wealth isn’t generated via personal income.
True, but only in a philosophical sense. It's an issue of pricing, and pricing securities assets to original purchase value is a falsehood.
People are very happy when their stock price increases dramatically, or their home value increases; they don't say 'well, those aren't my assets; all I have is the $100 price I bought it at X years ago.' People are happy when it's securities for which they only have future options to buy.
States without income tax are nearly always states with more regressive tax structures as a whole[0]. States with income tax are typically less regressive. Property tax can target wealth, yes; but states without income tax nearly always rely on sales and excise taxes to bridge the gap, not on property taxes.
0. https://itep.org/whopays/#:~:text=Washington%20State%20is%20....
But who taxes unrealized capital gains?
i used to knee jerk think that raising property taxes to the market rate was a great equalizer. in california that bill got killed, but actually i'm more informed now and i don't think it's that easy.
rich people find a way, always.
It wasn’t that way when mortgages were 2-4% —- getting a mortgage is harder and requires a large down payment. It’s more of a commitment. Rent will always be more.
>So people can't be buying for the purpose of making money off renting it out, or for the purpose of saving money by not paying rent.
They can and they did.
> People must be buying for the purpose of making money from the price going up in the future.
It does that too, and for many boomers who bought in the 60s-80s, it went up about 10x for them.
> Property tax prevents it from going up in the future too much, thus it will prevent prices from getting so high.
Look up “California Prop 13”. People who buy basically get a freeze on tax rates at the price they paid for the house. If you bought in 1978, you’d pay the property tax based on the 1975 assessed value, and it can only go up 2% per year up to 1% of that assessed value MAX. That means if you bought a house back then for $100k, the max tax is $1k. Now your neighbor moved out and cashes in on their lottery ticket-like winnings, selling their home right next door for the $2m properties on that street are now worth. Guess how much the new owner pays in taxes? $20k. Even though the house paying $1k could sell tomorrow for the same $2m, they paid a ridiculously low property tax for decades, and the new owners of the exact same property will pay $20k each time property tax season rolls along. This garbage law is a big part of why owning in the Bay Area is so hard for folks trying to get their first home. Meanwhile, tons of owners rent their paid-off cheap tax home for ridiculous market rates. $5-7k/mo for a clapped out 60s POS is very typical. The folks who really played their cards right and have multiple properties for which there paying 1/10th or so of what their property tax SHOULD be then renting those all out while they live like kings are the real winners in this scenario, as are all the businesses that enjoy the same anti-competitive benefits. Ever wonder how all those crappy taquerias in San Jose stay open after all these decades while newer much better restaurants struggle and go under in a year? It’s this. Ever wonder how much tax Disney pays on all their property? It’s criminally low. Yet this issue is such a political third rail because all the boomer voters love love love their sweet sweet 90%+ tax discount, they’ll do anything to keep it. Another fun fact is this benefit can be passed down within the family, and with some clever lawyers, be passed between companies as well (IIRC the trick is to sell a property in 3 parts so no part exceeds 50% of tbe whole). Yay, loopholes. This is also a big part of why we have some schools that are surrounded by $2m+ houses and yet the school is way under-funded: those old neighborhoods don’t pay jack for property tax.
It's not now.
>Look up “California Prop 13”
Yeah, I know about it. I'm not arguing in favor of it.
>all the boomer voters love love love their sweet sweet 90%+ tax discount
Wouldn't it still be possible to remove prop 13 for corporations?
Quantity supplied is not fixed in even the short term, landlords choose whether to let vacant units or remove them from the market, e.g., for upgrades that might improve their relative position in the market when re-let but prevent letting them immediately, based on market conditions including adequacy of price.
There's a limit to how high quantity supplied can be in the short term, but underneath that cap it has the usual slope direction of a supply curve.
If you make over $66k, your income tax is 9.3%, going up to 13.3% if you make FANG money.
We have a roughly 10% sales tax.
You'll pay about 1.25-1.5% of your overpriced home's value in property tax annually.
And your car is going to cost you a few $hundred to register every year.
If you're a fan of any specific kind of tax, we've got them all here.
The marginal rate is 9.3% above 66k. If your AGI is $67k your taxes are ~$3000. There is no 13.3% bracket. There is a 12.3% bracket for marginal income above $677k, which fewer than 1% of Californians earn.
A consumption tax would be good. It would affect everyone. It would be easier to levy than an income tax.
Sales taxes are not progressive and therefore unfair. Bezos and the janitor pay the same tax for the same thing (though in fairness, Bezos does buy more things).
A tax almost always ends up curtailing what it taxes.
Taxing property curtails private property ownership, taxing income curtails productivity at the source, taxing expenditures curtails consumption.
Which of these is more sustainable with less compromise to overall economic opportunity?
>in fairness, Bezos does buy more things
Probably not the kind of things or fairness that does him or anyone else as much good with the money compared to what the average person would do.
If you want to limit property tax, but you don't have really really strict rent control laws (which California does not: some areas--including, notably, San Francisco--do have some minimal mechanisms, but they pale in comparison to the power of prop 13 for property owners) you end up with an extremely unfair tax system...
...which, though, does favor people with more money, and so this actually furthers the narrative of how the people who moved away from California because they wanted to not have so much tax on their income are now realizing they have a lot of assets and want to capitalize on that in California.
Just paying $20k would place the assessed home value after exemptions at >$970k. Standard homestead exemption is $40k, so $1.1M for actual assessed value. But you're saying $20k above whatever you're paying already, I'm guessing you're probably paying close to $20k since you're looking at >$1M homes, so in reality you're looking at like >$1.5M homes. That's an incredibly fancy house, far more than normal. That's more than twice the average price of a house in Plano, a pretty nice place to live if you're gonna live in Texas.
You can take hits on one or more of those requirements to get the price down but it's not apples-to-apples anymore.
I'm just trying to point out the majority of the state doesn't pay well over $20k in property taxes. Only very wealthy people do.
In 2021 the average single family home in Texas was like $260k. Values have gone way up, let's say $320k for example. Minus $40k for homestead, $280k assessed. Living in a city you're going to see like 2% property tax, so $5,600. So your $30-40k tax bill is probably six times the average tax of a house in Texas.
Six times the average tax bill.
See how that's just not a normal price most people actually pay?
Your comment finally made me realize this.
That’s not an impediment for corporations though. Ireland and Luxembourg have done very well attracting rich companies that can choose whose taxes to pay within the EU.
The USA has the Constitution which at least in theory places hard limits on what the federal government can do, and the Constitution is strongly supported across US culture and society. The Supreme Court for example has recently started returning powers to the states.
The EU's equivalent is the treaties, which begin by saying the goal of the EU is "ever closer union". So the EU's stated goal at the very beginning of its foundational documents is to homogenize the continent's systems of government. Nothing in the EU's institutional philosophy or culture recognizes that it should be limited in scope and that countries should always have local control over some matters. For example the ECJ almost always rules in favor of more EU control, even when the treaties clearly say otherwise. Due to the widespread nature of this cultural mileu amongst the European political class, the EU routinely takes control of policy areas that it was never granted by treaty whilst facing minimal or no resistance.
For example, you talk about government-shopping by companies who set up their HQ in Ireland. The EU hates the possibility of government-shopping because it thinks the entire concept is illegitimate, so they have been attacking Ireland for years to try and force it to stop being so competitive. You can see that culture at work in the language they use:
https://www.europarl.europa.eu/RegData/etudes/ATAG/2022/7335...
"Ireland has been criticised for the way in which its tax system has been used by multinationals to set up aggressive tax planning structures and exploit mismatches and gaps in the international tax framework"
Low taxes are "aggressive" and a "mismatch" which gets "exploited". They think of a country competing against others using low taxes as some sort of hack that needs to be shut down, not a natural part of the competition between jurisdictions. In theory the EU has no control over corporation tax, but in practice the treaties let the EU regulate subsidies, so they redefined subsidy to not just mean direct payments from governments but also just charging lower taxes than France/Germany. And then told Ireland to change.
Now in practice the picture is complicated by the fact that the EU treaties do supposedly limit the EU's powers, because the people who signed them recognized the danger of the EU's unlimited ambition and sought to restrict it. And the US federal government has always grown, often working around or just ignoring the constitution in various ways. But this stuff is all downstream of culture. The Americans have the Republicans and its associated culture, which tries to decentralize government at least sometimes, in some ways. Even in cases like military spending where they don't reduce the size of the federal government they do try to spread it around, hence "porkbelly politics".
Mainland Europe doesn't have many similar parties or cultures. They're all very pro EU "integration" (read: passing control to Brussels). The UK had a smaller equivalent in the form of euroskepticism until they succeeded and Brexit rendered it irrelevant. And now Germany has something a bit like that in the form of the AfD, which despite being constantly smeared as Nazis has a relatively decentralized and conservative manifesto that wouldn't look out of place at a Republican convention. But you can tell how different the cultures are by the reaction: there's a very real and serious discussion in Germany about flat-out banning the AfD despite that it polls at about 20%. Nobody is talking about banning the Republicans.
So in practice I'd argue that the EU doesn't have the same design or purpose with respect to government-shopping as the USA does.
Thatcher was pro-EU (despite the rhetoric) because she saw it as an opportunity both for British exports and to attract businesses. And it did work! Britain practically wrote large sections of the EU free market rules. The massive growth in London’s financial sector since the 1980s is one example of the benefits.
> “the AfD, which despite being constantly smeared as Nazis has a relatively decentralized and conservative manifesto that wouldn't look out of place at a Republican convention”
Honestly, a substantial minority of today’s Republican Party wouldn’t look out of place at a 1930 German National Socialist convention.
At least Germany is having a discussion about whether forces that are against democracy and human rights belong in a democracy. Most Americans, including old-school Republicans, appear to be just closing their eyes and hoping the problem goes away on its own once the nearly 80-year-old populist leader exits the arena.
And that's before the fact gas and electricity is routinely 2x more expensive in CA than TX, which energy costs are a large part of the costs of operating a car. If we were to really compare car ownership costs in CA vs TX to the idea of how much I spend on AC, it wouldn't even be close.
Texas's electricity rates are about half of those in California, so 3 summer months' AC costs in Dallas could be notably less, especially for a small/single-person residence.
(And, Calfornia's gas costs about 40% more per gallon than in Texas, due to both taxes & other supply-limiting regulations - which one might reasonably consider an extra tax on having a car in California.)
We pretty quickly learned that Texas does not feel like the future. The traffic was surprisingly worse than where we moved from (Orange Co), we had an incident with some nut that harassed us at the grocery over wearing a mask, and the weather was absolutely unbearable. We don’t drink or watch sports so it felt like there was nothing to do besides sit inside our air conditioned home in a quiet neighborhood and occasionally get really good barbecue.
We made it almost 3 years, but but the bullet and moved back. California has its shortcomings too, but we have a newfound appreciation for it and will probably never leave.
[0] https://www.attomdata.com/wp-content/uploads/2022/09/Top-10-...
[1] https://www.redfin.com/county/2866/TX/Travis-County/housing-...
- SF tech companies recalling some workers for partial in-person work
- laid off tech workers going out of TX in-person interviews
- affordability pushing workers outside of TX to other states, which does not include CA
Article doesn't bother to explore any.
Labor force in tech:
Total Change
2017-22
SF Bay Area 407,810 23%
New York Metro 371,030 11%
Toronto 285,700 29%
Washington, D.C. 265,240 7%
L.A./Orange County 249,620 17%
Dallas/Ft. Worth 205,920 28%
...
Austin 96,610 39%
Avg Wage
SF Bay Area $185,425
Seattle $172,009
Boston $121,794
Baltimore $113,544
Washington, D.C. $105,808
Austin $105,495
He said Austin seemed alive when it was one of the only places open during COVID, but now it’s just another place with worse weather.
Overall, my quality of life increased greatly and I hope you find your place to (not to sound cliché) live your best life. Our time is so limited and living in limbo is no fun.
https://www.businessinsider.com/tech-workers-moved-to-austin...
I'd still probably pick Madison over Austin, though.
(Seriously, when I was at the airport flying in for my on-site, I heard some of the workers behind the check-in desks talking about going to work there...)
Many issues:
The charm is gone with too many highrises like San Jose downtown.
It's hot AF. 110 F for 3 months every day. 100 F every day for another 2 months on either side of that.
In winter, it can randomly freeze down to 11 F, and say "hello" to no power and no water for 2-3 weeks.
The housing is slapped together and lacks architectural design. The new apartments are tiny and expensive, and not very good.
There's just as many homeless as SF, including rampant retail theft.
The costs are just as bad as the Bay Area.
The roads are worse than those in Bay Area, and I didn't think that was possible without snow and ice.
Lots of tourists, which could be a negative for some people.
The schools are so-so.
It's Texas and abortion is illegal.
Fewer batshit insane people than LA but more than Denver. And anyone can CCW or open carry without any documentation. If you have no criminal record, you can buy a handgun over at Academy without any waiting period at all.
Property taxes are absurd. If you think Palo Alto is bad...
APD is critically underfunded, understaffed by 200-250 officers, morale is terrible, and non-life-threatening calls have a 48 hour backlog. If you have an AirTag on an item, it's stolen, and the location is known, the police won't lift a finger. There is zero routine traffic enforcement.
Crowded with 2nd- and 3rd-tier school tech bros, corporate clones, and dumb money lazy people... people who are simultaneously uncool and boring.
Don't go to Whole Foods because it screams conspicuous consumption. The HQ is unimpressive.
There isn't much of a tech scene compared to the Bay Area.
On positive notes: Even though TX-35 is a national gerrymandering joke reaching from downtown Austin to downtown San Antonio by an "umbilical cord" along I-35, Greg Casar is one of the most reasonable, ballsy, sharp, empathetic, and progressive reps in Congress.
H-E-B.
There are a few used bookstores still in operation.
Plenty of vinyl shops, although none compares to Discogs.
Absurd number of tall people compared to anywhere else in the US and the world, including Oslo.
The comedy writes itself.
All of the complaints listed here (hot weather, shit-tier public transit, etc) were true of Austin prior to the Great Migration.
Everyone wanted in though because Austin is the first place people think of when they think of Texas, it's the only major city in Texas with rolling hills, it's perceived as the only non-conservative city in Texas (it is not), 6th St and Barton Springs are fun, and Texas has no income tax and cheap real estate.
Now that real estate prices in Austin are significantly higher than they were in the past, a self-induced problem BTW!, and the Real Texas Heat™ has finally come, folks want to move back. (Property tax rates in Texas have always been high, and they only go up every year.)
Austin was always a small town with Texas government and a huge school with a huge American football team (UT Austin). I don't think it was designed with the explosive growth that it has seen in the last 15 years.
Its road design is proof of this. US Interstate 35 cuts right through town and it only has one partial ring road (TX-130). It also has the MoPAC (TX-1), though that expanded and, consequently, became a partial toll road.
Compare this with Houston, where I live. It has three huge interstates going through it (US I-10 east-west; US-45 north-south; Texas I-69/US Hwy 59 SW-NE), one huge and constantly problematic interstate beltway (US I-610) and two state ring roads (TX-8; TX-99). It is designed to accommodate and move a significant population (or significant freight, which it does also). Austin has always been overrated IMO.
Houston is way bigger, more liberal and diverse (in every dimension, not just race, but it is extremely racially-integrated) than Austin has ever been and has a world-class food scene but gets 1/10th of the hype because...actually, I have no idea why?
Dallas is also way bigger than Austin and actually has a tech scene of sorts (though it is old and enterprise-y) along with more moderate (but still hot) weather but didn't boom like Austin did. Why?
SF paper had a longer treatment of the report 2 days ago https://www.sfgate.com/local/article/california-transplants-... and it links to the original, paywalled report.
This is just ridiculous (unless intentional hyperbole that I misunderstood, in which case sorry!).
Wiki Austin climate reality check: https://en.wikipedia.org/wiki/Austin,_Texas#Climate
If you have to move to 2023 Austin then you have to be ready for highs over 100 for 36 of the last 37 days, and the remaining day it was 99.
It's 86F there right now. At midnight. Most coastal Californians think 86 is a fatal atmospheric condition.
https://www.wunderground.com/history/monthly/us/tx/austin/KA...
I barely handle over 90f for few days
https://weatherspark.com/h/y/8004/2023/Historical-Weather-du...
I moved away from Austin in the late 80s partly to get away from the heat, and it's gotten steadily worse since: The heat island is more profound now that Austin is so much bigger, climate change is happening, and El Nino made the summer of 2023 in Texas unbearable. Keep in mind these temperatures are accompanied by very high humidity.
And if you think the heat is uncomfortable in Austin, in Houston it's moreso.
If they can't even handle Austin, I don't blame them.
ERCOT wholesale prices in the Day Ahead market average around $30 / MWh, peaking at $5000/MWh in June for 1 hr.
Plus, youre talking spot markets, not day ahead. Most electricity is sold in the day ahead markets, which isn't anywhere near those prices.
But hey, continue suggesting people are actually paying $50/kWh without sharing any additional context. Being truly genuine, I see.
I did the math based on my usage last month. I pay $0.06/kWh for electricity cost (not including delivery, just energy). Most of my usage is after those peak hours, as my car charges and pool pumps run and we do our laundry and dishwasher and what not over the evening or early morning. Even at that rate my REP probably made money off me, as they would have still been ahead assuming they were properly buying in the day ahead markets. And in the fall when rates often go negative they'll make a lot of my usage getting paid both ways on the transaction. What do you pay for electricity?
Oh yeah, and my plan is 100% renewable purchase. What mix is yours?