The Great California Exodus
online.wsj.com
online.wsj.com
Property values aren't set by the Government; they're driven by -- surprise -- supply and demand. There's only so much land in the nicest parts of the state, and since the residents of those areas control zoning ordinances through their local governments, they have every incentive to restrict supply as much as they can to protect their own property values -- typically under the guise of "protecting neighborhoods" from those who would build more dense housing.
Proposition 13 (1978) was also a big win for incumbent homeowners. It forces property tax assessments to be based on the initial purchase price, regardless of the current actual value. This incents longtime residents to hold on to their homes, even if a smaller home (or a home otherwise more convenient to them) would better suit them in the present, because moving could result in significantly higher property taxes. This starves the housing market of liquidity and also restricts supply.
TL;DR: Property owners' selfishness, codified into State and local law, is the real cause of middle class misery in California.
This isn't really true in the case of California real estate, because the government restricts supply through height limitations. See Edward Glaeser's The Triumph of the City and Matt Yglesias's The Rent is Too Damn High for deeper discussions of the issue.
Maybe its a good thing people are leaving, I want this state all to myself.
So I agree with at least part of this article. California is a suboptimal place for a young middle-class family.
Specifically because they could not afford owning a comfortable home here.
It's a very real phenomenon.
I wonder why companies don't take advantage of this?
For instance, put your startup in the San Joaquin valley. That doesn't have the cultural attractions of, say, the San Francisco area--but that's easy to deal with. During the week everyone should be busy with work. For the weekends, it's a couple hours drive to the Bay Area and you are saving so much in cost of living that you can easily afford hotel and restaurant costs for frequent weekends away.
Now I the things that I see around me change the entire world for the better. When I travel thousands of miles away I see people using things made by people that I personally know. This is powerful and I'm glad that my kids are growing up someplace where the expectation is to change the world, not become a stripper.
Or check out a PINES library (http://www.georgialibraries.org/public/pines.php), which is part of a very inspiring statewide project that spawned an open source library system (http://www.evergreen-ils.org/) used all over the world.
http://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&#...
Quite an exodus we have got here. In fact not only is California the most populous state by far, its population is rising steadily and showing absolutely no sign of slowing down.
The rest of the WSJ article is just the usual half-witted raving against regulation and environmental initiatives.
http://www.census.gov/prod/2003pubs/censr-8.pdf
Net migration data from 1995 to 2000 for California:
Inmigration: 1,448,964. Outmigration: 2,202,500. Net migration: -755,536.
Note that it is titled "The Great California Exodus". Sorry but you cannot say that a state that is steadily gaining in population is suffering a great exodus.
Then they imply that this great exodus is evidence of some kind of dysfunction. Sorry but it is utterly normal for a state that is getting more populous and more crowded every year to have out migration.
So perhaps if taken in a very limited interpretation the statistics they made in the article are correct, but if you use that same limited interpretation those statistics do not support any of the later conclusions or, more accurately, ravings of the article. Thus, the article is still misleading, or basically lying with statistics.
Just out of curiosity, would you say that a fictional state whose economy grows by $10B with exports of $5B and imports of $1B has a trade imbalance in favor of exports?
Sure you would, because in judging trade balance the relevant factors are imports and exports. You don't really care how much the economy grew in the same period.
Similarly, this article is discussing the migration status of California and attempting to explain the net outmigration with some conjecture. Countering by pointing out that the state's population has grown seems like an effort to shut down the argument by actively avoiding the data. It's not surprising that population growth by ever-increasing lifespans, birth, illegal immigration (NTTIAWWT), and other factors exceeds the shortfall caused by outmigration.
The way I see it, the article is attempting to explain the net outmigration with what are at least plausible conclusions, whether or not you agree with them. I'm interested in hearing your alternate explanation.
They have a very specific metric: "net migration to/from other states," and even for that I am not sure their data is correct.
Even if it is true, there is a much more logical explanation. Note that California is the most populous state in the nation, and is surrounded by many much less populous states. There is always a natural tendency for some people to go from populated areas to less populated areas. This is why America got settled in the first place for Pete's sake. Were the initial 13 colonies dysfunctional? No, but they got crowded and people started looking for opportunities elsewhere.
Naturally with higher population densities, real estate and certain other resources will be more expensive. Naturally, people that prefer to have more space will look for places where those things are cheaper. So there is a perfectly logical reason why 'some' people will tend to leave higher density states, not because they are dysfunctional but because they are higher density.
And since the WSJ statistics apparently include only 'some' people, than that is a much more logical explanation than assuming all kinds of dysfunctions.
You say, "There is always a natural tendency for some people to go from populated areas to less populated areas."
According to the 2007 data represented at the URL below (which I have not traced to its source, but I wouldn't be surprised if it too leverages Census data in some fashion), there does not seem to be much correlation between population and migration.
http://www.pewsocialtrends.org/2008/12/17/u-s-migration-flow... (Warning: Flash required)
The greatest net outmigration is Alaska with a net migration of -60,000 and a population of 683,000. Meanwhile, many states with populations between 5M and 20M had net inmigration.
While it seems plausible that there could be a natural tendency to migrate from high population to low population; the reverse seems just as plausible. California had a relatively high population when it had net positive migration. Texas currently has a high population and a net positive migration.
It seems clear to me that more significant variables are at play than just a desire to switch density levels.
Are those causes dysfunctions? Maybe; I suppose it depends on what you consider dysfunctional. Another poster in this thread pointed out that California's Proposition 13 is a distorting influence. Is it dysfunctional? If you own property, you probably think Proposition 13 is a good thing. If you do not, you probably disagree.
Seems pretty consistent with California's population growth to me given how popular California is with immigrants from outside the U.S.
2010 California GDP per capita $51,914
2010 Texas GDP per capita $45,940
2010 California GDP $1,936,400,000,000 (#1 in the nation, 13.34% of total US GDP)
2010 Texas GDP $1,207,432,000,000 (#2 in the nation, 7.95% of total US GDP)
Although the exodus does signal a change, it's not going to affect California's economy as much as, say, Gov. Brown's policies. Perhaps the wsj author knows this? He might be attempting to bias Gov. Brown's policies with this posturing...
Secondly, I don't believe an exodus of the middle class means anything!
Take either the cynical view that they couldn't influence politics anyway.
Or take the generous view that they were happy with politics but couldn't afford to stay.
If the middle class gets up in arms about politics, you _hear_ about it. Admittedly, as a rule the middle class is pretty content. Choosing to move out-of-state is more about employment opportunities, life events, or even random whims before politics enters the equation (for the middle class; I wish I had a solid source to provide actual poll data on that).
Finally, rent prices in the Bay Area might be an important discussion to have. So, how about some concrete historical data, a google maps mashup, or even plain old advertising (i.e. come live in Atherton, our rent went down last year! Note: I don't actually live in Atherton, that's a joke.)
If your job is in Manhattan Beach, the same data for that area is probably available, but the LA and Bay Area housing economies are pretty much independent.
(Meanwhile, I'll keep enjoying my wonderful life here in CA.)