Why Americans Stopped Moving to the Richest States | Hacker News Reader

Why Americans Stopped Moving to the Richest States

theatlantic.com

63 pointsjseliger58 comments

While it can give you some insight, I'm wary of this kind of state-level analysis of migration, since the conclusions aren't necessarily the same if you look at movement on a more fine-grained scale. States are big places (well, some are). Texas is not very wealthy on average, for example, but some parts of it are much wealthier than other parts. And people are generally moving to the richer parts, not the poorer parts: the largest population increases are in counties that rank in the top-50 highest-income counties in the country (Collin County, Fort Bend County, etc.). Therefore assuming someone moving to Texas is moving to some kind of 'median Texas' is an oversimplification that might produce misleading conclusions.

It's possible people are still typically moving from wealthier to poorer areas (e.g. from Manhattan to Dallas), but we'd need more specific data than state-level flows to conclude that.

That's a great point. I'm pretty sure the term of art for this would be an http://en.wikipedia.org/wiki/Ecological_fallacy

> "Americans are moving far less often than in the past, and when they do migrate it is typically no longer from places with low wages to places with higher wages"

Might have something to do with the aging population and baby boomers retiring. When you stop working, you no longer need to migrate to where the jobs are. Surprised the article didn't mention this.

Housing prices are still recovering from the crash as well. Lots of people are still underwater and/or their home would sell at a loss compared to 7-8 years ago. Moving means taking accepting that loss.

Exactly. Being underwater on a house means not being able to pull up sticks and just move. Strategic default might get you clear of the house, but your credit rating (and therefore your ability to rent) will be trashed.

Over the last 10 years, salaries have largely flattened out and while in increase in people in given area has meant demand didn't. Cost of living being high and getting higher and salaries aren't able to keep up means people don't move there.

Why struggle, working 16 hour days to move up in a career so you can afford the $700k 2000 sq ft home on a postage stamp sized property in a so-so part of town when you can move to Arkansas, work at a remote development shop and afford a $350k 4000 sq ft home in a gated community with and acre and a half of wooded property with an in-ground pool?

> Why struggle, working 16 hour days to move up in a career so you can afford the $700k 2000 sq ft home on a postage stamp sized property in a so-so part of town when you can move to Arkansas, work at a remote development shop and afford a $350k 4000 sq ft home in a gated community with and acre and a half of wooded property with an in-ground pool?

That's a pretty big strawman. There are tons of other options for someone , and not all of us and our families need 4000 sq ft (or even 2000 sq ft) and 1.5 acres of property to be happy. I like living in densely populated areas rather than the equivalent of a personal ivory tower.

I think that American dream of owning a big house with a huge amount of property has done more harm than good.

I'm just presenting a possible equation that describes the phenomenon in question.

Lots of people ask themselves similar questions, but with different metrics.

- Why live in an old 400 sq ft efficiency with exposed ductwork and pipes <80th st. Manhattan when I can live 15 minutes away in Williamsburg and have a modern 2 bedroom for the same price?

- Why live in SF, making below market wages working for some startup, renting a bedroom in some guy's basement, when I could live in a deluxe 3rd floor walkup in Sunnyvale?

- Why live in either place when I can take a dev job near Miami and enjoy round the year sun and beach, own a house and have a better cost of living anyway?

I'm not saying I agree with these questions, or the motivations behind them. But then again, I live in a very walkable, high service suburb instead of the nearest big metro area also. But I'd just as happily live in a small 2 br in NY. I grew up pretty rural and remember asking myself questions like

- Why do I have to spend 2+ hours a day driving to/from work every day?

- Wouldn't it be nice if I could live in a place where I could walk 5-10 minutes to get any of my basic services taken care of?

- Wouldn't it be great to live in a place where I simply didn't need a car?

- I'd like to have more people nearby to associate with.

- etc.

So I get the desire both ways.

You seem to be suggesting that 2000sf is small, but to me that seems huge. I live in a 1200sf house in Minneapolis with my wife. When we move, we'll probably be looking at houses slightly larger (so we can fit a grand piano), but we definitely don't need 2000sf, much less 4000!

It's amazing how big newer housing is, and in location that aren't that far from older, smaller housing that costs only slightly less.

For example, in my area, there's a sizable development that was built during the 50s and 60s. The average home is under 2000 sq ft and pretty nice for the time (lots of split levels). 3 or 4 bedroom etc. Lots are .25 to .5 acre. But being older homes you can't, for example, fit a king bed in any of those homes. Or modern bathrooms, where 2 people can get ready in the morning at the same time don't exist there. You might be able to cram a grand piano into one of the larger basements, with nothing else, or replace the family room with it in a tight squeeze.

The crime rate is up in this area, and last year a woman was found chopped up and stuffed into a set of suitcases that were dumped behind some dumpsters at the nearest McDonalds. Schools are old and run down, they just shut down the last remaining library, there's 1 public pool and though shopping is plentiful, it's all a 15-20 minute drive away.

The next area over was built in the early 2000s during the boom and the town houses start at 2400 sq ft. It's almost insane. A smaller single family with a finished basement starts at around 3200 sq ft and the average size is pushing up on 4000 sq ft. Lots are about .25 acre.

The difference in price between the two locations is $0 for the town houses and about $100-150 for the smaller single-family.

I'd also add that the schools in the newer area are all new and very nice, shopping is better, there's convenient walking to local town centers, public transport to the metro system and the nearest cities. The neighborhoods are all fiber internet have in-neighborhood police/fire "public safety centers", several neighborhood pools and plentiful community activities -- among other amenities.

So all things being equal, you may not be happier with the larger home, but it doesn't hurt, and the neighborhood is a lot nicer.

My friend just moved to Kansas City and purchased a house for $42k, all cash. It's a good house, ok neighbors, and ok living. Now he sit's at home, hacking away at a startup we are working on. I am moving to Palm Spring soon, for much of the same reason. If you make your money online, why not live cheep, at least while you are starting out.

I'm curious, does he have a family? Although I like the idea of moving somewhere cheap, persuading my family that this is a good idea is quite impossible :)

Yeah, thats my problem. I want to live somewhere boring and cheap, because all I need is a place to live within walking distance of a grocery and a good internet connection. My wife on the other hand is concerned about things like weather, and fun things to do.

From the house that you described your friend buying, it's probably in the downtown part of Kansas City. The Kansas City School District lost accreditation 2 years ago, meaning colleges don't have to accept diplomas awarded by any of the schools in the district. Not exactly the sort of place you'd want your children growing up, if you have any.

Yeah, I totally agree. If you have kids or family, this is probably not the route to go. I am personally not a fan of Kansas City. My buddy did not have family when he decided to move from San Diego to Kansas City, so it was easy for him. He moved for the Google Fiber :)

As for me, my wife and I work together. She's my partner on most of my crazy business schemes, and we are in agreement about the move to the high desert area. We are moving to a house with solar panels (and battery storage) and trucked in water and gas. So, it's completely off the grid. I am still trying to figure out the internet, so far it looks like I'll be VPNing through a t-mobile phone ;)

I think once we have kids, we would have about 3 year grace period to get our act together. You can raise a 3 year old anywhere, but once they are older you really do need to worry about things like schools, playgrounds, kid friendly neighborhoods, and all those things. We intend to come back to San Diego in the end, no matter what.

> My buddy did not have family when he decided to move from San Diego to Kansas City, so it was easy for him. He moved for the Google Fiber :)

If I were in his position, I would've waited for Google Fiber to launch in Austin (this year) and then moved there, or just moved now into an area that's going to get Google Fiber. It's a much nicer city - a lot of young people thanks to UT Austin (meaning a good dating scene), vibrant downtown culture, and a strong ecosystem of tech companies and startups (for a city that's not SF, NY, Boston or Seattle, anyway).

You're preaching to the choir. I made that argument. Personally I would move to Povo, Utah (not well research, so don't judge if Povo actually sucks). I like the nature and the climate of Utah better. But Austin is perfect for going out, culture, and large tech community. Kansas is perfect if you intend to live in your house, sit online, and not really interact with the other residents. I have actually visited Kansas City, it's not as bad as one might think, or much worse, depending on your outlook on hipsters. It's got a lot of people who, I swear, are living in Kansas ironically. The 30-somethings with philosophy degrees, black socks to their knees, smoking thin cigarets out of their sterling silver cigaret cases, and generally looking cool just for the sake of looking cool.

It was very strange to see a large, metropolitan city, on Tuesday, during daytime, around noon, completely and utterly empty. As if a zombi apocalypse rolled through and everyone was killed. That is Downtown Kansas City. I am not even kidding, I have pictures somewhere.

> Personally I would move to Povo, Utah (not well research, so don't judge if Povo actually sucks). I like the nature and the climate of Utah better.

Right, Provo is another option. But my distaste for warm climates is only eclipsed by my distaste for religion, particularly fundamentalist ones like Mormonism. Provo is home to BYU and the largest Missionary Training Center for the LDS church. I don't mind religious people too much if they keep to themselves, but I can only imagine how often you would get accosted in public in Provo by "missionaries in training" trying to practice their "pitch". I'd be willing to tolerate the heat in Austin if it meant avoiding that.

Hmm, I did not know that about Povo. I am religious my self, but of the live and let live, nondenominational, type. I would not want to live in a place where people try to convert me all the time. That's something to consider.

"Some of America's most productive cities for medium- and low-income families—Boston, Honolulu, San Jose, New York—are also the most expensive. This is often due to (or at least, exacerbated by) exclusionary zoning and housing regulations that limit the number of available units, which drives up the price of housing, ensuring that low-income families can't afford to live there."

Bingo.

Real estate right now is basically Satan. Anything that can be done to break real estate markets is good.

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>a certain percentage are poor because their moral character is defective

That's really not fair in my opinion. You could say the same about the wealthy. I grew up in relative poverty in a wealthy environment and I really would say that character deficits can be found in the same percentages across the board. The difference may be that the wealthy don't have a need to expose their desperation in such public ways and if you're thinking of things like thievery and drug abuse you may be seeing things through a certain lens (not to assume anything about you personally).

"There are a lot of people that are just defective by habit, character, moral values, work ethic, and will never get better."

I can't quite remember that saying about pots and kettles. Anyone know what I'm talking about?

"I’ve seen people put up donation pages to help them buy PS3s or a House and random strangers donated. So I figured what do I have to lose in asking the following: Are you a bitcoin billionaire? Have a fraction of a bitcoin to spare? Help a designer out and send them my way: 15XeyenVEmfYsL2wBF3PrTZhRtMCbvQ2DR"

My god. Look at you calling poor people filth while begging for money. I changed my mind: I really hope my neighborhood has priced you out.

That's exactly what I think. The overpaid upper middle class are forcing out the poor. Most of them don't mind because of their extraordinary egos and beliefs in eugenics and social Darwinism that they're not introspective enough to recognize as such.

Middle class incomes have been static if not declining for a long while now.

Oh, right, it's the upper-middle salariat who are overpaid, and not the capitalist class itself.

That's nice for you. And yet, those of us with those ever-so-nice white-collar software jobs would still like to pay less than $1500/month for a one-bedroom apartment. Actually, we'd really prefer to pay less than a single $1000/month for a one-bedroom apartment. Seems to me that a rental real-estate price rise, groundswell or bubble, interferes with that.

I blame NIMBYs. Landowners in rich cities stop anything that might bring down the value of their property, especially additional housing.

If the housing prices are increasing, it would mean that demand is increasing. But if so many people are leaving, demand should be decreasing and prices should be soft.

So I'd be curious to know how the survey was conducted, and whether it included families immigrating to the US.

In my county, Alameda, Ca., 30% of residents were born outside the US. That's a very strong immigration level and bound to affect the housing prices and keep demand and prices strong.

If the housing prices are increasing, it would mean that demand is increasing. But if so many people are leaving, demand should be decreasing and prices should be soft.

Housing has a few problems. One is that it's price inelastic. If you destroyed 5% of the housing in Manhattan, prices and rents would at least double, and possibly go up 4-10x. We know this because of the 9/11 Boom (which was actually fueled by speculators anticipating future supply destruction-- which, thankfully, never came). It's counterintuitive, but something that objectively destroys value can (with inelasticity) increase the bulk value of what's out there. If 5% of housing was destroyed and prices doubled, most people would say that the housing market "improved by 90%". Well, no.

Increasing housing prices are, make no mistake, signs of something bad. Supply problems (mostly, rooted in NIMBY regulations) are a big part of what's going wrong. Another issue is that most localities are losing jobs, while a few "star cities" (SF, NYC) win.

The second problem with housing is that, because people are emotional about it, they don't sell when there is cause for prices to go down. They hoard. This negative correlation between price and volume means that housing prices barely drop when they're "supposed to", but drop cataclysmically when the real estate problem starts destroying real wealth (as in 2008) and jobs disappear and foreclosures happen.

Real estate is the blood-engorged cancer of the economy. It's a tax that goes nowhere and anyone who thinks high rents and property prices is good is just on the wrong side.

I've been looking to move in the near future, and I'm trying to find a city with a good nightlife and good job prospects that doesn't have insane housing costs if you live in the city and insane commute times if you live outside. I'm not making a ton of money where I am right now, but anywhere I'm looking at for tech jobs I'd be taking a pay cut even if my salary doubled because cost of living is so high. Housing in cities is just insane, and investment money slash NIMBY isn't helping.

Not to sound flippant, but so are you and everybody else. I have yet to read anywhere on the Internet that someone is looking for a boring town that's dedicated solely to cars with cheap housing and crap for jobs. What you seek is in very high demand, especially with the nascent trend of moving back into cities so it will be quite expensive relative to what you get.

NIMBYism accounts for a lot because people hate change and people moved somewhere for a specific aesthetic but simple market demand accomplishes a lot.

Three years ago we made a move against this trend. We moved from a large metropolitan tech-heavy area to a low-cost but rural and isolated area. It has lots of problem - no jobs, lots of poverty, etc, but if you are entrepreneurial and can figure out how to either travel for your work or make your location irrelevant, lots of places otherwise ignored suddenly become practical.

There are plenty of people looking for just that, and most sites I've seen dedicated to housing news focus around nice places to retire, places to raise kids, places to live cheaply but with no jobs (this house only costs $280,000 with an average city salary of $38,000!).

I live in a medium sized Midwestern city with a burgeoning job market and plenty of restaurants/breweries/nightlife. I have a two bedroom apartment for less than $700/mo and it takes me less than 10 minutes to get downtown at 5pm. Meals for two cost $30 at a local restaurant with local beer. What I make isn't a lot, but it's a good deal over $38,000. That has to exist somewhere else too. I love my city, but I'm looking for new people and cultures (and I'm tired of -25F winters).

America does many things well, but it does not do cities well. So many of our "cities" are little more than a glorified suburb ringed by an arbitrary boundary.

In far too many cases that boundary is simply insurmountable traffic.

If you're single, in tech, and not in NY or SF... you shouldn't have any trouble with housing costs.

Anyway, take a look at Chicago.

Have you checked out Portland, Oregon?

Austin, TX is worth considering. Lower cost of living, especially with a (less than insane) commute. The city even gave itself the moniker "Silicon Hills" in the '90's, and there's a thriving tech & startup industry in the area.

>especially with a (less than insane) commute

Worth noting that this is quickly going away. Traffic is projected to get far, far worse over the next few years at current growth rates and public transit is still very disappointing in comparison to other large cities.

That said I love this city.

Check out Charleson, South Carolina. Amazing quality of life and a heck of a tech scene. Search for Charleston Digital Corridor.

Pittsburgh, maybe?

It's a tax that goes nowhere

Much like Bitcoin and electricity! Your housing is cheap until someone else wants it; then the two of you bid to tie up wealth :)

Prices can rise without demand increasing, if there is a reduction in supply. This is exactly what is happening in many housing markets in the US, due to underwater homeowners not putting their houses up for sale when they otherwise would. This causes people who would otherwise move to stay put at lousy jobs, tying into the narrative of the article.

The numbers don't lie: there is a significantly decreased supply of houses for sale compared to previous years. This is the only thing propping the still-inflated housing prices up, courtesy of the bullshit government policy of obsessing over people acquiring huge amounts of debt for "the American dream" (whatever the fuck that is).

My twin brother and his wife recently bought into the wonderful northern Virginia (dc suburb) housing bubble. They are now paying a mortgage on a $500,000 duplex, ignoring the fact that they are paying more to borrow the money to own the house than they would have paid to just borrow the house (aka rent it). The difference is high enough that investing the savings of renting over mortgage in the stock market would far outstrip any value they will get from the home in even optimistic house price inflation scenarios.

Me? My family of 4 (i'm the sole breadwinner) are renting, and I'm now considering excellent job offers in other states and cities, with no concern of a bank-forged chain to prevent me from moving to a better life.

Problem is demand is increasing at a far greater rate than the supply. In fact, I think this is -- among several other factors -- one of the primary causes of this migration.

The money an individual or a family has to spend is limited. For most, the rent is their single biggest expense: the less one makes, the more one has to give up (in terms of money that would go to savings, basic necessities, or food/entertainment) to live in a more desirable place.

Given that income distributions even with some amount of redistribution will still follow a power curve, it is quite possible that certain highly desirable areas -- themselves on a power curve of desirability -- might see great population growth, but -- on the whole -- the movement would not be to those areas. That is, unless, the supply of housing in those ares can keep up with the demand.

This makes sense, but it is a moving target and the situation of over-supply/under-supply (or more likely the degree of under-supply) will go through cycles. Under-supply will likely be served at some point by developers, save hostile zoning as Michael points out. In SV, there are several very large projects where 50 acre(?) office parks have been torn down and are being replaced by tract homes on postage stamp-sized lots. So clearly, these developers are banking on sustained or recovering demand. A lot of that demand is foreign: http://www.cnbc.com/id/101168745 and more is driven by the wealth creation at Google, Apple, Facebook, LinkedIn, Twitter, et al. : (2011) http://www.bloomberg.com/news/2011-06-15/tech-ipos-boost-dem...

Prices are really pretty incredible. Here are charts for Palo Alto, Los Altos, Mountain View and a couple of others. What is astonishing is that these are communities with 50,000 - 100,000 residents. Not small enclaves. Yet the 'median' price exceeds $2,000,000 in Los Altos: http://www.siliconvalleymls.info/blog/

On a national, inflation adjusted basis, prices are about where they were at a peak in 1990: http://www.jparsons.net/housingbubble/

So at least here in the valley, the homes are currently being purchased at incredible prices by wealthy immigrants and newly-minted millionaire-techies.

It has been a fairly common occurrence that people who have owned homes in Silicon Valley for many years reach retirement age and cash out. Then move to Oregon, Arizona, Reno or just further inland, and live well.

Does anyone know more about the Equality of Opportunity project? I'm trying to navigate their site to figure out the methodology for determining their numbers.

At this point, I'm not willing to believe that all of the cities with the highest rents also have the highest upward mobility. I'm assuming that they just found the places where the upwardly mobile either 1. moved to or 2. grew up in during the cities' transitions into rich cities from struggling cities (an awful lot of cities went through that transition in the last 50 years.)

That would still be interesting stat, but say nothing about the chances for someone moving into the city now, who would be faced with crippling rents and 3 applicants for every open position.

I think people are moving away from unlivable cites to livable cities, and that there's lots of reverse migration to get closer to extended families. I'm considering the same.

edit: I still can't figure it out, this is the closest I could find - http://www.equality-of-opportunity.org/index.php/faq-s. I'll email to find out if they accounted for migration.

This article is crap. When the evidence does not fit your theory you don't complain about the evidence: Stupid American don't want to move to the rust belt and get rich!

Perhaps ideology is getting in the way of thinking. What about cost of living, actual job opening, baby boomers retiring, skills mismatches, cultural preferences, etc.

BTW-Internal migration has actually been studied for more than a century. This recent paper from the Fed has a good survey:

http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.25.3.173

WTF?! This entire article is predicated on a Atlas Van Lines survey. Atlas is an expensive moving company used only by corporate/govt and fairly wealthy customers. How is this representative in the least. Maybe for a survey showing where the wealthy are retiring or businesses are trying to establish themselves in new markets.

The article shows the right approach in their leading graphics but then ignores it. Show where people renting cheap U-Haul type moving trucks are moving or no-name movers to find out where the bulk of average to lower income and/or young people are moving. That's the trend you want to look at.

I'm assuming ND, MT, and maybe TX are due to the shale oil boom?

TX has a lot going for it. According to the census bureau [0], lots of people are finding opportunities there (nearly half of the 15 cities in the link are there). It helps that there's no (state) income tax [1]. It's a right-to-work state [2], I tend to favor that but YMMV. Lastly, while some areas are seeing looming bankruptcies of major municipalities [3], Texas is seeing surpluses. Yes, some of this is oil, but that's ignoring a host of other factors.

--------------------

[0] http://www.census.gov/newsroom/releases/archives/population/...

[1] http://en.wikipedia.org/wiki/State_income_tax#States_with_no...

[2] http://en.wikipedia.org/wiki/Right-to-work_law#U.S._states_w...

[3] http://www.usatoday.com/story/news/nation/2013/05/15/ten-cal...

Is there a decent estimate of what proportion of the TX state budget comes from oil & gas? One number I can find is that oil & gas direct extraction taxes amount to 15% of the state budget ($7 billion out of $47 billion). But that's a lower bound, since the oil & gas sector also generates considerable additional tax revenue, through corporate income taxes, sales taxes, hotel taxes, etc.

Besides good fortune, though, TX did make two good oil & gas decisions that CA didn't, one on purpose and one accidentally: #1, on purpose, to actually have an oil & gas severance tax, like Alaska and Wyoming, but unlike California, which foolishly levies no tax on extraction; and #2, accidentally, to keep some large oil reserves publicly owned, and put them in the hands of the University of Texas system (accidentally because UT was given huge tracts of ranch land before it was known there was oil on it).

ND and MT yes. TX has been on a roll and is just starting to gear up with the fracking.

ND is expanding in the west to the point it is affecting infrastructure projects in the eastern side of the state. Too few skilled workers to do the projects since most are doing the oil thing.

ND and MT, probably yes. TX is just TX being awesome.

Texas is... well Texas.

Some things are awesome, some things aren't:

* Highest percentage of employees at / below minimum wage [1]

* Highest percentage of uninsured [2]

* 4th highest poverty rate [3]

* Lowest percentage of high school graduates [4]

* 4th most citizens in jails / prisons per capita [5]

* Most CO2 emissions [6]

* 6th highest obesity rate [7]

They have a lot of work to do before I'd consider them awesome (I say this as someone who's spending a lot of time there, and will potentially be relocating with a company there in the near future.)

[1] - http://www.bls.gov/ro6/fax/minwage_tx.htm

[2] - http://kff.org/other/state-indicator/total-population/

[3] - http://en.wikipedia.org/wiki/List_of_U.S._states_by_poverty_...

[4] - http://en.wikipedia.org/wiki/List_of_U.S._states_by_educatio...

[5] - http://en.wikipedia.org/wiki/List_of_U.S._states_by_incarcer...

[6] - http://en.wikipedia.org/wiki/List_of_U.S._states_by_carbon_d...

[7] - http://www.cdc.gov/obesity/data/adult.html

Notwithstanding the Awesome, there is plenty of fracking goin' on.

https://en.wikipedia.org/wiki/File:Tight_natural_gas_plays_i...

This meets with my experience, not to mention that north of Amarillo and Midland/Odessa are currently booming, at least as far as can see when I'm out there. Not to downplay the larger cities in the state that are growing.

Are all the improvements 'Public Works', say, highway/freeway construction? That was the feeling I got spending many months of the last two years in Austin & Dallas. Every freeway was being built, expanded or repaired... my GPS was constantly telling me to exit when nothing but dirt & Jersey barriers existed. Cannot recall the source, but I believe all this work is done w/ Fed stimulus + taxes from all the oil/gas they're pumping & petro refining.

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