We all know that housing throughout California is some of the most expensive across the nation – but did you realize these high prices have forced hundreds of thousands of low and middle-income workers to relocate to other states? It’s true, and now the state faces a major challenge: how to draw in workers of moderate means to some of the nation’s most expensive markets.
In fact, there seems to be a direct correlation between an individual’s annual income and the likelihood that they’ll move out-of-state. The largest group of people leaving the state were those who made less than $10,000 per year, which saw a net loss of 94,276 or roughly 43% of the total net change in population. This number continues to go down as annual income increases – shown by the net loss of 61,840 individuals making $10,000-$19,999 annually and 46,318 individuals making $20,000-$29,999.
Why are they leaving? Many experts believe the lack of affordable housing has played a key role. According to Coldwell Banker’s Home Listing Report, California holds more than 25 of the nation’s 50 most expensive residential markets, and nine of these markets are in the top 10.
“It’s getting harder and harder for the middle-class Californian to buy a home,” said Jordan Levine, director of economic research at Los Angeles’ Beacon Economics. “People just keep looking for ways to maximize that residential dollar. That attracts people to inland areas of the state and to other states.”
The census data agrees. According to the Census’ Current Population Survey, housing was the third most common reason given for leaving the state over the past 15 years. The only two responses found more common were family and job concerns.
Who’s moving into California? It tends to be those with higher income, with roughly 35% of those moving having an income more than $50,000 annually.
Are you surprised by how low and middle-income residents are leaving California? What can we do to change this ongoing trend?