Why Are People Leaving California?

In recent years, more people have left California for other states than have moved here.  Over the last decade about 6.1 million people left and only 4.9 million people arrived from other parts of the country. The influx of international immigrants, new births and longer life spans had overcome that loss of population until 2020.  In that year the population decline was clearly partially a function of the pandemic. 

However, the underlying issues that have caused slow growth have been much more related to high tax rates and the housing shortage since 2014 that has driven prices to all-time highs. Many wealthy Californians have left in the last two years due to California having the highest marginal state tax rate in the country, 13.3% for incomes over $1 million. Texas has been the most popular destination, being one of few states with no state income tax. Similarly, some large companies have left the state to avoid such high taxes, several choosing to relocate to Texas, which results in many of their employees also moving.

According to United Vans Lines’ National Migration Study in 2020, Californians became 5th among the states with the largest net outbound migration. The greatest factor has been the seeking of more affordable living options, with more than 50% of the people leaving the state due to the high cost of living.  California is now the second most expensive state to live in, with especially high housing and transportation prices.

Nonetheless, a recent study done by the University of California in San Diego has found that the actual number of people wanting to leave the state is not much greater than it has been over the last few years. Based on surveys of 3,000 people they concluded that most residents still believe in the “California dream” and that the state is a great place to live and raise a family. For those who have been moving out of California, though, the UC data found Texas and Washington are the top destinations for the youngest residents, while Nevada and Arizona appeal to the older residents.

In 2020 the top destinations for Californians leaving were: Texas (82,000 people), Arizona (60,000), Nevada (47,000), Washington (47,000), and Oregon (38,000).  Although it seems counterintuitive, it may be of interest to note, however, that in the same year a lot of people moved to California from many of the same states! Texas lost 37,000 people to California, Washington 32,000, Arizona 28,000, Nevada 26,000, and 37,000 moved here from New York in the past year.

In addition to the housing crisis and rising state taxes, there are several other personal and political reasons why people choose to leave California. These include concerns for safety due to violent crime increases, devastating wildfires, various impacts of large homeless encampments, feelings that the state has shifted too far to the left politically, and the ease for many people to be able to work from their home. Some move in order to live closer to family in other states, or for other personal reasons.

It is probable that as long as these obstacles remain in California, the population may continue to cease growing, and people will seek out lower-cost areas of the state or elsewhere to live.