Gavin Newsom Denies People Are Fleeing His State. The Data Paints A Very Different Picture

Interviewed recently by FOX’s Sean Hannity. California Gov. Gavin Newsom dismissed the notion there’s an exodus of people moving from California to other states.

California’s performance, Newsom said, was better than Mississippi, West Virginia and Louisiana, which have long had slow growth and high outmigration.

Despite incomparable benefits, such as weather, scenic beauty and Silicon Valley innovation more Californians are moving out than moving in. The latest estimates show that in 2022 the state lost 343,000 net domestic migrants. This is nearly a quarter-million improvement over the previous year but it’s still significant. In 2021 and 2022, California lost almost as many people as there are in San Francisco.

Since 2010, California has lost 1.9 million net domestic migrants. The numbers should be alarming.

• The Los Angeles metropolitan area (Los Angeles and Orange Counties) lost 1.25 million net domestic migrants since 2010.
• The San Francisco metropolitan area lost 300,000 net domestic migrants since 2010, more than 70% of that in the last two years.
• The San Diego metropolitan area lost 133,000 since 2010. This is half again the combined loss in the Rust Belt metropolitan areas of Pittsburgh and Buffalo (79,000), with about the same population as San Diego. The San Jose metropolitan area, the heart of Silicon Valley, lost 249,000 net domestic migrants between 2010 and 2022.

The big exception is the inland Riverside-San Bernardino metropolitan area, which gained 149,000 people.

California is losing its population, dropping 1.3% below its 2020 peak. Proportionally, the greatest losses have come from larger core cities (municipalities, rather than metropolitan areas). Los Angeles has lost three times as much from its peak as the state (4.0%). San Jose has lost nearly five times as much from its peak as the state (6.4%) and San Francisco has lost about 5.5 times as much as the state (7.1%).

What’s behind these losses? The simple answer seems to be the high cost of living. According to Bestplaces.com, the cost of living in California is about 50% above the national average, ranging up to 130% more in the San Jose metropolitan area

Paul Ong, director of the Center for Neighborhood Knowledge at the University of California, Los Angeles Luskin School of Political Affairs, says that “housing affordability” is at the top of the list. Indeed, there was a time about 50 years ago that median-income households could afford median-priced houses in California.

Since then, measures adopted by state and local governments severely rationed land for housing, using environmental regulations and urban growth boundaries (or their equivalent).

This strangled land supply while demand continued to grow. Land prices escalated. Housing economists Edward Glaeser (Harvard) and Joseph Gyourko (Wharton) showed that land values in the five-county San Francisco metropolitan area had become 10 times the industry rule of thumb by 2013. They also found that land value premiums generally dwarf house construction differentials.

In its overzealousness to control “urban sprawl,” California has made it virtually impossible to build the houses the middle-class desires at prices they can afford. Yet, California is the least sprawling state, with the highest urban density, according to 2020 Census data. Only 5% of its land is in urban development.

Taxes also contribute to California’s higher cost of living. The Tax Foundation ranked it as having the fifth highest state and local tax burden in 2022. Gas prices are more than one-third higher than the national average, burdening lowest income workers — 75% of whom use cars for work access, 15 times the 5% of transit, according to American Community Survey 2021 — severely.

The exodus seems likely to continue. The Los Angeles Times just found 40% of Californians are seriously considering moving out of the state. California’s high cost of living was the principal reason for 61%. Another 27% cited wanting to live where their political beliefs are better represented.

People generally move for better lives. There is probably no better market test of states than net domestic migration. California’s should be benchmarked against its real competition, such as Florida and Texas, not to states that have historically grown slowly.

While California lost a net 1.9 million net domestic migrants since 2010, Florida gained 2 million. Texas gained 1.7 million. In each case, the difference between California and Florida (3.9 million) and Texas (3.7 million) was greater than the population of 22 individual states.

Quibble about whether it’s an “exodus,” it surely is significant.

Wendell Cox is a public policy consultant and principal of Demographia.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

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