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L.A., San Francisco Lead California Exodus: Why Are We Here?

California Exodus

California Exodus

Hari Raghavan and his wife chose to relocate to the East Coast late last year after living in the Bay Area for over seven years.

It was because of the high expense of living and urban crime in California that they decided to leave. As a result, they compiled a short list of possible relocation destinations before settling on Miami due to its pleasant climate and perception of a higher level of safety.

Raghavan claimed that his Oakland home had been burglarized four times and that his wife contacted him every day during her seven-minute walk home from the BART station because she felt safer with someone on the phone before the pandemic started. Once in Miami, Raghavan and his family left their garage door open one day and returned home to find nothing had been stolen.

As a result, “we took a hard look at why we’re back in the Bay Area now that we’re no longer required to be here if you want to work in tech or start-ups.” Raghavan commented.

As far as quality of life, local or social policies or expense of living are concerned, he didn’t find much to like. As a result, he says, “we had to reconsider where we wanted to reside.”

During the first year of the epidemic, there was an increase in the number of persons fleeing coastal California. Even after the COVID limits were lifted, new data shows that the problem persists.

According to a survey from the Federal Reserve Bank of Chicago, which examined data from moving company United Van Lines, California ranks second in the country for outbound moves — a phenomenon that has exploded during the pandemic. California’s outbound mobility rate was 56% between 2018 and 2019. In 2020-21, that rate jumped to over 60%.

According to the survey, a large number of Californians are moving to Texas, Virginia, Washington, and Florida because of changes in work-life balance, the availability of remote work, and the increasing number of people who decide to abandon their jobs. According to the California Department of Finance, the state lost more than 352,000 citizens between April 2020 and January 2022.

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According to a recent Redfin research, homebuyers are fleeing San Francisco and Los Angeles because of skyrocketing living and housing costs.

Phoenix, Las Vegas, San Diego, San Antonio, and Dallas have seen a spike in the number of Angelenos fleeing to these and other nearby cities. There has been an increase in the number of Los Angeles citizens who have decided to leave the city, according to the research.

High housing costs have been plaguing California, according to Matthew Kahn, an economics professor at the University of Southern California (USC). The epidemic and the rise of remote employment combined to encourage wealthy families to relocate.

As a result of the state’s environmental policies, “we’re not creating enough homes in desirable downtown locations,” Kahn stated. As a result, many middle-class residents are priced out of the city and forced to commute considerable distances.” Because we lack road pricing to alleviate traffic congestion, these inconveniences continue to mount. “Many of these folks… say ‘enough,’ and move to a cheaper metropolitan area when the option of working from home is made available.”

In addition, Kahn said that urban crime, a growing unhoused population, public school quality, and overall quality of life are driving out residents.

New York City and San Francisco, he claimed, have a lot of “fights” over who gets into which elite public schools. There will always be a method for the wealthy to hide in their bubble, but the middle class will feel pressured to leave if their standard of living is deteriorating.

For his part, Redfin Chief Economist Daryl Fairweather pointed to a study from June that examined how a monthly budget of $2,500 affected the purchasing power of a homebuyer. At a 3% interest rate, only 11.2% of homes in Los Angeles were within that budget’s reach, but in Houston and Phoenix, that number rose to 72 percent and 50 percent, respectively.

He remarked, “It’s an affordability issue,” Fairweather. In California, where single-family zoning has been a priority for the longest period, residents tend to stay in their homes because their property taxes don’t represent the genuine worth.” People have little choice but to relocate outside of California because of the state’s severe housing shortage.”

Losing residents since the late 20th century has been a problem for California, which reached 37 million people by 2000 despite a population gain in that period, the Public Policy Institute of California reports. New Hampshire saw its first loss of a congressional seat in its history in 2021, with a population growth of 5.8 percent between 2010 and 2020, compared to the national growth rate of 6.8 percent.

According to UCLA economics expert Lee Ohanian, California has relied on immigration over the past two decades to counteract its population drop, but that flow has also decreased.

The epidemic compounded delays in processing migration petitions to the United States, resulting in the lowest levels of immigration in decades, according to U.S. Census data.

Between 2020 and 2021, 244,000 new immigrants are expected to arrive, which is less than half of the 477,000 new arrivals between 2019 and 2020 and a dramatic decrease from the more than 1 million new arrivals between 2015 and 2016.

When it comes to the state’s middle class, the National Association of Realtors has reported that the national median home sales price has hit a record high of $416,000, according to Ohanian’s research. There has been a significant increase in California’s median home price to more than $1 million.

State and local governments as well as the federal government provide financial assistance to low- and moderate-income residents in California, which puts the state in jeopardy of becoming a haven for the very wealthy as well as the very poor. For individuals earning the $78,000 household median income and trying to make ends meet, we should be concerned. Especially if they are interested in purchasing a home.”

According to the Public Policy Institute of California, Los Angeles County and rural areas of the state have seen population growth stall, while Orange County, Sacramento, and sections of the Bay Area have seen minor gains.

Fairweather has noted a decrease in the number of reasonably priced rental properties in Los Angeles since she last resided there in 2016.

While Santa Monica and Beverly Hills were formerly prohibitively pricey, affordable houses could be found on the Eastside. As a result, you had to find housing in the South Central neighborhood.” Nowhere within a two-hour drive of downtown Los Angeles can be considered reasonably priced anymore.”

Kenny Phung, a native of the San Francisco Bay Area, decided to leave California last fall after his girlfriend accepted a nursing position in Portland, Ore., because of the high cost of renting. He was paying $3,600 per month in Los Angeles but discovered a two-bedroom apartment in Portland for less than half that price. At a San Jose-based company that permits him to work from home, he is currently a project manager.

Phung opined, “It didn’t make sense.” Is there any need for me to go to California if I’m working from home and spending a ridiculous amount of money for such a small space?

As for housing, Raghavan explained that the city of Miami, with its many skyscrapers and more reasonably priced apartments, as well as its well-paved roads and superior infrastructure and services, played a significant role in his choice to leave California.

According to him, “The Bay Area has become a land of tiny inconveniences, as well as those that are not so minor anymore.” Everything is affected by housing and real estate. Restaurants have to pay more rent, which raises food prices, and people have to travel long distances to get to their destinations. A load of everything grows.

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