California is home to scores of iconic sites, dreamy beaches, amazing scenery, top-tier infrastructure, and unique job opportunities. What’s more, it has the fifth-largest economy in the world.
So why on earth are so many people moving out of California?
Who would leave such a state, and why?
Answers for these questions, and more, in this article.
How Many People Are Leaving California?
According to data from the California Department of Finance, California had a net loss of 249,200 residents in 2021 [source] due to 360,000 people leaving the state this year [source].
And according to the Public Policy Institute of California, since 2010, a total of 7.5 million people have moved from California to other states, while only 5.8 million people have moved to California from other parts of the country. This has resulted in a net loss of 1.625 million domestic migrants over the last 10 years [source].
California has been losing more residents than it has gained through migration since 2011.
This trend has accelerated since 2016, with more people leaving the state than moving in from other countries. Despite a natural population increase, the state’s population growth has not been able to keep up with the loss of residents through migration.
In 2020-2021, international migration to California decreased significantly due to travel restrictions and visa processing suspensions, resulting in a net loss of 249,200 residents for the state.
Net migration is the difference between the number of people moving into a state and the number of people moving out of a state. It is calculated by subtracting the number of people leaving a state (out-migration) from the number of people moving into a state (in-migration).
For example, if a state has 100 people move in and 80 people move out, the net migration for that state would be 20 (100 in-migrants – 80 out-migrants = 20 net migrants).
Net migration data is typically compiled and reported by government agencies, such as the U.S. Census Bureau or state-level departments of finance or demography.
Below is the table of California’s net migration statistics based on the most recent data from the State of California’s Department of Finance.
|2010 to 2011||68,240|
|2011 to 2012||94,183|
|2012 to 2013||35,085|
|2013 to 2014||47,453|
|2014 to 2015||21,782|
|2015 to 2016||-14,585|
|2016 to 2017||-16,052|
|2017 to 2018||-43,587|
|2018 to 2019||-130,475|
|2019 to 2020||-144,780|
|2020 to 2021||-249,239|
Source: California Department of Finance
Why Are People Leaving California? the Main Reasons
California is facing a population drain as residents are leaving the state. The main reasons for this “California Exodus” are high taxes, unaffordable housing, political issues and social and economic issues such as high homelessness rate and the impact of COVID-19 on small businesses.
Let’s explore these reasons (and more) in details below.
1. Rising State Taxes
The current top marginal income tax rate is 13.3% but legislators want to raise to nearly 17%.
The move would not only affect rich California residents but also small business owners, many of whom are still struggling due to COVID-19-related shutdowns and restrictions.
The sales tax is already over 7% and there is a 50-cent gas tax. What’s more, California residents can’t even deduct most of their state taxes from their federal taxes thanks to President Trump’s Tax Cuts and Jobs Act.
While other states also have high tax rates, California is one of only two states with a tax rate of over 10% (the other being Hawaii).
What does this mean in real life? Here are some examples:
- A person who makes $50,000 a year would have to pay $9,679 in state and federal taxes.
- A person who makes $100,000 a year would have to shell out $28,923.
- Those who make $500,000 a year would have to pay a whopping $210,949!
To make matters worse, California state legislators are now talking about retroactive taxes and even an “exit tax” for rich state residents who ditch California for greener pastures.
AB2088 seeks to not only institute a wealth tax in the state but also force rich former California residents to pay the tax for up to ten years after they’ve moved out.
2. Housing Crisis
According to the latest data from Zillow, the median cost of a house in California is a whopping $760,644.0 which makes California the most expensive state in this regard.
And according to same data the average rent in Los Angeles in 2023 is $2,916, while it’s $3100 in San Francisco, way more than the national average of $1,980.
Put simply, if you’re not rich or willing to live with friends or relatives, you just can’t afford to live in the state.
Local jurisdictions in California hold enormous sway over what gets built. Officials have often caved to NIMBY (not in my backyard) pressure against new development, much of it in the name of protecting the environment or preserving “neighborhood character”.
California has had a long-term housing shortage for a number of reasons:
Long-term homeowners hold sway over local city councils, encouraging them to prohibit the construction of new housing projects in the name of “preserving neighborhood character” or “protecting the environment”. Outdated zoning laws make it impossible for cities to build dense urban areas; in fact, three-quarters of all the residential land available in Los Angeles can only be used for building single-family homes.
Many Californians attempted to get around these problems by building homes out of town; sadly, these homes are often constructed in areas that have been devastated by recent fires. More on the wildfires issue later.
3. Political Problems
Many California residents strongly support their state’s policies. However, many conservative and even moderate voters feel the state is moving too far to the left.
Conservative journalist Ben Shapiro recently commented on his personal decision to leave the state, citing growing union influence, restrictions on law enforcement officials, looting, and the end of standardized testing in state universities as some of the reasons he’s moving to another state.
Others say they feel their vote doesn’t count in California while still others complain that politicians cater to the needs of large cities without considering the needs and wishes of rural residents.
COVID-19 lockdowns in the state have put an additional strain on residents.
As of April 2020, 19% of the state’s workers had filed for unemployment. While some industries have re-opened, others are hampered by continued restrictions.
Restricted businesses include restaurants, bars, gyms, personal care services, and the tourism/hospitality industry.
Other states don’t have as many COVID-19-related restrictions as California does, leading many small business owners to seriously consider moving to a state where their business has a higher chance of long-term success in their opinion.
4. Social and Economic Problems
California has more than 150,000 homeless people, more than any other state.
Some of them are mentally ill and/or addicted to drugs. They wander the streets, defecating where and when they please. They expose themselves in areas where they can be seen by children. And many other problems that residents report.
Former residents note that homeless individuals can be seen all over town, even in wealthy residential areas. Others complain that homeless encampments have risen in suburban areas across the state.
Many former state residents feel that the state government is either not doing what’s needed to solve the problem or is actually making the problem worse.
It’s not uncommon to see human poop in the state’s largest cities, with San Francisco winning the award as the “the doo-doo capital of the U.S“.
Former state residents note that the large homeless population is to blame for the problem and accuse the state government of not doing enough to address the issue. Others have expressed concerns about the spread of diseases in large homeless encampments that don’t have proper sanitary facilities.
Violent crime is on the rise and many feel the COVID-19 lockdowns are to blame for the problem.
While some people think that California is slashing police budgets as rioters run around town unchecked, others complain about state laws that make it difficult for people to take matters into their own hands in the wake of an attempted robbery. Former residents also blame prosecutors, accusing them of letting criminals run free.
This reason plays a role in the acceleration of the California outmigration as people are seeking security and stability, as well as affordable housing, in other states.
7. Devastating Wildfires.
As of October 2020, over 8500 fires burned almost 2 million hectares of land in California. This makes 2020 the biggest wildfires season in California’s history!
Former residents that moved out of California express frustration over the fact that the fires aren’t likely to become less dangerous in the near future. Others say they’ll leave if their home burns down one more time as they simply can’t take the cycle of continual rebuilding and destruction.
What’s more, the fires don’t just impact those in rural areas. California’s largest cities were blanketed with thick smoke as the fires raged, forcing urban residents to stay indoors until the fires subsided.
8. Ease of Working from Home
Remote workers don’t have to live in California to work for a California-based company, and many are opting to move to cities with a lower cost of living.
In fact, a recent survey found up to 43% of California residents who can work from anywhere are thinking about picking up stakes and heading for greener pastures.
Even the recent fall in housing prices apparently isn’t enough to make up for the fact that state residents can often save money by moving to a state with a lower tax rate.
Who’s Leaving California?
Most pundits agree that it’s mostly middle and low-income people who are leaving the state. It’s not hard to see why. It’s difficult if not impossible for middle and low-class workers to find a decent place to live in any of California’s big cities. What’s more, the cost of groceries, utilities, and transportation is higher than the national average.
Recent statistics show that most people who split the state earn less than $30,000 a year. What’s more, well over 450,000 of these individuals don’t have a college degree. Conversely, most of the people moving into California are educated and expect to earn more than $50,000 a year.
At the same time, it’s not just poor and middle-class Californians who have discovered that the Golden State isn’t as shiny and promising as it looks. Even upper-class media industry workers and wealthy individuals are leaving the state for one reason or another.
Celebrities Leaving California
Celebrities that have opted to split the Golden State include:
- Joe Rogan: Famous podcast host Joe Rogan is leaving California for good and moving to Texas. The reasons he gives for his move include ridiculous lockdown regulations, high taxes, and the ongoing homeless crisis. He notes that several of his friends are likewise moving out of the state for the same reasons.
- Mark Wahlberg: The famous actor left California in October 2022. He explained that the main reasons were that he wanted to work from home and pursue his kids’ dreams. He and his family had been living in California for over ten years, but he felt that the state was not providing enough opportunities for him or his family. Wahlberg plans to move his family to Las Vegas, where he has purchased a home for $15.6 million. He also plans to build a studio and other businesses in the state.
- Chris Hemsworth: Living in Hollywood would be a dream for many people. Not to Chris Hemsworth. The internationally acclaimed actor recently ditched California to move back to his native Australia. The reason he gives for his move is Hollywood’s “suffocating atmosphere” and a desire to live someplace that does not revolve around the movie industry.
- Kanye West and Kim Kardashian: Kanye West and Kim Kardashian are reportedly moving to Wyoming. They’ve already bought property in the state and started touring the local schools. Kanye seems to be the driving force behind the move as California’s Draconian business regulations make it hard for an innovator like him to work or even engage in charitable projects. However, both Kim and Kanye will benefit as they’ll save literally millions of dollars on taxes by moving out of state.
- Ryan Reynolds and Blake Lively: Surprisingly, this couple is one of the few celebrity couples that don’t seem to be thinking about taxes when deciding where to live. Their chosen home state of New York has a tax rate similar to that of the Golden State. Even so, Lively and Reynolds clearly feel that New York is the best place to raise their kids.
- Graham Stephan: Graham Stephan credits Los Angeles for his meteoric rise to success as a real estate investor. However, he recently told his fans that he’s leaving for Nevada. It’s a move he had been contemplating for some time but the tipping point apparently came when he visited friends in Nevada, took a look at available real estate, and was pleasantly impressed by the lack of traffic and overall neighborhood cleanliness. You can watch his video where he explains everything about the California problems and his decision to move out of the state down below.
And here is the update on that video where Graham goes over the benefits that he’s been experiencing by leaving California for Nevada if you’re interested in that side of the story too.
Where Are Former California Residents Moving?
Former California residents can be found all over the United States. Even so, some states seem to be more popular than others. Here are the five states most popular with California’s former residents:
- Texas: More than 500,000 California residents moved to Texas in 2019 alone.
- Arizona: Arizona has seen an influx of close to 70,000 California residents in 2018 alone.
- Washington: Washington is pretty liberal but it’s not as bad as California. More than 55,000 California residents moved there in 2018 alone.
- Nevada: Over 50,000 former California residents now call this state home.
- Oregon: More than 43,000 California residents moved here in 2018 alone.
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