Lower-income folks are leaving, and affluent people are coming – H/T Richard:
Over a million more people moved out of California from 2006 to 2016 than moved in, according to a new report, due mainly to the high cost of housing that hits lower-income people the hardest.
“A strong economy can also be dysfunctional,” noted the report, a project of Next 10 and Beacon Economics. Housing costs are much higher in California than in other states, yet wages for workers in the lower income brackets aren’t. And the state attracts more highly-educated high-earners who can afford pricey homes.
There are many reasons for the housing crunch, but the lack of new construction may be the most significant. According to the report, from 2008 to 2017, an average of 24.7 new housing permits were filed for every 100 new residents in California. That’s well below the national average of 43.1 permits per 100 people.
If this trend persists, the researchers argued, analysts forecast the state will be about 3 million homes short by 2025.
What does it mean?
California homeowners spend an average of 21.9% of their income on housing costs, the 49th worst in the nation, while renters spend 32.8%, the 48th worst. The median rent statewide in 2016 was $1,375, which is 40.2% higher than the national average. And the median home price was — wait for it — more than double that of the national average.
One coping strategy: California residents are more likely to double up. Nearly 14% of renter households had more than one person per bedroom, the highest reading for this category in the nation.
Coping can also mean leaving.
In a separate analysis, Realtor.com found that the number of people searching real estate listings in the 16 top California markets compared to people living there and searching elsewhere was more than double that of other areas — and growing.
And in those areas — counties including Santa Clara, San Mateo and Los Angeles — the growth in views of listings on Realtor.com was virtually unchanged compared to a year ago this spring, while views of listings in other U.S. areas were 15% higher.Link to Full Article
Interesting that the net $ income migration is still very negative even though high income is moving in.
Wow! Excellent link, WC Varones!
This got me thinking that even though more “rich” people are moving into California (San Diego), they can only consume so much stuff, individually.
Meaning that one millionaire can only eat so many hamburgers or buy so many shirts or drive so many miles, etc.
Whereas if middle to lower income people are leaving, then there is less consumption going on and thereby less tax revenue from this mass of people buying stuff here in CA!
Everyone still wants government services and that money will have to come from somewhere!
“Meaning that one millionaire can only eat so many hamburgers or buy so many shirts or drive so many miles, etc.”
Reminds me of someone saying to me, “why do they need such a big yacht/private jet? Expensive horses? What a waste of money! That money could be used to help poor folks.”
My counter-point was, rich folks need a support network to function. A yacht requires a navigator, crew, and continuous upkeep. A private jet, the same. A massive mansion needs staff. The horses don’t feed, groom, or treat themselves when they get sick. They need land to romp on, and property taxes to support their romp land. Private schools and tutors are a whole industry built around rich folks. Those teacher’s would never make that kind of money without rich people creating the network of jobs. There’s a LOT of money going back into the private sector for… everything. I won’t get into the CRAPload of money they drop into charitable organizations, without which, those organizations would fold their tents, or at least be severely hampered by just regular joe donations. St. Judes for Children, for example because I know a little about it, wouldn’t be anywhere near as effective, or be able to hire all the employees to make it run, without a relative small number of rich folks making sure they always have a nice day. Also, rich folks pay the majority of all the taxes collected in this great state.
Point being, they ain’t just eating hamburgers and going home.
Anyone think Jay Leno’s garage runs itself? He’s got a VERY well paid administrative staff and support crew outside your view in that massive warehouse of his. Costs money, and requires expertise to upkeep a Stanley Steamer, or a 1966 Lincoln Continental to keep it showroom pretty AND ready to drive. He owns a lot more than that as a self-employed museum curator of historic cars–all on his dime, not the governments. Check the credit list of his car show. The government didn’t do that. Jay’s paying the checks.
Again, I go back to, rich people aren’t like you and me, and to try to frame them as anything like us will trip your logic at the starting gate. Rich people create a truckload of jobs, many well paying jobs. Without filthy rich people, it would suck azz around here. Many of them may be jerks, but we need them. Also, some of them are some of the best people you’ll ever meet in your life.
Usually in the news you only hear about the rich crapheads. The good ones are rarely in the news, if ever. There is a massive “shadow network” of well financed “good deeds,” as well as expensive “pet projects” nobody but family and close friends will ever know about. Because that’s how good rich folks tend to roll. They do a LOT more that’s great, than average folks think they do.
At this point I leave my signature tag line.
The Great Bifurcation proceeds apace.
What this shows is that economic mobility in California has seized up.
Lets just rephrase Horace Greely’s 19th century
comment into go east young man.
Thanks, daytrip! Excellent way to point out the many ways that “the rich” can help the overall CA economy.
Although, wouldn’t this lead to a kind of “serfdom”? Where only the rich own all the land, homes and resources?
The peasants still need an affordable place to hang their hats, while in service of the rich.
“Although, wouldn’t this lead to a kind of “serfdom”? Where only the rich own all the land, homes and resources?”
In prime areas, yep.
The majority of Californians don’t seem to have a problem with that. I notice they complain, but what else can they do? Register as a republican?
Kidding! I was kidding! Ha ha. That will never happen, I was just kidding.