

The Great California Exodus - wyclif
http://online.wsj.com/article/SB10001424052702304444604577340531861056966.html?mod=opinion_newsreel

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otterley
Classic red herring piece. The author argues that the middle class struggle to
live well in the most temperate parts of the state because property values are
too expensive, then goes off on a tangent about wasteful Government spending
that has absolutely nothing to do with the problem -- other than perhaps
adding to the income tax burden, even though state income tax rates are 1/3rd
of our Federal tax rates.

Property values aren't set by the Government; they're driven by -- surprise --
supply and demand. There's only so much land in the nicest parts of the state,
and since the residents of those areas control zoning ordinances through their
local governments, they have every incentive to restrict supply as much as
they can to protect their own property values -- typically under the guise of
"protecting neighborhoods" from those who would build more dense housing.

Proposition 13 (1978) was also a big win for incumbent homeowners. It forces
property tax assessments to be based on the initial purchase price, regardless
of the current actual value. This incents longtime residents to hold on to
their homes, even if a smaller home (or a home otherwise more convenient to
them) would better suit them in the present, because moving could result in
significantly higher property taxes. This starves the housing market of
liquidity and also restricts supply.

TL;DR: Property owners' selfishness, codified into State and local law, is the
real cause of middle class misery in California.

~~~
jseliger
_Property values aren't set by the Government; they're driven by -- surprise
-- supply and demand._

This isn't really true in the case of California real estate, because the
government restricts supply through height limitations. See Edward Glaeser's
_The Triumph of the City_ and Matt Yglesias's _The Rent is Too Damn High_ for
deeper discussions of the issue.

~~~
nickpinkston
Who lobbied for those limitation and similar ones though? I'm guessing that's
where he's going - the businesses that stand to lose is such high-density,
supply increasing designs were built.

~~~
scarmig
If only. In San Francisco, at least, the biggest anti-density lobby is the
countless neighborhood associations that make it impossible to do anything
that could conceivably alter any aspect of daily life.

~~~
redmeetsblue
I am from out of state and live in the bay area. While I am pretty liberal I
do think that the author has a point with respect to the cost of living, and
abundance of inherited wealth. The only people I know who are buying homes are
inherited millionaires or friends that got lucky picking the right startup.
That said, I also feel like I understand local governments and Californians
position on the issue of maintaining this artificial market. Lets face it This
is a beautiful state, and the local population is trying very hard to
maintains the 1960's charm of the area. At times I feel like I'm choking to
death in overpopulation and an artificial market, but I do appreciate the open
spaces and parks. I don't want to look at high rises, I like the California
coast.

Maybe its a good thing people are leaving, I want this state all to myself.

~~~
otterley
Who's to say you can't have both? Imagine suburban sprawl were discarded in
favor of urban concentration -- there'd be much more open space left to enjoy.

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zinssmeister
having recently moved from Texas to Silicon Valley, and originally being from
Europe, I must say that California is a beautiful place to live. But if I had
kids I would strongly consider going back to Texas or some place else where
I'd get proper housing for a fair price.

So I agree with at least part of this article. California is a suboptimal
place for a young middle-class family.

~~~
waterlesscloud
Leaving out all politics, over the 10 years I've lived here about half of my
friends who have had kids left the state.

Specifically because they could not afford owning a comfortable home here.

It's a very real phenomenon.

~~~
zinssmeister
yup. The quality, size and price of housing here is so far the biggest shock
to me. Basically Texas would give you a free 2000sqf house if you are a dual
income household (just by saving the income tax and rent difference)

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redwood
It is interesting how California north vs south, SF vs LA, SV vs Hollywood,
tech innovation vs media desperation, freedom vs net censorship. All of this
in one state :)

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hristov
As often happens after the News Corp purchase, the Wall street journal is full
of shit. Lets look at the California population shall we:

[http://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&#...</a><p>Quite
an exodus we have got here. In fact not only is California the most populous
state by far, its population is rising steadily and showing absolutely no sign
of slowing down.<p>The rest of the WSJ article is just the usual half-witted
raving against regulation and environmental initiatives.

~~~
bhauer
Interesting, except for the fact that the article is about migration and not
population. Very quickly skimming for a relevant data point yields this piece
from the Census Bureau:

<http://www.census.gov/prod/2003pubs/censr-8.pdf>

Net migration data from 1995 to 2000 for California:

Inmigration: 1,448,964. Outmigration: 2,202,500. Net migration: -755,536.

~~~
hristov
I am sure that they worded their statements in a way that is supported by
selected statistics, but nevertheless, the article is highly misleading.

Note that it is titled "The Great California Exodus". Sorry but you cannot say
that a state that is steadily gaining in population is suffering a great
exodus.

Then they imply that this great exodus is evidence of some kind of
dysfunction. Sorry but it is utterly normal for a state that is getting more
populous and more crowded every year to have out migration.

So perhaps if taken in a very limited interpretation the statistics they made
in the article are correct, but if you use that same limited interpretation
those statistics do not support any of the later conclusions or, more
accurately, ravings of the article. Thus, the article is still misleading, or
basically lying with statistics.

~~~
bhauer
Wait, are data important here or are they not? I thought you were saying the
data were important a moment ago.

Just out of curiosity, would you say that a fictional state whose economy
grows by $10B with exports of $5B and imports of $1B has a trade imbalance in
favor of exports?

Sure you would, because in judging trade balance the relevant factors are
imports and exports. You don't really care how much the economy grew in the
same period.

Similarly, this article is discussing the migration status of California and
attempting to explain the net outmigration with some conjecture. Countering by
pointing out that the state's population has grown seems like an effort to
shut down the argument by actively avoiding the data. It's not surprising that
population growth by ever-increasing lifespans, birth, illegal immigration
(NTTIAWWT), and other factors exceeds the shortfall caused by outmigration.

The way I see it, the article is attempting to explain the net outmigration
with what are at least plausible conclusions, whether or not you agree with
them. I'm interested in hearing your alternate explanation.

~~~
hristov
Net migration includes immigration (legal and illegal). So no they are not
trying to explain net migration, as their data apparently excludes immigration
(although one cannot say for sure, they are very vague and misleading about
what the data says).

They have a very specific metric: "net migration to/from other states," and
even for that I am not sure their data is correct.

Even if it is true, there is a much more logical explanation. Note that
California is the most populous state in the nation, and is surrounded by many
much less populous states. There is always a natural tendency for some people
to go from populated areas to less populated areas. This is why America got
settled in the first place for Pete's sake. Were the initial 13 colonies
dysfunctional? No, but they got crowded and people started looking for
opportunities elsewhere.

Naturally with higher population densities, real estate and certain other
resources will be more expensive. Naturally, people that prefer to have more
space will look for places where those things are cheaper. So there is a
perfectly logical reason why 'some' people will tend to leave higher density
states, not because they are dysfunctional but because they are higher
density.

And since the WSJ statistics apparently include only 'some' people, than that
is a much more logical explanation than assuming all kinds of dysfunctions.

~~~
bhauer
The Census data I cited is net interstate migration. Review the last page of
the PDF I linked. The title of Appendix Table A-1 from which I quoted is
"Domestic Inmigration, Outmigration, and Net Migration: 1995 to 2000." It's
simply the first link I found and as such it's not the same time period as the
WSJ article's subject. But I figured it was a data point that at least
superficially corroborated their admittedly-unknown underlying data. By that,
I mean that it provided sufficient credibility to their discussion and
confirmed it was a matter of migration and not population. From there, I
considered their conclusions at least plausible.

You say, "There is always a natural tendency for some people to go from
populated areas to less populated areas."

According to the 2007 data represented at the URL below (which I have not
traced to its source, but I wouldn't be surprised if it too leverages Census
data in some fashion), there does not seem to be much correlation between
population and migration.

[http://www.pewsocialtrends.org/2008/12/17/u-s-migration-
flow...](http://www.pewsocialtrends.org/2008/12/17/u-s-migration-flows/)
(Warning: Flash required)

The greatest net outmigration is Alaska with a net migration of -60,000 and a
population of 683,000. Meanwhile, many states with populations between 5M and
20M had net inmigration.

While it seems plausible that there could be a natural tendency to migrate
from high population to low population; the reverse seems just as plausible.
California had a relatively high population when it had net positive
migration. Texas currently has a high population and a net positive migration.

It seems clear to me that more significant variables are at play than just a
desire to switch density levels.

Are those causes dysfunctions? Maybe; I suppose it depends on what you
consider dysfunctional. Another poster in this thread pointed out that
California's Proposition 13 is a distorting influence. Is it dysfunctional? If
you own property, you probably think Proposition 13 is a good thing. If you do
not, you probably disagree.

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sounds
First of all, California's economy is not going to be eclipsed by another
state's any time soon. I know, the article doesn't explicitly talk GDP but
hear me out...

    
    
      2010 California GDP per capita $51,914
      2010 Texas GDP per capita      $45,940
      
      2010 California GDP $1,936,400,000,000 (#1 in the nation, 13.34% of total US GDP)
      2010 Texas GDP      $1,207,432,000,000 (#2 in the nation,  7.95% of total US GDP)
    

<http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP>

Although the exodus does signal a change, it's not going to affect
California's economy as much as, say, Gov. Brown's policies. Perhaps the wsj
author knows this? He might be attempting to bias Gov. Brown's policies with
this posturing...

Secondly, I don't believe an exodus of the middle class means anything!

Take either the cynical view that they couldn't influence politics anyway.

Or take the generous view that they were happy with politics but couldn't
afford to stay.

If the middle class gets up in arms about politics, you _hear_ about it.
Admittedly, as a rule the middle class is pretty content. Choosing to move
out-of-state is more about employment opportunities, life events, or even
random whims before politics enters the equation (for the middle class; I wish
I had a solid source to provide actual poll data on that).

Finally, rent prices in the Bay Area might be an important discussion to have.
So, how about some concrete historical data, a google maps mashup, or even
plain old advertising (i.e. come live in Atherton, our rent went down last
year! Note: I don't actually live in Atherton, that's a joke.)

If your job is in Manhattan Beach, the same data for that area is probably
available, but the LA and Bay Area housing economies are pretty much
independent.

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mburshteyn
Lost me at progressive apparatchiks and their cadres cramming the proletariat.

~~~
mburshteyn
This thread has the highest downvoted:upvoted comment ratio I've seen on
HackerNews.

~~~
WiseWeasel
That's what happens when you bring politics and/or religion into the
discussion. It's only a short matter of time before this thread is godwinned.

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rabidsnail
If this is true, then why does my rent keep going up?

~~~
StuffMaster
Development restrictions leading to high rent is mentioned in the article. I
don't know about the rest of the state, but I constantly hear this mentioned
for San Francisco.

~~~
rabidsnail
Development restrictions don't cause existing housing to disappear. If
population were declining, there would be no need for new development.

~~~
Hyena
Housing doesn't need to disappear. If we tried to move everyone in California
closer to the center of its major cities, we'd see prices increase
dramatically.

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jrobbins
This article is 1000% true! California is a terrible, horrible, no good state
and it is getting worse with the passing of every perfect day. Everybody run
for Texas (of all God forsaken places) and nobody new come in please. It's
waaaay too expensive here, it would melt your wallets to even think about it.
Traffic! Earthquakes! Smog! Ooooh, and the liberals with their ideas and
whatnot, tisk, tisk, tisk.

(Meanwhile, I'll keep enjoying my wonderful life here in CA.)

~~~
mtraven
Or, "nobody lives there anymore, it's too crowded"

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mukaiji
My Palo Alto rent is too high, so 4 million people in 20 years isn't enough.

