California exodus

The California exodus is the late 20th century and ongoing 21st century mass emigration of residents and businesses from California to other U.S. states or countries.^[1][2] The term originated in the late 20th century; it resurged in use to describe demographical trends that resulted from the COVID-19 pandemic in California.^[3][4][5] Common reasons for residents leaving California include the high cost of living, crime, politics and traffic,^[6] as well as comparatively high tax levels and a complex regulatory environment for businesses.^[7] Texas is the leading destination of California's former residents,^[6] followed by Arizona.^[8]

Cultural, demographic, and economic shifts in the late 20th century resulted in a perceptible trend of California residents and business emigrating to other states, particularly to Texas, Arizona, Nevada, and states in the northwestern United States.^[9] Articles published in 1989 by the San Francisco Examiner and Knight Ridder, as well as in 1991 by the Los Angeles Times dubbed the phenomenon the "California exodus"^[9][10] and "Great California Exodus".^[11] A 1995 study published in Geographical Review attributed various causes for mass emigration from California:^[12]

Military base closures, businesses abandoning a state regarded as overregulated and tax-unfriendly, and growing unease about the attainability of an idyllic life along the Pacific Slope began a trend that has gained volume and velocity. By late 1992 quality-of-life surveys found residents' perceptions of California had reached an all-time low, with only 30 percent considering the state "one of the best places to live". Social disorders and natural disasters in both southern and northern California further unsettled an economy that had been little more than dyspeptic since 1988 ... Symptoms of more than a substantial malaise, they indicate a great change. The causes of change may be subject to debate, but their galvanizing effect is beyond challenge: Californians began to emigrate.^[12]

According to the San Francisco Examiner, most of those leaving California were people born in the state.^[13] In 1993, the level of emigration from California was the highest in its recorded history.^[14] Consequences from the Dot-com bubble and its ensuing crash also motivated further mass emigration during the late 1990s and early 2000s.^[15] Although the numbers of emigrants exceeded those of immigrants from within the United States, the continued arrival of immigrants from outside the United States led to a general increase in California's population during the 1990s.^[16]

California joined the United States after the Mexican–American War. Like much of the land ceded from Mexico in the war, California had only a small non-Native population.^[18] However, the California Gold Rush led to a population boom, during which California gained statehood in 1850. Between the 1850 and 1860 censuses, its population more than quadrupled. It saw a second period of growth after World War II thanks to the aerospace and defense industries, and a third during the 1980s and early 1990s because of the Silicon Valley tech industry. Population growth slowed in the mid-1990s as the federal government cut aerospace spending after the end of the Cold War, and again after the Great Recession.^{[citation needed]}

The state has had a net loss of domestic migrants every year since about 1989.^[19][17] According to Census Bureau estimates, 6.2 million people left the state in the 2010s decade, while 4.9 million moved in: a net loss of 1.3 million residents.^[20] In 1955–1960, the ten largest state-to-state migration flows involving California all had the state as a recipient of people, while in 1995–2000, nine of the ten largest flows involving the state had California as a net loser, with only New York sending more people to California than it received in return.^[21]

According to the California Department of Finance, the state had 135,600 more people move out than moved in from July 2019 to July 2020, marking the third straight year of net migration losses.^[22] After peaking just shy of 40 million Californians,^[23] by 2020 into 2022 onward this slowing had crossed the zero population growth mark into outright negative population growth for the first time in over a century.^[24]

The exodus worsened in 2021,^[25] when more than 360,000 people moved out of California, especially going to states like Texas, Arizona, Washington, Idaho, and Utah. Some are also moving to Mexico to avoid the 2021–2023 inflation surge, as Mexico's cost of living is lower.^[26] Between April 2020 and July 2022, the state's population dropped by more than 500,000 people.^[27]

In July 2023, California Department of Finance reviewed its population forecast for 2060 and concluded that the state's population would stay constant at about 40 million people, instead of reaching 53 million as estimated in 2013.^[28][29] In October 2023, the Stanford Institute for Economic Policy Research found that California was "hemorrhaging residents to neighboring states like Texas, Arizona, and Nevada" at "higher levels than ever before", across all income levels, and especially among college graduates.^[25][30]

California's population grew in 2023 for the first time since 2020, driven by lower mortality and higher legal foreign immigration.^[31] However, net domestic migration was still negative (91,189 people left for other states)^[32] and the population growth was low (+0.17%).^[33]

The primary cause of the exodus is the high cost of living (and especially the cost of housing), followed by issues such as crime, politics, pollution, and traffic.^[6][25][27] Kenneth P. Miller said in 2022 that taxes, as well as rising costs on housing, food, and other needs and wants, are the biggest reason for Californians leaving the state.^[34] The rise of remote work also made it easier for people to leave California.^[35]

California has repeatedly been ranked as one of the country’s most expensive states to live in. The median asking price for a house was $797,470 in California in 2022, which only a quarter of households in the state can afford.^[26]

Economists have cited restrictive zoning policies and lack of investment in transportation infrastructure that has resulted in sprawl, constrained housing supply, high housing prices, and severe congestion. They also cited over-reliance on sales tax, fees, and disproportionate property taxes on new residents caused by 1978 California Proposition 13.^[36]

In a December 2020 column for the Los Angeles Times, journalist Michael Hiltzik argued that California's slowing population growth was a cause for concern but not a full-blown crisis. Hiltzik quoted demographer Hank Johnson from the Public Policy Institute of California as saying that recent data "is just an incremental change from what we've been seeing over a couple of decades." According to Johnson, California's population trends don't compare to the "hollowing-out" of Rust Belt cities such as Cleveland, Detroit, and St. Louis, which have lost more than half their populations in the last 50 years. Hiltzik instead says that a lack of affordable housing is California's main problem, as it has pushed young people out of the state, and that concerns about over-regulation are being exaggerated.^[19]

According to the Stanford Institute for Economic Policy Research, the climate change policy of California could increase exodus to more lenient states like Arizona and Texas.^[25]

Several businesses, particularly Silicon Valley companies, have moved their headquarters out of California in recent years. Some of the largest businesses that have announced moving their headquarters include Charles Schwab, Oracle, Palantir, and Hewlett Packard Enterprise.^[37] Though they have moved to a variety of other states, Texas has received many of the new headquarters, including those of Hewlett Packard Enterprise and Oracle. In 2024, Chevron announced it would move its headquarters to Houston, Texas from San Ramon, California.^[38]

Businessman Elon Musk moved from California to Texas in late 2020.^[39] Frustrated by California's Covid-19 lockdown policies, Tesla relocated its headquarters to Austin, Texas in 2020 next to the company's gigafactory.^[40] However, in 2023 Tesla announced that it was opening its engineering headquarters back up in Palo Alto.^[41] In 2024, Musk also moved SpaceX's headquarters from Hawthorne, California to Brownsville, Texas, though the company maintains its Hawthorne facility.^[42]

According to research by the Hoover Institution, factors leading to business relocations are "taxes, regulations, litigation costs, labor costs, energy and utility costs, and employee cost of living".^[43] Shopping mall operator Westfield commented that: "A growing number of retailers and businesses are leaving the area due to the unsafe conditions for customers, retailers and employees, coupled with the fact that these significant issues are preventing an economic recovery of the area".^[44] Nordstrom, Whole Foods said they were abandoning San Francisco because of changing economic conditions or employee safety.^[45]

In the 2020 redistricting cycle based on the 2020 census, California lost a seat in the House of Representatives for the first time in its history, going from 53 to 52 seats.^[46][47] In the aftermath of the COVID-19 pandemic, the continued negative growth of the state saw predictions of up to 4-5 seat losses for California in the House of Representatives after the 2030 census, which would shrink its delegation from 52 to 47 seats. This would be the largest decline recorded by any state in one cycle.^[48][49][50]

According to data from the Internal Revenue Service, migration of the taxpayers out of California resulted in California being the biggest income loser ($24 billion) in 2022.^[51]

San Francisco is suffering from the opioid crisis, with the second highest rate of drug deaths of any large city in the country.^[52] Like many other large cities in California, San Francisco also has a large homeless population.^[53] Following the COVID-19 pandemic, many tech workers have embraced remote work, causing about a third of the commercial real estate in downtown San Francisco to be empty.^[54] For example, between 2020 and 2023, nearly 40 retail stores have closed in Union Square’s zip code.^[44] Northface, Zara, and Macy’s closed some of their stores.^[55]

Some observers have theorized that San Francisco could enter a "doom loop", with the downtown portion of the city having only 32% of the cell phone activity as pre-pandemic levels.^[56] Others argue that doom loop claims are exaggerated and that the crisis is isolated to downtown San Francisco rather than citywide and that San Francisco has always been a "boom and bust" city.^[57]

According to US Census estimates, San Francisco's population declined by more than 60 000 people, or more than 7%, from 2020 to 2022.^[44] In 2023, the city's population increased, with the AI boom cited as a contributing factor.^[58]

• Fernandez, Elizabeth (July 3, 1989). "California dreamers: A rude awakening". San Francisco Examiner. pp. 1, 14 – via Newspapers.com.
• Girion, Lisa (January 21, 2001). "Shift Turning Talent Pool Upside Down". Los Angeles Times. pp. 474, 475 – via Newspapers.com.
• McCormick, Erin (September 18, 2000). "The great California exodus of the '90s". San Francisco Examiner. pp. 3, 7 – via Newspapers.com.
• Nussbaum, Paul (August 13, 1989). "Lifestyle in southern California spurs exodus". Honolulu Star Advertiser. Knight Ridder. p. 29 – via Newspapers.com.
• Starrs, Paul F.; Wright, John B. (October 1995). "Great Basin Growth and the Withering of California's Pacific Idyll". Geographical Review. 85 (4). Francis & Taylor: 417–435. Bibcode:1995GeoRv..85..417S. doi:10.2307/215918. JSTOR 215918 – via JSTOR.