CALIFORNIA, USA — Housing costs, high taxes, traffic and cost of living has some Californians thinking about leaving the Golden State, according to a survey from the Greater Phoenix Economic Council (GPEC).
By the organization’s findings, 56% of Californians have considered leaving the state. The results came from an October survey that gathered 553 responses in California. CEO Chris Camacho said the survey was about understanding the psychology of the knowledge workers and businesses in the area.
The Greater Phoenix Economic Council is a regional economic development organization that focuses on helping guide workers and businesses so they set up shop in Arizona. They’ve had their eyes on California for some time.
Camacho said they’ve seen a “mass exodus” from California for the past 10 years as technology firms, corporate headquarters and manufacturers looked toward lower tax rates, better regulatory environments and better labor pools in other states.
“You have the ocean, you have avocados, you have sushi rolls and we love visiting California…but what Greater Phoenix offers is this kind of top five market in the United States,” he said.
In 2019, 653,000 people left California and about 60,000 went to Arizona. Of the 249 prospects in the GPEC’s business pipeline, 28% are from California.
As for why workers and companies would consider leaving the state, GPEC’s survey found that the cost of living, cost of housing and high taxes topped the list. Asked to pick the top three challenges of living in California, participants responded as follows:
- Cost of Living – 57%
- Cost of Housing – 48%
- High Taxes – 41%
- Natural Disasters – 29%
- Traffic Congestion – 20%
- State and local leadership -20%
“The mainstay is really about housing affordability and what I hear oftentimes from my venture-backed technology companies in the Bay Area is that you can get twice the home for half the cost,” Camacho said.
Sacramento Realtor Kellie Swayne told ABC10 that affordability has plummeted in California over the years, noting that buying and maintaining a home in California is far more expensive than in some other nearby states. She previously told ABC10 that some of her clients were eyeing homes in places like Nevada, Idaho and Arizona.
“When they put the numbers together for what they pay for a mortgage here in Sacramento, compared to Boise, ID, it’s not even a contest to them,” she said.
With remote work more prominent as a result of the coronavirus pandemic, Camacho said they’ve seen software technology teams moving out of the Bay Area and into more affordable places.
“It’s not just those that are seeking lower cost housing, these are knowledge workers. These are tech companies, these are venture capital firms and boutique firms that have spent years in California…and said enough’s enough.”
Camacho said about 10 companies a year move or expand from California to the metro Phoenix region. According to their website, these include Dexcom, Lucid, Titan LED Lighting Solutions, Niagara, Prenexus Health and RJR Technologies, a manufacturer that moved its corporate headquarters from California to Arizona in 2018.
“We’re going to continue to tap the California market because it's continuing to provide a tremendous amount of knowledge workers, and really key institutional companies are moving to the Greater Phoenix region and have been for the past two decades,” he said.
While census data on migration trends for 2020 likely won’t be available until next year, some believe the remote work environment brought about by COVID-19 will spur more migration.
Swayne told ABC10 that she expects an increase in the net exodus from California as a result of COVID-19 due to competitive housing markets and remote work options. Camacho shared a similar sentiment.
“My expectation is that its going to reflect a massive tidal wave, a quiet tidal wave of individuals coming to other sunbelt states,” Camacho said.
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