I feel the earth move under my feet, I feel the sky tumbling, a'tumbling down ... (Quakes and Fires ...):
For the half-century after World War II, California represented the epitome of middle-class America on the move. As people poured into the state in search of good weather and the lure of single-family homes with backyard orange trees, the state embarked on a vast natural engineering project that redirected northern water southward, creating the modern Southern California and making the state the most populous in the nation.
Those days are long gone. For more than three decades, California has seen a net outflow of residents to other states, as less expensive southern cities like Phoenix, Houston and Raleigh supplant those of the Golden State as beacons of opportunity. California still has a hold on the national imagination: It has lots of jobs and great weather, along with the glamour of Hollywood and the inventiveness of Silicon Valley.
Still, for many Californians, the question is always sitting there: Is this worth it? Natural disasters are a moment to take stock and rethink the dream. But in the end, the calculation almost always comes down to cost. ...
California was once a migration magnet, but since 2010 the state has lost more than two million residents 25 and older, including 220,000 who moved to Texas, according to census data. Arizona and Nevada have each welcomed about 180,000 California expatriates since the start of the decade. ...
California has 40 million people and has grown through much worse. ...
Two million divided by 40 million is 5% in out-migration. That seems fairly large to me. But, I don't think the numbers include in-migration so net migration is likely lower.
The theme of the article is that if it wasn't so dang expensive in California the residents might ride out the disasters. But many are in disequilibrium (i.e., the value of the amenities is lower than the cost of living) and moving out. Here is one of the earlier papers looking at this: Berger and Blomquist, J. Urban Econ. (1992).
And it might get worse:
Right now it is the Republican tax plan that is causing people to rethink their finances and ultimately where they want to live. The plan, while still a work in progress, is almost certain to land harder on California and other heavily Democratic states if it passes. The state’s median home cost is $500,000, twice the national level, and for decades residents have softened the blow from high home prices and high state and city taxes by using generous federal deductions that lower their taxes.
Curious as to how this might change Californians’ outlook, Redfin, a national real estate brokerage firm based in Seattle, recently asked a sample of 900 homeowners if they would consider moving if they could no longer deduct state and local taxes. Some 37 percent of Californians said they would consider it. Californians looking elsewhere are already among the most popular searches on the Redfin website.
The first paragraph might be misleading, I don't think the mortgage deduction is in the GOP tax bill. It is the deduction for state and local taxes that will hurt Californians. Getting rid of the mortgage deduction (i.e., rich person's housing subsidy) is probably a good idea. My public finance is too rusty for me to figure out if getting rid of the deduction for state and local taxes is a good idea.
