California's high housing costs drive out poor, middle-income workers

Nearly three-quarters of those who left California for other states since 2007 earn less than $50,000 a year.

(Los Angeles Times)  -  California's high cost of living has pushed hundreds of thousands of low- and middle-income workers to other states, federal data show.

The trend points to a challenge for the state's economy: how to attract workers of moderate means to some of the nation's most expensive housing markets.

The state overall has been losing people to other parts of the country since the 1990s. A snapshot of more recent U.S. Census migration numbers shows that nearly three-quarters of those who have left California for other states since 2007 earn less than $50,000 a year.

Experts point to the state's increasingly unaffordable real estate markets as a major driver of the trends. More than half of the nation's 50 most expensive residential real estate markets are in California, according to Coldwell Banker's Home Listing Report, including nine of the top 10.

"It's getting harder and harder for the middle-class Californian to buy a home," said Jordan Levine, director of economic research at Los Angeles' Beacon Economics, who points to the migration trends as a major hurdle for the state's future economic growth. "People just keep looking for ways to maximize that residential dollar. That attracts people to inland areas of the state and to other states."

Those moving to California tend to have higher incomes. About 35% of working-age people moving in make more than $50,000 annually, compared with 27% of those moving out.

The disparity gets progressively pronounced at the lower end of the income scale.

For those making $40,000 to $49,999, for instance, the net loss of population is 15,403 residents since 2007. The loss is 22,754 residents in the $30,000 to $39,999 range, then more than doubles to 46,318 residents in the $20,000 to $29,999 range.

"Housing prices are a primary factor, because that's usually the first thing you deal with when you're moving," said Dowell Myers, a professor of demography and urban planning at USC.

"Rents are going up very rapidly, as well as housing prices," said Hans Johnson, a migration expert who is a senior fellow at the Public Policy Institute of California. "The economy is booming, but how do you supply housing for the workers who aren't commanding high incomes yet are still in demand?"

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