California dreamin’ is becoming a nightmare

California dreamin’ is becoming a nightmare

The people leaving tend to be relatively poor and many lack college degrees.

By Allan Hewitson

Many Canadians are finding the runaway cost of living in some of Canada’s largest cities, especially Vancouver and Toronto, is driving them out of both the home ownership and the rental markets.

In the U.S., it’s a lot more than just the horrendous cost of living that has the nation’s most populous state, California, reeling a bit under a worrying out-migration trend that seems to be picking up,

Climate change, drought and so much devastation from wind-driven wildfires, not to mention the regular rumbles that foment a constant fear of an apocalyptic earthquake, seems to be turning a trickle into a bit of a deluge.

Since the fall the most destructive wildfires in that nation’s history have devastated numerous regions of both northern and southern California, wiping out – at time of writing – more than a thousand homes and other structures and hundreds of thousands of acres of forest and farm land.

Thousands of people have been evacuated from fire regions and many won’t be able to return, as firefighters face the prospect of no relief through Christmas.

This is obviously not a death knell for the Caliornia dream – many thousands of people do and will continue to migrate every year to the west coast for its many beckoning attractions – warm weather, sandy beaches and scenic mountain lifestyles.

But in recent years many of the attractants have been diminished through natural disasters and extreme climate events, but most of all by the rapid increases in the cost of living in the Hollywood state.

Most people don’t want to move away entirely from the warm weather or the entertaining city conveniences of L.A. and San Francisco.

However, the more affordable nature of cities like warmer-weather south-western centres such as Phoenix, Houston, Denver and other sunbelt havens are proving to be drawcards, cities where the cost of living is lower and homes average about half of the cost of inflated California values for a generally better standard of home.

A little reading and research indicates that while many poorer people are indeed leaving, beaten down by the ballooning costs, the largest group of the departing still tends to be middle-aged people making between $100,000 and $200,000 annually, that solid middle class base that is critical to a healthy economy.

Since 2010, the Golden State has seen an overall net outflow guesstimated at $36 billion annually from these migrants.

Benefiting are the places where Californians move, largely Texas, Arizona and Nevada. However, the recent fact that some California employers are joining them in the same places is seen as an not-so-early warning for state officials.

That being said, there’s no real consensus that this view is dominant in California.

The Sacramento Bee newspaper seems happier to see the issue this way in March this year …

“The people leaving tend to be relatively poor and many lack college degrees. Move higher up the income spectrum, and slightly more people are coming than going.

“About 2.5 million people living close to the official poverty line left California for other states from 2005 through 2015, while 1.7 million people at that income level moved in from other states – for a net loss of 800,000.

During the same period, the state experienced a net gain of about 20,000 residents earning at least five times the poverty rate – or $100,000 for a family of three.”

The Bee reports. “Well-paid new arrivals in California enjoy a life that is far out of reach of much of the state’s population. Besides Hawaii and New York, California has the highest cost of living in America.”

This suggests to me that there is a generally-held view that the lower income residents should be gone to make more room for those who can afford it and thus appreciate it.

That is a fact of life that applies across the board to everyone trying to improve their life based on age, health, education and preferences.

Again, to me, it suggests also that it’s a prevalent and pragmatically-accepted view. It’s what is happening to a somewhat different extent in our own largest higher-cost real-estate driven cities – Vancouver, Toronto, Calgary and others.