California’s population growth began to taper in the 2010s after roughly 60 years of steady increases, driven largely by relentless housing costs that make even the state’s least-expensive communities more expensive than most places across the country, California YIMBY reported.
That stark financial reality gives some households a compelling reason to seek cheaper pastures elsewhere, while effectively barring others from moving to California in the first place.
In the newly released report Priced Out: Relocation Amidst California’s Affordability Crisis, authors Brett Fischer and Evan White of the California Policy Lab deployed anonymized credit records to track who leaves the Golden State, where they settle, how their finances shift afterward, and who continues to arrive.
The data reveals that Californians packing up and leaving the state land in much cheaper neighborhoods, predominantly situated in nearby states, where they experience a notable rise in homeownership rates in subsequent years, according to California YIMBY. Specifically, leavers move to neighborhoods where average monthly housing costs are $672 lower and median home values drop by nearly $396,000.
In their new communities, 60 percent of these former Californians own their homes, compared to just 53 percent in the neighborhoods they left behind. While per-person incomes in these new destinations run about $339 less per month, Fischer and White argue that the drastically lower housing expenses far outweigh the dip in local earnings.
The profile of who is leaving the state has also shifted over time. The share of leavers originating from the highest-income 30 percent of neighborhoods rose by 6.4 percentage points between 2016 and 2019.
Despite coming from affluent areas, these outbound residents often carry heavier financial burdens. They owe $5,500 more in student debt than neighbors who choose to stay, and their credit scores average 17 points below those of their remaining neighbors. This data aligns with a broader pattern of residents seeking a quality of life that has become entirely out of reach at home.
California is facing a two-front demographic squeeze, as declining arrivals compound the impact of outbound migration. Relative to population size, 42 states have sent fewer people to California since 2020 than they did between 2016 and 2019.
In 34 of those states, the drop in people moving to California outpaced any increase in Californians moving their way, widening the state’s net population loss. Geography dictates much of this migration flow, as net migration from California generally declines the farther a state is located. This dynamic helps explain why Nevada ranks first while Texas ranks only 11th among states receiving Californians relative to population size.
Fischer and White argue that declining arrivals deserve far greater attention from lawmakers and that policymakers should actively work to restore California’s appeal to both current residents and newcomers. Because high costs fundamentally shape where leavers go, lowering housing expenses could plausibly help retain neighbors and draw new arrivals, though the report does not test that specific mechanism directly.
