The results of a recently released survey of Bay Area residents captures the saga of my demographic group. Of the residents surveyed, 46% say they want to leave due to rising housing costs and lower standard of living. Who wants to leave? Newcomers, millennials, and the poor (California in Danger, 2018).
Earlier this year, Mercury News published another article covering the Bay Area Exodus, as it has now been termed by journalists. These articles shine a light on the populations leaving California, but have little to say about who is coming in. The Mercury News article from February 8 mentions this statistic in passing: "Between July 2015 and July 2017, the region gained 44,732 immigrants but lost 44,102 residents to other parts of California." Despite the large number of residents leaving the Bay Area, there is no population crisis. Who are these newcomers filling in the ranks of the fleeing masses?
Earlier this year, Mercury News published another article covering the Bay Area Exodus, as it has now been termed by journalists. These articles shine a light on the populations leaving California, but have little to say about who is coming in. The Mercury News article from February 8 mentions this statistic in passing: "Between July 2015 and July 2017, the region gained 44,732 immigrants but lost 44,102 residents to other parts of California." Despite the large number of residents leaving the Bay Area, there is no population crisis. Who are these newcomers filling in the ranks of the fleeing masses?
To gain more insight into this question, I used the county-to-county migration statistics published each year by the IRS. They can be found here. My code and more details on how I created the figures can be found here.
Although both articles address the Bay Area specifically, I look at migration statistics for the whole state of California to capture more variation in county migration rates. Row 1 of the figure shows each county's share of immigration from low-income, middle-income, and high-income counties in 2005. Each county's median household income is obtained from the 2000 census and cutoffs are the 33rd and 66th percentile of the distribution of county median income. These cutoffs are $31,000 and $37,000.
The same exercise is performed for the second row of figures, but 10 years later.
Two takeaways:
1) Immigration into California is astonishingly segregated by median income level of your origin county.
2) Immigration from middle-income counties is being replaced by immigration from high-income counties. This is especially apparent when you focus on Central California. The dark red counties are spreading to include inland areas previously moved to only by the middle class.
More questions have yet to be answered. How many of these movers come from outside California? Who will fill service sector jobs if the middle class is leaving, but only the upper-class is moving in?
More questions have yet to be answered. How many of these movers come from outside California? Who will fill service sector jobs if the middle class is leaving, but only the upper-class is moving in?
These figures are not encouraging for those advocating affordable housing and measures against gentrification. Despite the mass exodus from the Bay Area and California in general, the demand for California Dreaming is still strong, as seen by the steady numbers of immigrants and their increasing wealth. At least for now the mass exodus does not pose any major threats to population growth or the economy in California, although the exodus is indeed painful for those who need to move. I myself have bid goodbye to several friends who have been priced out.
California governments will have to enact drastic legislation to reverse the current trends. But one must keep in mind that previous drastic legislation has contributed to the current state of things. A discussion on this can spawn at least a dozen more blog posts, but in short, restrictive zoning laws and Prop 13 have driven up housing prices and made living in California prohibitive for younger generations. I often hear (and say myself) that without Prop 13 "my grandparents would not still be able to live here." That is true, and I do not want to take my grandparents' lovely retirement in Marin County away from them. But sadly, I will most likely not be able to live near my grandparents and enjoy their company because I won't be able to afford it here. Striking a balance that benefits both generations is a large order. One goal of this blog is thoughtful and careful discussion of this matter.
California governments will have to enact drastic legislation to reverse the current trends. But one must keep in mind that previous drastic legislation has contributed to the current state of things. A discussion on this can spawn at least a dozen more blog posts, but in short, restrictive zoning laws and Prop 13 have driven up housing prices and made living in California prohibitive for younger generations. I often hear (and say myself) that without Prop 13 "my grandparents would not still be able to live here." That is true, and I do not want to take my grandparents' lovely retirement in Marin County away from them. But sadly, I will most likely not be able to live near my grandparents and enjoy their company because I won't be able to afford it here. Striking a balance that benefits both generations is a large order. One goal of this blog is thoughtful and careful discussion of this matter.
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