California exodus? Not so fast says new resident relocation report

The pandemic did change some historical patterns and San Francisco experienced a unique and dramatic exodus, research finds.

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Image: iStock/melpomenem

Last year, a number of Silicon Valley companies left the area for emerging tech hubs in other states. Hewlett Packard and Oracle announced plans to move their headquarters to the Lone Star State and SpaceX and Tesla CEO Elon Musk announced that he had moved to Texas. Additionally, an Upwork report released in October found that up to 23 million U.S. households plan to relocate due to remote work and U.S. "near-term migration" rates could be up to "four times what they normally are."

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On Thursday, California Policy Labs released a report outlining relocation data for counties across California. Turns out, the speculated en masse California exodus hasn't unfolded, but intrastate relocations are aplenty.

"While a mass exodus from California clearly didn't happen in 2020, the pandemic did change some historical patterns, for example, fewer people moved into the state to replace those who left," said Natalie Holmes, a research fellow at the California Policy Lab and a graduate student at the Goldman School of Public Policy at UC Berkeley.

"At the county level, however, San Francisco is experiencing a unique and dramatic exodus, which is causing 50% or 100% increases in Bay Area in-migration for some counties in the Sierras," Holmes continued.

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California relocation data

Overall, the report's findings are based on the University of California Consumer Credit Panel dataset made up of "quarterly credit and residency information," which the organization plans to utilize as a way to "inform the state's understanding of mobility, wildfire impacts, financial well-being, and student loans," according to CPL.

While the data doesn't suggest Californians are fleeing the state in droves, residents are leaving certain counties in large numbers. This is especially true in areas synonymous with high-tech employment and high costs of living a la San Francisco.

The report includes a chart detailing county exits and entrances from the fourth quarter of last year. During this time period, San Francisco County saw a 918.9% increase in net exits compared to 2019 with 20,612 net exits, 35,855 exits overall and 15,243 entrances, according to the CPL dataset. Compared to 2019, change in entrances decreased 24.6% with 7.2% of the population moving in general, per CPL.

SEE: Silicon Valley exodus? The majority of professionals said they'd follow tech leaders to emerging tech hubs (TechRepublic)

Santa Clara County, another location listed as a Bay Area economic region, saw a 206.1% increase in net exits compared to 2019 with 15,215 net exits, 38,405 exits overall and 23,190 entrances, according to the dataset. Compared to 2019, change in entrances decreased 15% with 4.8% of the population moving in general, per CPL.

The top locations for individuals leaving San Francisco were Alameda, San Mateo and Marin counties, according to Axios citing San Francisco Chronicle reporting based on United States Postal Service data. It's important to note that these three counties are considered part of the Bay Area economic region in the CPL dataset.

While the data reflects marked intrastate relocations, the report highlights the economic ramifications related to a potential exodus of high-income earners to other states.

"Some folks seem to be worried about the tax implications of wealthy individuals leaving the state, but we don't yet see any dramatic evidence that rich households are fleeing California en masse," said Evan White, executive director of the California Policy Lab at UC Berkeley. 

"Unfortunately, because the state relies heavily on income taxes on the uber-wealthy, the departure of even small numbers of wealthy people could negatively impact revenues if they aren't replaced with new entrants," White said.

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