Leaving California - A Wall Street Journal Explanation

Finley's piece is based on recent findings from the U.S. Census American Community Survey that show who is leaving the Golden State, and who is not. Similar findings were reported here based on reports from San-Francisco based real-estate firm Trulia.

(M)ost of California's outward-bound migrants are low- to middle-income, with relatively little education...Their median household income is about $40,000—two-thirds of the statewide median—and about 95% earn less than $80,000.

But contrary to conservative lore, there has been no millionaires' march to Texas or other states with no income tax. In fact, since 2005 California has experienced a net in-migration of households earning more than $200,000

Finley points the blame squarely on Sacramento lawmakers for the out-migration as one might expect from the Wall Street Journal editorial board.

(I)t is ironic that many of the intended beneficiaries of California's liberal government are running for the state line—and that progressive policies appear to be what's driving them away.

While she rightfully points to restrictive municipal zoning laws for increasing housing costs, she misses the main reason for those laws, attributing them to attempting to control "suburban sprawl". Finley probably had 'urban growth boundaries' in mind - but far more common is zoning that restricts higher density housing and mixed-used developments that keep property values and rents high, and add to suburban sprawl as opposed to controlling it.

As Harvard public-policy professor Daniel Shoag documents in a working paper, land restrictions became common in high-income enclaves during the 1970s—coinciding with the burgeoning of California's real-estate bubble—and have increased income-based segregation and inequality.

Indeed - "liberal" groups like Public Advocates have taken on restrictive zoning and growth control ordinances in those "high income enclaves" such as Pleasanton and Menlo Park in an effort to increase the supply of affordable housing.

Finley points to the attractiveness of Houston's low housing values - lower than Fresno's - but unlike that city's nearly 15% unemployment rate, Houston's rate is 6%.

Editor's Note: For another counterargument to Finley's claims see Ed Kilgore's post in Washington Monthly.