Boise and Reno capitalize on the California real estate exodus

https://www.bloomberg.com/news/articles/2018-10-23/boise-and-reno-capitalize-on-the-california-real-estate-exodus

by gshakir • 8 years ago

47 93 8 years ago

Speaking for myself, I was glad to escape California. Not only because of real estate, but also because of taxation. A top marginal state tax rate of 13.3%? OUCH!

dxhdr• 8 years ago

Plus a 9.5% / 10.25% sales tax rate if you're fortunate enough to live in LA or Santa Monica. I believe SF is around there as well.

avmich2• 8 years ago

So now we need to compare different apples with different apples again, avoiding comparison of different apples with same oranges?

georgewfraser• 8 years ago

California's total tax burden is 9.5% of income; the median state is Kansas at 8.5% [1]. I was surprised the difference is so small; is there something not captured by these stats?

[1] https://wallethub.com/edu/states-with-highest-lowest-tax-bur...

dahdum• 8 years ago

Inequality isn’t captured, CA relies more heavily on the top earners to fund the budget.

Pfhreak• 8 years ago

That seems.... reasonable to me? (As someone who is in a fairly high tax bracket and who wishes our local taxes were higher on folks like me so we had better services.)

abecedarius3• 8 years ago

It’s much higher than even the second highest, NY.

ap3• 8 years ago

Is there a way you can donate your excess cash to fund the services improvements you want?

Would be cool if you could voluntarily fund specific services (schools/homeless) and lower the tax burden on others

intopieces• 8 years ago

Higher salaries make up for higher taxes. That number you see in your pay statement before taxes was never going to be yours.

protomyth3• 8 years ago

The article talks about two points of resentment. The more serious is people moving to red states not understanding why they are moving and voting for the same type of politicians that they fled from. If you move, at least try to understand your neighbors.

tofof2• 8 years ago

People should vote for whomever they feel best represents their concerns and interests, or whom they think will govern best for their society at large.

If you move, try and understand your neighbors, certainly, but that doesn't mean voting for the candidate that best represents them instead of best representing you.

ip263• 8 years ago

Speaking as a transplant, it's not wrong to ask that transplants at least take a moment to consider why they left home and moved here, when making voting decisions. If you left because of high taxes, voting for tax increases in your new home at least appears misguided.

alexanderwept• 8 years ago

Fair point.

Let me try to steel man the parent comment and maybe you can respond:

These people are fleeing the very predictable consequences of progressive governance, they should make an attempt to understand what made their origin so bad they wanted to leave and what made their destination so good that they decided to move there. If they vote for the policies that led them to flee, they might start the cycle over again.

smadge3• 8 years ago

Can you document the link you claim between liberal policies and high cost of living?

protomyth3• 8 years ago

I guess I would read the article that points out the high taxes to support liberal policies is one reason people are moving.

BurningFrog3• 8 years ago

My impression, if you excuse the broad strokes, is that it's mostly that liberals live in big cities where they have banned housing construction, with resulting exploding housing costs.

onlyrealcuzzo2• 8 years ago

California isn't that expensive if you own a home outright. It's mostly expensive because of Prop 13.

Prop 13 was championed by two Republicans and passed under Reagan.

Yes, California has a 13.3% income tax and a 10% sales tax. That really has little to do with party lines. It has everything to do with Prop 13. If you can't tax old money in real estate, you have to tax something else...

tomcam• 8 years ago

Or you can try living within your means like the rest of us

anonuser123456• 8 years ago

Prop 13 has nothing to do with lack of supply. More supply == lower prices.

sjg007• 8 years ago

Jerry Brown was governor when prop 13 was passed.

masonic3• 8 years ago

  Prop 13 was championed by two Republicans and passed under Reagan.

Wrong. Proposition 13 passed when Jerry Brown was governor and Democrats controlled both the Assembly and Senate.

nostrademons2• 8 years ago

Eh, the California Conveyor Belt has been operating for decades. It's already turned Portland, Boulder, and RTP blue. Next up seem to be Asheville, Reno, Boise, Austin, and possibly even Arizona and Houston.

I have a theory that people's political beliefs are largely manifestations of the behaviors that make sense within their economic system. So Blue America cares a lot about women's rights and abortion access because women are an integral part of the knowledge-worker economy, without which it couldn't function. They care about identity politics and political correctness because the information economy requires close creative work in teams, and you can't do that kind of work unless everybody has a certain psychological sense of safety. They care about redistributive policies because cities are big enough, dense enough, and diverse enough that you can't rely on social pressure to make sure everyone contributes. They care about diversity and immigration because you can't run highly-specialized knowledge-based businesses without bringing in talent from elsewhere.

Meanwhile, Red America cares about gun rights because you basically need them to live in a rural area where wild animals may surprise you at any time. They care about taxation because the businesses are usually self-reliant, independent firms (often in commodity markets) rather than deeply-networked, interconnected systems which often depend upon government R&D. They care about cultural homogeneity and upholding sacred traditions because that's a large part of the social fabric in smaller towns & cities where everybody knows everybody else. They care about liberty because they don't want Blue Staters lording their foreign values over them.

The California Conveyor is basically a manifestation of one socio-economic system growing and eating the other. As the world's population gets bigger and more interconnected, the relative size of the information economy gets bigger compared to the manufacturing, resource-extraction, and agricultural economies. That sucks up young people who are looking for jobs in industries that are growing, and deposits them in big cities. When they've made their fortunes and want to settle down, they move elsewhere, where land values are lower. But they're still embedded in the economic system (many keep the same professions, but work remotely or for different employers) and they keep the values that make sense with that economic system.

crwalker• 8 years ago

That’s a great description of the challenge.

To me, some California norms seem a bit like margin trading: loved for their high rewards when times are good, but eschewed by many with a broader historical view due to the potential for ruin.

dkhenry2• 8 years ago

Thats an interesting theory, but I don't think it would pass muster of a statistical analysis. Political affiliations track much closer with gender, faith, and economic standing then with Occupation. I would classify any pockets of political concentration as a result of subtle bias in selecting people rather then a natural result of the occupation. ( kinda like what they found here [1] with houses)

Also people in rural area's generally don't carry around guns to protect themselves from wild animals with a few exceptions like the deep wilderness of Alaska.

1. http://www.bgu.ac.il/BIDR/research/staff/meron/papers/epa.pd...

michaelmrose2• 8 years ago

Maybe you should take your own advice about being attentive to your neighbors.

Perhaps the universe is simpler than you imagine. Having put aside a pile of money they want to invest it where it will buy more.

Alternatively perhaps they disagree with some aspects of life in CA but would be happy to import other aspects.

Perhaps they intelligently believe in increased taxation because they believe what their tax money will buy is worth the sacrifice.

In flatland this is a contradiction but if Florida with x% more taxes is still substantially cheaper than the bay area now it might well not be. Give your neighbors more credit.

everdev2• 8 years ago

How about fleeing to lower cost of living states. I don't think their politics have much to do with the cost of living. Some very blue states like Hawaii and Delaware have very low property taxes and Washington has no income tax.

themodelplumber• 8 years ago

I grew up in Washington and remember how excited everyone was to go shopping in Oregon and not have to pay sales tax.

dragonwriter4• 8 years ago

How about fleeing to lower cost of living states. I don't think their politics have much to do with the cost of living.

Politics has a lot to do with broad economic outcomes (in both directions) which has a lot to do with cost of living specifically.

Some very blue states like Hawaii and Delaware have very low property taxes

So does California. Not that that makes any of them low cost of living states.

everdev2• 8 years ago

Another theory is that it's the desirability of the location. I'm sure there are plenty of high cost of living areas in the highly desirable areas of red states and plenty of low cost of living areas in the least desirable parts of blue states.

I'd guess that local beauty, amenities, jobs and housing supply has a much greater correlation and causation with housing prices than state wide political identity.

Let's not forget that political identity has huge roots in culture not just economics.

tofof2• 8 years ago

Why would you flee cost of living in California by moving to the only state with an even higher one (Hawaii), or to any in the upper 30% (Delaware, Washington)?

sources:

https://www.missourieconomy.org/indicators/cost_of_living/

https://www.fool.com/slideshow/15-states-highest-cost-living...

egypturnash• 8 years ago

The cost of living in Seattle, WA is, uh, not insignificant, to say the least. And if you move to Eastern Washington then you're in a whole bunch of GOP-voting counties with a hell of a lot less in the way of jobs a rich techie would be interested in.

abecedarius3• 8 years ago

How about Vancouver, WA? (Across from Portland, not the city in Canada.) I’m thinking of checking it out.

poulsbohemian• 8 years ago

For what it's worth, I'm a techie that thought Seattle was too expensive... ten years ago. So I moved to eastern Washington. Yes, it is very small town and very republican. But, every house on my block has Democrat political signs in the front yard and I think there's a very real possibility we're going to see our state legislative district and our congressional seat go Democrat. Likewise, depending on where you are there's more here than you might expect - short flights or ~4 hour drive to Seattle and Portland. Close hop up to BC for skiing, etc. Affordable housing. Reasonable public schools. It's not all mad max here in flyover country.

BurningFrog3• 8 years ago

I don't think their politics have much to do with the cost of living.

There is certainly a clear correlation. Whether it's causation is of course up for debate.

dawhizkid3• 8 years ago

Life hack: Move to the Bay Area and get a Bay Area tech compensation package, gain enough trust within your company/team to convince your manager to work remotely, move to a cheaper cost of living place and keep same compensation package...profit. Seen it done many times...

jchw• 8 years ago

Here's the thing: what happens if you like living in the Bay Area and prefer working in person to working remotely? This strategy probably works great if you Want to live elsewhere, but otherwise it's a big trade off.

ip263• 8 years ago

You're more than welcome to stay in California and pay California prices. A lot of other people feel that way too. No one is stopping you.

andkenneth• 8 years ago

Then you pay the premium to live and work in the place that you (and millions of other people) want to be. The above strategy works best for people who don't actually WANT to live in the Bay Area.

gjs278• 8 years ago

what do you think?

erik_landerholm• 8 years ago

Why even move there? Many companies, including ours pay Bay Area salaries regardless of where you live.

dawhizkid3• 8 years ago

I don’t think that’s true...AFAIK your typical FB/Goog comp package for the same level as Bay Area in London, for example, is significantly lower. And base salary might be semi comparable but total comp (I.e. stock) is for sure significantly higher in Bay Area than other areas.

gaoshan• 8 years ago

I worked for an SF company but live in Cleveland. Now I work for a local office but still make about half the cost of my entire house every year.

vtange• 8 years ago

What happens if you lose your Bay Area job or decide to switch out? Sounds like you'd need to move back to the Bay to repeat the process.

dawhizkid3• 8 years ago

It’s called a hack for a reason

KKKKkkkk1• 8 years ago

The employers I know will renegotiate your terms if you ask them to relocate and work remotely.

avmich2• 8 years ago

Interestingly, some employers I know encourage remote working on the grounds that they then need to maintain smaller office spaces (actually those going to offices aren't that cramped). Seems like employers save on your not-coming in person and not minding keeping your high salary.

chrisco2553• 8 years ago

As a Floridian, I'm pretty familiar with how locals feel about folks piling in from out-of-state. A lot of retired Northeastern and Midwesterners live in FL that moved over the past few decades, and it totally changed the makeup of the state. Locals get uneasy, but it's mostly a nervousness about how the transplants would change the area. In some cases, former rural areas were transformed into huge retirement communities and planned developments (PUDs).

While they certainly changed Florida, I also think that Florida changed them. Most of the snowbirds I met in central FL tended to vote Republican, though they might have been Democrats in their home states. The main reasons people move to FL are low taxes, good weather, and affordable housing. It's a very pro-business, pro-development state. I think it's hard to move to a state and not be influenced by its culture.

protomyth3• 8 years ago

My favorite is the people who move in next to a farm then make life hell on the farmer. A lot of people aren’t moving to a new area, they are homesteading.

hn_throwaway_99• 8 years ago

Perhaps, but I think things have changed now such that the politics of an area are much more impacted by the urban/rural divide than the red state/blue state divide.

Look at Texas, which hasn't elected a Democrat statewide in decades. People used to joke about "The People's Republic of Austin" in reference to the liberal lean of that city, but now all of the largest cities in the state, Houston, Dallas, San Antonio, Austin, El Paso, voted for Hillary in the last election.

Someone moving from SF or LA to Austin is probably not going to find their local sensibilities that different from where they left.

chrisco2553• 8 years ago

Maybe. I think that may be true overall, that denser cities lean left. Where does that leave suburbia though? Somewhere in the middle? While Austin votes blue every city/county around it voted red, including Round Rock. And Ft Worth went red but Dallas went blue. So I guess it might even depend on your neighborhood.

untog2• 8 years ago

Aren't things like schools in a dire state in Florida, though?

Not trying dig at the state or anything. But it occurs to me that an influx of retirees who care about low taxes a lot more than they care about educating the coming generation isn't necessarily a good thing for a state in the long term.

chrisco2553• 8 years ago

They're definitely terrible on average. I can't disagree with you. I think the state could even stand to raise it's sales tax 1% to support better education.

kchoudhu5• 8 years ago

We took one whiff of California's tax and housing regime and bought a house in Las Vegas. So what if it's a charnel house for three months every year, the lack of state tax and reasonable housing prices make it worth it.

raverbashing• 8 years ago

So what if it's a charnel house for three months every year

Wait, what? Looking at that definition I still don't understand

bsagdiyev2• 8 years ago

I think the reference was towards the ridiculously hot summers Vegas can see. When I went in the beginning of June for my birthday San Diego was in the 70s and Vegas was topping out over 110.

kchoudhu5• 8 years ago

Might have misused the phrase -- I was simply referring to how hot it gets during the summer.

hcknwscommenter• 8 years ago

Really? Do you enjoy outdoor activities?

kchoudhu5• 8 years ago

Vegas hiking is good in fall, winter and spring. The heat necessarily means that you limit yourself to indoor activities during the summer, and that's just fine by me!

nradov• 8 years ago

It will be interesting to see what happens to Las Vegas when the water supply runs even lower than it is now.

kchoudhu5• 8 years ago

Going out to Lake Meade isn't exactly reassuring these days, but the Vegas water district has made huge strides in reducing water consumption: the rebate program to get people to put in more natural foliage in their backyards has been a smashing success, there are more programs coming on stream make sure that per capita water usage keeps trending down.

I'm not too worried about the future, to be honest.

wnevets• 8 years ago

Now if we could only stop giving subsidies to red states and let them pulls themselves up by their own bootstraps.

tartoran2• 8 years ago

So a lot of voting demographics will change I assume, a lot of red states would become less red if this migration becomes a serious trend. Middle class New Yorkers are affected by high prices in housing as well

Boise and Reno capitalize on the California real estate exodus

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