by Mitch Kokai
Senior Political Analyst, John Locke Foundation
California Gov. Gavin Newsom boldly — and a wee bit desperately — ran ads last summer encouraging Florida residents to relocate to California. Housing affordability is one reason it probably won’t work.
Housing affordability has been a major factor driving Californians to states such as Texas and Florida, where they can realistically afford the American dream of owning a home.
Cost of living — which is mainly a housing problem — and taxes round out the top motivations for fleeing the once-growing states such as California. The states that win on housing affordability from free-market-oriented policy win overall.
Twenty years ago, few would have bet on a mass exodus of residents from the popular albeit highly regulated housing market in California. Issues related to land use, zoning, and bureaucratic chaos led to substantially higher housing costs.
The five most expensive housing markets nationwide are all within California. Further, a recent Hoover Institution report found that one of the top reasons companies leave California is “… high living costs, particularly the cost of housing affordability.” In the same vein, C2ER finds that California’s housing costs are about 1.7 times greater than Florida’s and 2.2 times higher than Texas’s.
This contributes to California suffering losses of big businesses (11 Fortune 1,000 companies) between 2018 to 2021, along with small, quickly growing companies.
Texas and Florida have figured out the secret to housing affordably through free-market policies that help entrepreneurs address challenges to build more homes in a safe, less costly manner.
The recent census report shows how Florida drew the most new new domestic residents (318,855), with Texas coming in second (230,961). Many people packed up and moved to states with “lower taxes, more affordable housing and a higher standard of living.” What’s more, Texas came in first in overall population growth (470,708), with Florida second (416,754).