California is bleeding businesses. After decades of borderline socialist government, business owners are fleeing the state in droves.
This shouldn’t surprise anyone. Who wants to live in a state with high taxes, high cost of living, onerous regulations, and a swelling homeless population?
Apparently, many Californians have had enough.
You can’t blame them.
Where are these businesses relocating?
California business owners are moving to the Lone Star State in massive numbers…because who doesn’t prefer wide-open spaces and low costs of living over state income taxes and rampant drug use?
Additionally, when these employers relocate, many of their employees follow them out of the Golden State, leading to an even bigger influx of people across state borders.
Dallas and Austin have seen the biggest influx of Californians. From 2012 to 2016, 8,300 Californians moved to the Dallas Fort Worth region alone.
Many Silicon Valley jobs are moving to Austin as well. The Dallas News reported, “Silicon Valley-based Apple, which has thousands of employees in Austin, is building an additional $1 billion campus with capacity for up to 15,000 jobs. Austin is already the largest home for Apple employees after the iPhone-maker’s Cupertino, California headquarters. Software giant Oracle and Google have a large presence in Austin, too.”
Dallas has welcomed companies such as Toyota, McKesson (the nation’s largest pharmaceutical distributor), Jamba Juice, Pegasus Foods, Rockwall, and Kubota tractor.
The cost of buying or even renting a house in California is astronomical compared to what Texas offers.
Californians can thank their state and local government for that.
In 1994, San Francisco passed a rent-control ordinance that prohibited landlords from raising rent above half the rate of inflation. That worked out to about 1% a year.
What happened next was predictable: Supply of rental units declined.
Landlords began moving away from rental properties and started selling their apartments as condos. Some bulldozed their buildings and built new apartments because the law only applied to existing units.
Stanford economist Rebecca Diamond estimates that rent control reduced the supply of rental properties by 25%.
This policy had the effect of harming low-income people, the very people these liberal policies were supposed to help.
In San Francisco, the average rental cost is $3,500 a month.
Rent and housing prices are much cheaper in Texas, and it’s not even close.
The Dallas News reported, “Two-thirds of people moving to Dallas were renters—not homeowners— and the most common reason people cited for moving was the fact that they wanted to upgrade. The median monthly housing cost in Dallas is $1,090, compared with Los Angeles’ median of $2,470, according to the analysis.”’
There is a concern among some conservative Texans that the California migrants will turn the state from red to blue.
There is a popular ad campaign that has been promoted by Texas Governor Gregg Abbot that says, “Don’t California My Texas.”
The state is clearly not as Republican as it was even a decade ago. Beto O’Rourke ran a competitive campaign last year, almost managing to beat incumbent Republican Senator Ted Cruz.
Cruz held on, but it was too close for comfort for many Republicans in the state.
Many of the towns along the border with Mexico have turned blue, as well as the larger cities like Austin and San Antonio.
However, it is not all doom and gloom for Texas Republicans. Many of the people fleeing California are Republicans themselves who are trying to escape the solidly Democrat state.
Time will tell how this migration from California to Texas will change the political landscape in the Lone Star State.
One thing is for sure: Businesses are done doing business in California.