Saturday, March 27, 2010




Don’t expect any of them to admit it, but it turns out they were wrong – all those politicians who whined for many years that high taxes and lousy business conditions were pushing Californians to leave for other states.

That claim has been a firmament of campaigns by the “out” party, whichever one doesn’t hold the governor’s office at any moment, since the 1980s. Any politician who wants to take that office away from an incumbent invariably claims he or she can stanch the outflow.

It turns out none of them could, from current Gov. Arnold Schwarzenegger to predecessors like Pete Wilson, Gray Davis and George Deukmejian.

That’s because the tide of middle-class Californians leaving the state has never had much to do with taxes, the business climate or jobs. Rather, it was mostly about housing prices. Don’t bet on this happening, but the new reality means the out-migration theme really ought to disappear from political discourse.

In fact, the same tide that sent hundreds of thousands of Californians to Arizona, Idaho, Nevada, Oregon, Washington and Texas also was responsible for the vast growth of inland California, from the Sacramento and San Joaquin valleys to Riverside and San Bernardino counties.

Both those tides appear to be be quelling. For the real impetus behind large-scale population movement was – surprise – money. As long as residents of coastal California counties from San Diego to Ventura, San Mateo and Marin could sell their homes for enormous profits and then buy much larger properties in other states or inland counties with cash left over, they did it. Many wound up with larger digs and smaller mortgages – or no mortgages at all.

In 2004-05, for example, more than 47 percent of all moves within the United States were housing related, with the largest share motivated by a desire for bigger, better and cheaper homes, according to a new Brookings Institution study based on information from the U.S. Census Bureau and the Internal Revenue Service. By contrast, less than 18 percent of moves were related to jobs, and the majority of those involved transfers.

But last year, housing motivated only 17 percent of all moves, a drop of about two-thirds from five years earlier, while job-related moves accounted for 34 percent of moves. Meanwhile, the actual number of job-related moves was lower than it had been for the last decade.

In short, all those shouts about high taxes, illegal immigration and business conditions causing a middle-class population drain were mostly hogwash. So are the similar bleats heard today. There may have been a bit of those factors at work, but the Brookings study shows that while there was an outflow of almost 300,000 Californians to other states at the peak of the migratory wave, housing profits were the fuel, not the supposed conditions loudly and scurrilously exploited by politicians like Schwarzenegger.

When the housing bubble popped, the game of musical chairs mostly ended.

Besides a hoped-for but unlikely muting of self-serving myths, the migration change could have one other political effect: It might prevent California from losing one of its 53 seats in the House of Representatives, or even cause another to be tossed our way.

For even as the domestic out-migration dwindles, international in-migration continues (the San Francisco Bay area had a net in-migration of about 5,000 from other parts of the United States last year, while the Los Angeles area’s losses to other American regions including inland California amounted to about 100,000 – one-third of prior levels. At the same time, international immigration brought 27,000 new residents to the Bay area and 89,000 to L.A.).

Prior to release of the Brookings study, the general assumption was that states like Texas, Arizona, Nevada and Florida had absorbed enough former Californians to drain at least one House seat away from California.

But if the 2008 patterns continue through this year, there’s every reason to believe California won’t lose any of its current clout in Congress or much of its share of federal spending.

For even though immigration from Mexico – both legal and illegal – is far reduced from the levels of even two years ago, international immigration from other parts of the world remains steady. There is no shortage of newcomers from Asia and the Middle East.

The bottom line: The real world’s intrusion has now shown some of the most inflammatory political rhetoric of the last two decades was a red herring, and voters should know that any politician who continues trying to pin the past California exodus on high taxes or a bad business climate is a conscious liar.

Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit



  2. Umm, mass immigration, legal and illegal, is directly related to housing prices. Supply and demand is not dead, and international immigrants need housing too.

  3. BTW, a major determinant of housing prices is quality of schools, and quality of the local school is adversely impacted by large numbers of limited English speaking students from economically poor backgrounds.

  4. umm, it's obvious you are living in denial. The CA Democrats just don't and will never get it. All evidence points to smart, well skilled people moving out and lower skilled, lower educated people moving in. CA is slowly being dumbed down