# California exodus

The California exodus is the late 20th century and ongoing 21st century mass emigration of residents and businesses from California to other U.S. states or countries. The term originated in the late 20th century; it resurged in use to describe demographical trends that resulted from the COVID-19 pandemic in California. Common reasons for residents leaving California include the high cost of living, crime, politics and traffic, as well as comparatively high tax levels and a complex regulatory environment for businesses.
Texas is the leading destination of California's former residents, with Arizona, Nevada, Washington, and Florida also receiving significant numbers of former Californians. However, California was ranked as the 4th 'stickiest' state in the U.S. by the share of residents (73 percent in 2021) who were born in and still reside in California, ranking behind Texas, North Carolina and Georgia. Some observers have also criticized the term and disputed the narrative.

## Origins of the term

Cultural, demographic, and economic shifts in the late 20th century resulted in a perceptible trend of California residents and business emigrating to other states, particularly to Texas, Arizona, Nevada, and states in the northwestern United States. Articles published in 1989 by the San Francisco Examiner and Knight Ridder, as well as in 1991 by the Los Angeles Times dubbed the phenomenon the "California exodus" and "Great California Exodus". A 1995 study published in Geographical Review attributed various causes for mass emigration from California:
   Military base closures, businesses abandoning a state regarded as overregulated and tax-unfriendly, and growing unease about the attainability of an idyllic life along the Pacific Slope began a trend that has gained volume and velocity. By late 1992 quality-of-life surveys found residents' perceptions of California had reached an all-time low, with only 30 percent considering the state "one of the best places to live". Social disorders and natural disasters in both southern and northern California further unsettled an economy that had been little more than dyspeptic since 1988 ... Symptoms of more than a substantial malaise, they indicate a great change. The causes of change may be subject to debate, but their galvanizing effect is beyond challenge: Californians began to emigrate.
According to the San Francisco Examiner, most of those leaving California were people born in the state. In 1993, the level of emigration from California was the highest in its recorded history. Consequences from the Dot-com bubble and its ensuing crash also motivated further mass emigration during the late 1990s and early 2000s. Although the numbers of emigrants exceeded those of immigrants from within the United States, the continued arrival of immigrants from outside the United States led to a general increase in California's population during the 1990s.

## Demographics

Net domestic migration, California :
| Year | In-migrants | Out-migrants | Net |
| 2010 | 444,749 | 573,988 | –129,239 |
| 2011 | 468,428 | 562,343 | –93,915 |
| 2012 | 493,641 | 566,986 | –73,345 |
| 2013 | 485,477 | 581,679 | –96,202 |
| 2014 | 513,968 | 593,308 | –79,340 |
| 2015 | 514,477 | 643,710 | –129,233 |
| 2016 | 514,758 | 657,690 | –142,932 |
| 2017 | 523,131 | 661,026 | –137,895 |
| 2018 | 501,023 | 691,145 | –190,122 |
| 2019 | 480,204 | 653,551 | –173,347 |
| 2021 | 433,402 | 841,065 | –407,663 |
| 2022 | 475,803 | 817,669 | –341,866 |
| 2023 | 422,075 | 690,127 | –268,052 |
California joined the United States after the Mexican–American War. Like much of the land ceded from Mexico in the war, California had only a small non-Native population. However, the California Gold Rush led to a population boom, during which California gained statehood in 1850. Between the 1850 and 1860 censuses, its population more than quadrupled. It saw a second period of growth after World War II thanks to the aerospace and defense industries, and a third during the 1980s and early 1990s because of the Silicon Valley tech industry. Population growth slowed in the mid-1990s as the federal government cut aerospace spending after the end of the Cold War, and again after the Great Recession.
The state has had a net loss of domestic migrants every year since about 1989. From 1995 to 2000, California had the second largest net domestic outmigration, mostly to Nevada, Arizona, Georgia, North Carolina, and Colorado, while it gained migrants from abroad. Its net migration rate over this period was –25%, the 7th highest after Hawaii (–65%), Alaska (–51%), New York (–49%), North Dakota (–41%), Illinois (–30%), and Wyoming (–27%). In 1955–1960, the ten largest state-to-state migration flows involving California all had the state as a recipient of people, while in 1995–2000, nine of the ten largest flows involving the state had California as a net loser, with only New York sending more people to California than it received in return.
According to Census Bureau estimates, 6.2 million people left the state in the 2010s decade, while 4.9 million moved in: a net loss of 1.3 million residents. From 2011 to 2015, the California exodus was substantial in absolute terms but small in net migration rate, with a considerable imbalance between inflows and outflows of migrants. New York had higher net loss than California across these three metrics.
According to the California Department of Finance, the state had 135,600 more people move out than moved in from July 2019 to July 2020, marking the third straight year of net migration losses. After peaking just shy of 40 million Californians, by 2020 into 2022 onward this slowing had crossed the zero population growth mark into outright negative population growth for the first time in over a century. The exodus increased in 2021, when more than 360,000 people moved out of California, especially going to states like Texas, Arizona, Washington, Idaho, and Utah. Some are also moving to Mexico to avoid the 2021–2023 inflation surge, as Mexico's cost of living is lower. According to the 2021 American Community Survey (ACS), California had the 4th highest "stickiness", defined by the Federal Reserve Bank of Dallas as the share of people born in a state who still lived in that state as of the 2021 survey. According to the 2022 ACS, California had the lowest (11.1%) inmigration rate (number of people moving into a state as a share of that state's total number of movers), despite a large number of in-movers.
Between April 2020 and July 2022, the state's population dropped by more than 500,000 people. In July 2023, the California Department of Finance reviewed its population forecast for 2060 and concluded that the state's population would stay constant at about 40 million people, instead of reaching 53 million as estimated in 2013. In October 2023, the Stanford Institute for Economic Policy Research found that California was "hemorrhaging residents to neighboring states like Texas, Arizona, and Nevada" at "higher levels than ever before", across all income levels, and especially among college graduates. California's population grew in 2023 for the first time since 2020, driven by lower mortality and higher legal foreign immigration. However, net domestic migration was still negative (91,189 people left for other states) and the population growth was low (+0.17%). In 2024, the state's population increased again; although it had the highest number of residents who moved to another state, it received the second-highest number of immigrants from abroad.

## Causes
### For individuals

The primary cause of the exodus is the high cost of living (and especially the cost of housing), followed by issues such as crime, politics, pollution, and traffic. Kenneth P. Miller said in 2022 that taxes, as well as rising costs on housing, food, and other needs and wants, are the biggest reason for Californians leaving the state. The rise of remote work also made it easier for people to leave California. According to the ''Los Angeles Times'', housing cost is the primary reason, followed by long commutes, crime and pollution.

#### Housing and infrastructure

California has repeatedly been ranked as one of the country’s most expensive states to live in. The median asking price for a house was $797,470 in California in 2022, which only a quarter of households in the state can afford.
Economists have cited restrictive zoning policies and lack of investment in transportation infrastructure that has resulted in sprawl, constrained housing supply, high housing prices, and severe congestion. They also cited over-reliance on sales tax, fees, and disproportionate property taxes on new residents caused by 1978 California Proposition 13.

#### Environmental policies and mandates

According to the Stanford Institute for Economic Policy Research, the climate change policy of California could increase exodus to more lenient states like Arizona and Texas.

#### Politics

A New York Times Upshot analysis found that partisanship plays a significant role: more Republicans have moved out of California than any other state.

### For businesses

Since 2019, more than 200 businesses have left California, the most of any American state. Examples include Charles Schwab, Oracle, Palantir, Hewlett Packard Enterprise, and Chevron. Texas has received many of the new headquarters. Businessman Elon Musk moved from California to Texas in late 2020. His companies Tesla and SpaceX relocated their headquarters to Texas in 2021 and 2024 respectively.
According to the Hoover Institution, businesses leave California due to "taxes, regulations, litigation costs, labor costs, energy and utility costs, and employee cost of living". Store chains Nordstrom and Whole Foods and shopping mall operator Westfield mentioned safety issues and changing economic conditions as a reason to stop operating in some parts of California.

## Consequences

In the 2020 redistricting cycle based on the 2020 census, California lost a seat in the House of Representatives for the first time in its history, going from 53 to 52 seats. In the aftermath of the COVID-19 pandemic, the continued negative growth of the state saw predictions of up to 4–5 seat losses for California in the House of Representatives after the 2030 census, which would shrink its delegation from 52 to 47 seats. This would be the largest decline recorded by any state in one cycle.
According to data from the Internal Revenue Service, migration of the taxpayers out of California resulted in California being the biggest income loser ($24 billion) in 2022.

## By location
### San Francisco

San Francisco is suffering from the opioid crisis, with the second highest rate of drug deaths of any large city in the country. Like many other large cities in California, San Francisco also has a large homeless population. Following the COVID-19 pandemic, many tech workers have embraced remote work, causing about a third of the commercial real estate in downtown San Francisco to be empty. For example, between 2020 and 2023, nearly 40 retail stores have closed in Union Square’s zip code. Northface, Zara, and Macy’s closed some of their stores.
Some observers have theorized that San Francisco could enter a "doom loop", with the downtown portion of the city having only 32% of the cell phone activity as pre-pandemic levels. Others argue that doom loop claims are exaggerated and that the crisis is isolated to downtown San Francisco rather than citywide and that San Francisco has always been a "boom and bust" city.
According to US Census estimates, San Francisco's population declined by more than 60 000 people, or more than 7%, from 2020 to 2022. In 2023, the city's population increased, with the AI boom cited as a contributing factor.

## Other views

In a December 2020 column for the Los Angeles Times, journalist Michael Hiltzik argued that California's slowing population growth is a cause for concern but not indicative of a full-blown crisis. Hiltzik quoted demographer Hank Johnson from the Public Policy Institute of California as saying that recent data "is just an incremental change from what we've been seeing over a couple of decades." According to Johnson, California's population trends don't compare to the "hollowing-out" of Rust Belt cities such as Cleveland, Detroit, and St. Louis, which have lost more than half their populations in the last 50 years. Hiltzik instead says that a lack of affordable housing is California's main problem, as it has pushed young people out of the state, and that concerns about over-regulation are being exaggerated.
Christopher Thornberg, an economist and founding partner of Beacon Economics, said in late 2020, “You will know that California has truly crossed a line when home prices start falling, there is more demand to live in California than to not live in California.” Thornberg added that he believed that California had made policy mistakes in responding to the pandemic that might negatively affect the state’s business climate but remote workers who have the option to leave “are sure as hell not moving to Texas.”
Researchers from a consortium of universities, including the University of California, Berkeley, the University of California, Los Angeles (UCLA), Cornell University, and Stanford University, started studying California's population in the fall of 2020. In July 2021, the researchers published their findings, which found "no evidence of an abnormal increase in residents planning to move out of the state." Researchers noted that people leaving San Francisco generally did not move far, with many choosing counties in the Sierra area, and most remaining within California. According to them, there had also been a significant decline in new arrivals to the state's urban centers and in summary, the pandemic appeared to have caused more of a shift in population within California rather than a widespread exodus from the state. This lack of a major departure from California should reassure those concerned about potential impacts on state tax revenue. The researchers said that more than 3,000 Californians surveyed said at a nearly 2-to-1 margin that they thought the state was a great place to reside and raise a family and “the majority of Californians still believe in the ‘California dream’”. According to them, "moneyed Californians" were "not decamping en masse, nor" were "big investors" and that there was no evidence of "millionaire flight" from California, pointing out that “California’s economy attracts as much venture capital as all other states combined” and their analysis showed that California’s portion of venture capital money was 48 percent and continued to eclipse the share of its competitor states (New York’s share was 15 percent while Texas and Florida's were 2 percent in 2021).
A 2023 article by Axios stated that "Californians don't like to leave home." A Dallas Fed study using U.S. Census Bureau data ranked California the 4th "stickiest" state in the county and that 73% of people born in California still lived here in 2021. People still wanted to live in California even with its high cost of living, slowing population growth and lessening migration. Another statewide survey found 70% of residents feel happy about living in California, yet 4 in 10 Californians are considered moving out of the state mostly due to concerns about living expenses. San Diego County experienced its first population loss in a decade in 2022, a net loss of more than 26,282 residents, according to the San Francisco Chronicle. But most of the people who left San Diego County didn't go very far and five of the top 10 destinations for the people who left San Diego were in California.
William Frey, a demographer and senior fellow at the Brookings Institution, told Newsweek that California was heavily impacted by the pandemic due to increased domestic outmigration and decreased immigration. However, he noted that this trend changed in the last two years, largely driven by a rise in immigration from abroad. He suggested that this would be key to any long-term growth in the state.