Many Californians, grappling with financial challenges in the state, are opting to relocate to more favorable destinations where they and their families find greater prosperity.
A recent study highlights that those departing from California are often lower-income residents who struggle to sustain their standard of living amidst the state’s soaring costs—but they encounter better conditions upon moving elsewhere.
Post-pandemic, the proportion of individuals leaving affluent neighborhoods in California surged to 19%, as reported by the University of California’s California Policy Lab.
The departing households aren’t destitute but find it challenging to keep up financially compared to their more affluent counterparts.
“Over the past decade, the affordability gap has significantly expanded,” Evan White, the lab’s executive director, shared with the San Francisco Chronicle. “This makes it tough for people, even those with decent incomes, to manage financially.”
Matt Ingles, 41, didn’t consider himself poor when he decided to move from Los Angeles to Dripping Springs, Texas, with his family in 2021 after spending eight years on the West Coast. However, given the exorbitant living costs, he felt it was easy to fall behind despite his earnings.
“I do notice in California, there is that wealth gap. I mean, there are just so many ultra rich people living in LA and San Francisco, and you have daily exposure to those people,” Ingles told the Post. “So maybe the perception, even if you’re doing well financially, is that you don’t have as much because there’s so many people you know living in abundance.”
He said the cost of living in Texas is significantly less than in California, with everything from gas to groceries. His family saves nearly $60,000 to $80,000 alone on education because the quality of public schools in Texas are good, while in California, he sent his children to private school.
“You just get way more bang for your buck in Texas than you do In California,” he said. “My quality of life here is significantly better. But that’s more than just finances.”
People exiting the state tended to have worse credit scores, sometimes with their credit cards maxed out. They had more auto loans, significantly higher student debt and were 10% less likely to own a home.
But when they finally left California, their outcomes improved — those who left were 11 percent more likely to own a home after leaving.
In contrast, people moving to California were only 6 percent more likely to own a home within seven years. During 2025, nearly 150,000 more people left the state than arrived.
Ingles said he could see why based on his own work in real estate.
“The affordability here is a huge piece of the housing market, and I see that with my clients that move here,” he said. “I mean, I have numerous clients that I’ve helped move here from California, and they’re astonished at what they can get for their money.”
All that points to the fact that California is increasingly become a state only for the well-off, researchers said.
High rents and housing costs are major factors that have kept people down. A separate study, also recently released, found that the average California household has about 35 percent less disposable income than the national average.
The reason? High taxes, high housing costs, and high energy costs.
Efforts by state Democrats to increase housing stock still haven’t made a dent.
New housing units built in the last five years have “not yet translated into meaningful relief for households struggling with high costs,” Hans Johnson, a senior fellow at the Public Policy Institute of California, told the Chronicle.
The exodus of people can have serious consequences, the California Policy Lab said.
“If trends continue, the implications for California’s tax base and national political clout could be severe,” the report said. “For example, after losing one congressional seat in 2021, California is on track to lose three to four seats in Congress after the 2030 Census.”
