If you live in the Central Valley, the Bay Area transplant who moves in next door won’t likely be a Silicon Valley executive driving a Tesla. Your new neighbor will be more likely be a barista who couldn’t afford a home in the Bay Area.
Nearly half of the estimated 365,000 households who left the Bay for the Central Valley between 2010 and 2016 earned less than $50,000 a year, according to a new study released this week. It is co-authored by researchers from the Terner Center for Housing Innovation at the University of California, Berkeley, and BuildZoom, a website connecting homeowners with contractors.
The study also found that roughly half the Latino households that left the Bay Area and more than a third of the black households that relocated moved to more affordable regions of California, likely the Central Valley. Issi Romem, an economist and one of the study’s co-authors, said it is “probably a fair guess that the service sector is over-represented among the lower-income population” moving to the Valley.
At the same time, fewer than one out of every 20 Bay Area transplants to the Central Valley earned more than $200,000 a year. Those wealthier households preferred more expensive destinations, such as Honolulu, the Washington, D.C.-area and New York City, the study found.
The study provides some of the most detailed demographic data yet on the thousands of Bay Area transplants pouring into the Central Valley, from Redding to Bakersfield. And it makes clear that while families are leaving the Bay Area for destinations all around the country, Central Valley communities are some of their top landing spots.
The Sacramento area was the top destination in the nation for Bay Area transplants, with an estimated 192,000 households relocating to the capital region between 2010 and 2016, according to the study. Roughly 80,000 of those transplants earned less than $50,000 and research has shed light on who many of those people are.
A study released this summer revealed Sacramento is one of the nation’s top destinations for Millennials, and real estate analysts said many are likely young workers from the Bay Area seeking affordable housing.
The Modesto-Merced metropolitan area was the third most popular landing spot with an estimated 88,000 transplants. Fresno and Chico were also among the most preferred destinations for Bay Area residents.
Central Valley residents are experiencing the impacts of this mass migration. Commuting times in some bedroom communities along Interstate 5 are among the worst in the nation. Housing prices and rents in some Valley counties are skyrocketing. And in some places, where people buy homes in the Valley but continue to work in the Bay Area, the impact of thousands of new residents on the local economies can be minimal, Romem said.
“Depending on what your views are, if you perceive growth to be a good thing, then this is inviting growth,” said Romem, the chief economist at BuildZoom and a fellow with the Terner Center. “But it does also mean that probably an abnormal amount of people moving to the Valley will continue to have some tie to the Bay Area. It also means there will be more of an impact on roads and traffic. It means schools and hospitals will need to be prepared to deal with this influx of new residents.”
And, he said, it creates significant pressure on Central Valley governments to build more housing – something that affordable housing advocates contend isn’t happening fast enough.
Phoebe Seaton, a co-director of the Leadership Counsel for Justice and Accountability, a social justice advocacy organization based in Fresno, said local governments in the Central Valley are focused more on developing urban housing for middle- and high-income earners than preserving or constructing affordable housing.
“The pinch is getting worse and I would say that the middle and lower-middle income Bay Area folks are targeting the neighborhoods where people (in the Central Valley) have historically been able to afford to live,” Seaton said. “It’s a fight to make sure that housing is preserved and protected for low-income folks.”
The influx of new residents has coincided with some of the largest home price increases in the nation.
The median home price in Merced County rose 130 percent between 2012 and August of this year, according to a McClatchy analysis of data compiled by real estate firm Zillow. That was the fourth-highest increase in the United States, just behind the hike in wealthy Santa Clara County.
Stanislaus County saw a 127 percent increase in home prices over the same time period, according to the Zillow data. Prices in San Joaquin County are up 125 percent.
“One of the challenges that we’re experiencing is that there is a really outdated narrative still that we don’t have an affordable housing problem (in the Central Valley),” said Andy Levine, a chapter director with Faith in the Valley, a faith-based organization focused on social justice issues in the Valley, including affordable housing. “That’s long been untrue.”