Adam Summers: The ‘California Dream' is now found out of state

"Go west, young man" was the mantra during the 19th century, shortly after California attained statehood, as people were seeking land, adventure and economic opportunity among the nation's expanding frontier. But, for the past quarter-century, more and more Californians have gone east (and north) in search of greener pastures. A new study shows that such moves have paid off.

It is no secret that, for greater than two decades now, more people have been leaving California than moving here from other states. This net out-migration only increased during the COVID-19 outbreak, when California imposed some of the nation's most stringent restrictions, leading to prolonged closures of schools and businesses, and many people realized that they could work remotely from other states with much lower costs of living.

There has been plenty of evidence that former Californians have felt the need to leave the state largely because of concerns over the lack of affordability, particularly with regard to housing, or due to ideological opposition to the state's far-left governance in recent decades. Thanks to a new study from the California Policy Lab, a research institute at the University of California, we now know that those California expats have largely succeeded in improving their financial positions as a result of their out-of-state moves.

"The price tag has gone up on the California Dream, and many families are leaving the state for more affordable places," Evan White, co-author and executive director of the California Policy Lab, said in a statement. "The difference these moves make is stark. Their destination neighborhoods are half as expensive and they end up much more likely to own a home within just a few years."

In fact, the report found that former California residents were 48% more likely to own a home seven years after leaving the state than similar Californians who remained. In addition, the median home price in the new, out-of-state neighborhoods was nearly $400,000 (or 48%) cheaper than in their old neighborhoods, and rents were about $672 (or 30%) lower. Overall housing costs - including mortgage or rent, utilities, property taxes and insurance - were about $672 lower per month.

While housing is a major driver of the affordability crisis in California, it is far from the only factor. The report notes that Californians also pay 11% more than the national average for groceries, 40% more for gas and 61% more for utilities.

And then there are the taxes. California has the highest personal income tax rates in the nation, and even the rates that hit middle-income earners are among some of the highest. It also has the sixth-highest corporate tax rate, the highest state sales tax rate and the highest gas tax rate. These high tax rates are a significant factor in relocation decisions for both families and businesses, especially considering that neighboring Nevada has no income tax and Arizona has a flat tax of just 2.5%.

Democratic politicians have finally woken up to the fact that the cost of living is a problem in California, but to them "affordability" still seems to be merely a buzzword, rather than an action item. They continue to double-down on the same policies - higher taxes, more spending, more government programs, more laws and regulations - that have placed Californians in this bind in the first place. And so, instead of proposing reforms that would actually improve the cost of living for Californians broadly, we see only proposals to grab even more money, such as the billionaire wealth tax, which has driven substantial amounts of wealth out of the state before even qualifying for the ballot.

Housing prices and rents are inflated by restrictive zoning laws, union work and pay scale mandates, excessive building codes and environmental requirements, litigation and planning process delays, anti-landlord policies that favor deadbeats and squatters, and the list goes on.

Business costs and, therefore, the prices we all pay for goods and services, are higher due to high minimum wage laws, a lack of right-to-work laws, numerous other unnecessary labor and environmental regulations, a legal system that invites lawsuit abuse and is crying out for tort reform, arbitrary occupational licensing laws, and the aforementioned tax, real estate and energy costs.

In order to actually improve affordability, policymakers merely need to remove the shackles they have placed on California residents and businesses. Only the return to a lower-tax state that embraces free markets and eschews a massive welfare state can stop the bleeding. Otherwise, we can expect the population loss, capital flight and brain drain to continue, as people see greater economic opportunities outside the formerly Golden State.

Adam Summers is a columnist, economist and public policy analyst, and a former editorial writer for the Orange County Register / Southern California News Group. He is also editor and co-author of “Beyond Homeless: Good Intentions, Bad Outcomes, Transformative Solutions.”

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This story was originally published April 25, 2026 at 6:32 AM.