Companies relocating out San Diego…

[joec]

I don’t think this is true…Knowing people who have actually left CA for TX, NV as well…it’s actually upper middle class people who move since the tax hit affects them far more. You can only deduct so much with a mortgage and if you’re making upwards of 200-300k or 500k+, that 30k or more per year is pretty much “free” housing as well as your retirement all done…probably.

As great as CA is, I feel unless you had to be here (mostly for tech to try to be a millionaire fast), it’s just not worth it. I know plenty of people who didn’t move as well being from the bay area, but ALL those people I knew had family who helped them buy a home (all 1 mil+)…and with their parents and everyone they know in the same boat, they don’t really need to move since they own homes already.

Affordable housing in a decent area with good schools is the number 1 killer for people wanting to stay and as people start families and have kids, CA (especially bay area/LA) makes very little sense. If you lived in silicon valley, making 150k probably puts you in the “poor” category honestly. SD is a bit more affordable for what you get, but it’s still pricey.

I’d recommend anyone who is starting their career to consider building a base/career/network in places where there is good job growth and companies are hiring, but is more affordable.

I’m still in CA cause I’m actually poor and get the handouts and pay little/no CA tax at all so they can raise taxes to 50% for all I care, but people are leaving I think, and these are people who actually are paying the high tax bill.

[SD Realtor]

Could be Joe… We have several rentals in Texas and we are out there alot because of family. In several of the neighborhoods we know many Cal transplants. Some of them moved because of the tax policy but more of them moved simply because of ideology.

[spdrun]

What ideology? SD is pretty conservative. OK, not as conservative as parts of TX, but that might be a good thing.

[EconProf]

[quote=spdrun]Oh please — a 3% (meaning 5-10% of total tax burden) tax hike isn’t going to make people stay or leave a state. Especially since the highest tax is on income above $1 million. They’re already paying decent bank to live in California.

The people affected moving to Texas would be like Donald Trump moving out of NYC because his property taxes went up 10%. Right.

Though I have to say that prop 30 raising taxes retroactively was dirty ball — and possibly illegal since the Federal prohibition against ex post facto laws applies to states as well.[/quote]
You are correct that the state income tax hike to 13.3% on the highest earning CA taxpayers BY ITSELF does not involve a lot of people, and it’s not even a lot of tax revenue. But it is on top of an already high tax burden on these people, and for many it constitutes the last straw. Many of the rich who were considering moving themselves or their companies (see previous posts) are looking at the trends in CA and deciding they don’t want a future here. Remember that CA has about the highest other taxes plus el and water rates about twice the national average. Investors and employers place their bets according to where they think there is a reasonable electorate and a welcoming government. No surprise that it is Texas and not California.

[spdrun]

^^^

Then again, California has low property taxes, relatively low food costs for good quality food, and a climate amenable to solar energy. Coastal areas also have a climate that promotes low energy usage, so even if electricity is expensive, cost of living is kept under control.

It’s not all bad. Also betting that for every person leaving, there’s another coming in either from further east or from abroad. Same deal with people whinging being people leaving NYC or NJ. The replacement rate (mostly from abroad) is good enough to not cause a population loss.

[SK in CV]

[quote=spdrun]^^^

It’s not all bad. Also betting that for every person leaving, there’s another coming in either from further east or from abroad. Same deal with people whinging being people leaving NYC or NJ. The replacement rate (mostly from abroad) is good enough to not cause a population loss.[/quote]

You’re right. The net migration from other states is INTO California, not out of California. Even for Texas, the latest migration estimates are that the net migration to Texas is pretty small, between 20 and 30K per year. (20 to 30 thousand more are moving to Texas from California than from Texas to California) At that rate, after 10 years, a whopping 1% of the population will have shifted. At least so far, there hasn’t been any large effect.

[joec]

[quote=spdrun]^^^

Then again, California has low property taxes, relatively low food costs for good quality food, and a climate amenable to solar energy. Coastal areas also have a climate that promotes low energy usage, so even if electricity is expensive, cost of living is kept under control.

It’s not all bad. Also betting that for every person leaving, there’s another coming in either from further east or from abroad. Same deal with people whinging being people leaving NYC or NJ. The replacement rate (mostly from abroad) is good enough to not cause a population loss.[/quote]

The problem is you only have low property taxes IF you bought a long time ago. This is why all my family/relatives have no incentive/plans to move since their highest expense (housing) is locked in at a very low rate with property tax rates from the 70s/80s…

However, take a look at it as a young professional recently graduated and working for 5 years making, say 60k or even 120k dual professional income in the bay area…

I don’t know prices anymore so I am guessing and someone can correct me, but ANY house in a good school district with say a mere 1000 sqft is probably well over 700k. That’s hard for someone making 200k+, let along a younger professional who has worked for say 5 years or so, who wants to get married, start a family, etc…to get into. I think these are the people who should/will leave IMO since their taxes are high, can’t get a house to start a family in a good school district, and is the “middle-class” of old (the middle class now making household 45k are sorta in poverty IMO).

CA generally does have a lot of migration and second home purchases from people in China and Asia in general I think (asians like to live with other asians) so this helps with housing prices.

Some places in LA and UC Irvine I think is heavily at or near 50% asian already (which many people who aren’t asian tend to not like so more reasons to move).

[spdrun]

^^^

So buy a 2 or 3 bedroom condo. It’s not the end of the world to live in an apartment, American snobbery notwithstanding.

BTW – 1.1% of purchase price is low by national standards. In some parts of the East Coast, you’ll be paying $10-20 grand a year on a $700k house, not approx $7700.

[EconProf]

Actually CA property taxes come in at the national average, in dollar terms. Prop 13 currently limits them to 1% of market value (actually, about 1.2% with bonded debt). In other states they run about 2% of market value. But because our market values are so much higher, the dollars paid are about the same.
All our other major tax sources–personal income, corporate income, sales taxes, etc. are the highest in the nation or close to it. And the protections of Prop 13 are under assault by Sacramento politicians and will likely be eliminated soon.

[spdrun]

And you get something for the income and sales taxes … some (not great, but some) level of public transit. Decently maintained roads. Few tolls in Southern California compared to other states, and they actually kept their word on eliminating tolls on the Coronado Bridge.

Free, well-kept beaches (yep, gotta pay in other states). Strictly enforced environmental regulations (that’s a good thing — ever been to LA in the 80s?) A decent public university system by national standards. Well-maintained public spaces, parks, museums, etc. A social safety net that’s somewhat better than other states if you lose your job or happen on bad luck.

I strongly doubt that Prop 13 will be overturned statewide. It would require a popular vote or state Supreme Court action to repeal. Plus there are already mechanisms in effect for localities to bypass it if their voters so decide (Mello-Roos and parcel taxes), so it needn’t be overturned.

[UCGal]

I know someone who works at web sense…. He’s not moving. But both he and his wife have extended family here and don’t want to leave San Diego.

My understanding is that if the move is more than 50 miles you can turn down a real offer and its the same as being laid off from an unemployment insurance point of view.

[quote=flu][quote=The-Shoveler]I have been to Austin, Not my cup of tea.

If I had to move there I would be planning my escape from day one.[/quote]

I’m trying to follow ucgal’s lead into trying to retire early… Hopefully before I turn 40…. errrr….

scratch that… make that now 41….[/quote]

I’m still working my plan. I’ll be out at 55 at the latest… Sooner if the market does well. Could do it now if I was willing to sell and tell to a cheaper place, like Texas…. But I like San Diego so I’ll work a few more years.

[joec]

[quote=spdrun]^^^

So buy a 2 or 3 bedroom condo. It’s not the end of the world to live in an apartment, American snobbery notwithstanding.

BTW – 1.1% of purchase price is low by national standards. In some parts of the East Coast, you’ll be paying $10-20 grand a year on a $700k house, not approx $7700.[/quote]

My point is that people are moving because they don’t WANT to rent a 2 bedroom condo after renting for the past 12 years+ since college…I don’t know if you’ve lived or visited other parts of the country, maybe it’s not SD or CA, but it’s just not as bad IMO as some people make it to be…especially for the price to live here.

We purchased in 2009 so we’re stuck now, but honestly, I could live in a tokyo coffin since I really don’t care about housing much, but tell that to a lot of families w/kids, moms/wives, etc…and they would probably agree that paying large amounts for what you get in terms of housing feels bad.

I have a relative that left the bay area for that exact reason. Felt poor with the mortgage and so much money was going there and didn’t want to put up with it so moved. And this wasn’t even in the most/desirable areas.

[spdrun]

A said BUY a 2-3 bed. condo, don’t rent 🙂

[FlyerInHi]

Texas is not so bad. A good friend moved to Dallas some years ago and hasn’t looked back. He was not happy about it at first, but the job is good and the townhouse is cheap.

I can see why people don’t want to spend all their money on housing. It can be liberating to not be obsessed about real estate like people are in Cali and NYC.

To me, Dallas and Houston feel like giant corporate parks. But inside the house it’s the same everywhere and if people can have the big house the really want, then why not? Arguably better than an apartment somewhere expensive. (Speaking as someone who thinks a well designed apartment with a terrace in the city is better than a tract house in the suburbs)

Btw, wealthy small to mid business owners don’t move away from nice areas. Large corporations move for the incentives which are only available to larger businesses. Middle class people move for job transfers and or lower cost living. Lower class people move looking to join the middle class to places like Phoenix, Atlanta, Dallas…. It’s a well documented phenomenon.

[Coronita]

[quote=UCGal]I know someone who works at web sense…. He’s not moving. But both he and his wife have extended family here and don’t want to leave San Diego.

My understanding is that if the move is more than 50 miles you can turn down a real offer and its the same as being laid off from an unemployment insurance point of view.

[quote=flu][quote=The-Shoveler]I have been to Austin, Not my cup of tea.

If I had to move there I would be planning my escape from day one.[/quote]

I’m trying to follow ucgal’s lead into trying to retire early… Hopefully before I turn 40…. errrr….

scratch that… make that now 41….[/quote]

I’m still working my plan. I’ll be out at 55 at the latest… Sooner if the market does well. Could do it now if I was willing to sell and tell to a cheaper place, like Texas…. But I like San Diego so I’ll work a few more years.[/quote]

You’re my hero ucgal…. Totally hear you…Unfortunately, the only other place that I would consider moving to, aside from overly expensive San Diego, is… back to ridiculously expensive Silicon Valley……

Once upon a time I considered going to websense and active networks… I turned them both down… I guess that ended up being a good thing…

[Author]

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