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New California gold rush: Folks making $200K+

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POSTED March 11, 2013 8:53 p.m.

They don’t call California the Golden State for nothing.

Contrary to some crying wolf, the better off among us aren’t leaving California. Posturing politicians as usual miss the real story. The past two decades - according to the U.S. Census’ American Community Survey - have seen a net 3.4 million people flee California for other states. If it hadn’t been for high immigration from outside the United States and the birth rate the state’s population would have declined.

Virtually all of the 3.4 million to depart the state are low- to middle-income folks who are part of families struggling to survive.

And what about those fleeing millionaire and upper-middle-income folks we keep hearing politicians talk so much about? Since the start of the Great Recession in 2005 the American Community Survey notes there has been a net influx of households making more than $200,000 a year.

California - the promised land during the Great Recession for 1.3 million struggling Americans willing to work - is now the Land of Gold Card immigrants.

This really shouldn’t surprise you. The first federal sequester in the 1980s triggered massive military base closings. Manufacturing jobs are edging toward qualifying for the endangered species list. Housing costs - despite the price collapse triggered by the mortgage crisis - are still much higher than almost the rest of the country. In California it is 2.7 times more expensive to buy a home than in Texas. You can come close to matching $84 per square foot housing in Houston by moving to Fresno, where it is $95 per square foot. The only problem is the unemployment rate in Fresno is 15 percent, or 2.5 times the jobless rate in Houston.

Much of the cost factor has to do with environmental review processes and associated fees that drag out a housing project into years just to get to the point of breaking ground. In Manteca, which isn’t exactly on the high end, the typical home being built requires fees approaching $40,000 when a building permit is issued. Those fees, of course, pay for basic services but also include costs driven by state regulations and standards. Some can easily be justified and some are dubious. The expense of building housing is why apartments are a challenge to develop, as are smaller more affordable homes. It is why even during the Great Recession state housing officials continually noted California has a housing shortage.

All of those fees and environmental regulations add to the cost of living. There is no doubt we need to protect the environment. But given where we are headed with air standards in the San Joaquin Valley we’re going from environmental protection to environmental perfection. The price we’re paying is pushing low- and middle-income households out of California.

There are a lot of attractive reasons to live in California. It is why younger and more affluent people are moving here regardless of the tax rates. The problem is the price to live in paradise is too steep for many.

You don’t have to look far for evidence that this is catching up with us. The Silicon Valley - the region leading the country in job and income growth coming out of the recession - is seeing homelessness jump 20 percent and Food Stamp use increase 10 percent in the past few years. The wealthier are getting wealthier. Those toiling for less are getting less.

In the San Joaquin Valley, farmers are facing a shortage of low-skilled workers as farm workers are starting to stay away from California due in part to the high cost of trying to survive here.

California is a long way from collapse or becoming an exclusive playground of the rich.

But we are headed that way thanks to overregulation and taxes that stress middle- and low-income families.

Paradise isn’t lost for the masses - at least not yet.

Meanwhile, life continues to get more golden for those who can afford to live in California, thanks to draconian regulations that jack up the price of everything from domestic water to housing.

 

This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209-249-3519.

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