While historically people have been willing to pay higher prices to live in California, recent migratory patterns showing net outflows suggest that some are choosing to move in search of more affordable options.
From housing to fuel, commodities, and services, Californians fork over more than the majority of the country for routine expenses, and according to residents, the downsides are adding up.
“The cost of living in the Bay Area is astronomical,” Luke Wang, owner of Vast Aquacaping—an aquarium consulting service operating in Northern California—told The Epoch Times. “It’s insane.”
Wang moved in 2021 from a 350-square-foot, two-bedroom apartment in Oakland that leased for $2,350 a month to a 1,800-square-foot home in Citrus Heights—situated outside of Sacramento, about 100 miles northeast of Oakland—for $1,800.
With most of his clients in the Bay Area, his commute increased with his new location, and that combined with spiking fuel prices forced him to raise rates to cover the extra expenses, he said.
Current gasoline prices average $4.79 per gallon in California, with fuel experiencing extreme increases since the pandemic, spiking, on average, from $2.80 in May 2020 to $6.29 in June 2022 before retreating to current levels, according to Y Charts—a web-based research and analytics firm based in Chicago.
Diesel has been even higher, rising from $3.18 to $6.87 a gallon during the same time period, with the current price at $4.89, according to the U.S. Energy Information Administration.
The cost impacts every commodity because the nation’s transportation infrastructure relies on diesel fuel, with trucks supplying the majority of delivery services.
Pricing variability for supplies makes forecasting costs difficult, with eight-foot lengths of 2x4 boards swinging from $3.20 to $7 and back again repeatedly over the past 18 months, according to Wang.
His utility costs also spiked in the last year, he said, with his price per unit cost of natural gas increasing from $1.20 to $1.73, all in one unexpected leap.
As a college graduate and business owner, Wang’s story is that of a successful, young entrepreneur, yet he does not expect to have the opportunities that prior generations with similar academic achievements received, due to the cost of living in California.
“I’m 25, and there’s no way I’m ever buying a house,” he said.
His sentiment is shared with millions of working-class Californians and college graduates forced to rent due to a gap between incomes and housing prices in the state.
“California is the single worst state in the nation when it comes to creating jobs that pay above average, while it is at the top of the nation in creating below average and low-paying jobs,” a study released in 2020 by Chapman University, located in Orange County, California, found.
As such, low and middle-income wage earners are mathematically priced out of the housing market in many areas.
The median home price as of March in California is $743,200, compared to a national median of $400,706, according to Redfin—an online residential real estate brokerage firm based in Seattle.
Per capita incomes in California of $41,276 are slightly higher than the national average of $37,638 based on census data, but wages fail to make home-owning a possibility for many in the state.
After scrolling through listings for modest homes priced between $1 million and $3 million in her area of Southern California, Faith Lersey described to The Epoch Times the frustration her family feels when faced with unaffordable housing prices.
A study analyzing the length of time workers would have to save to afford the down payment for a newly constructed home released in 2021 by Knock—a real estate brokerage company headquartered in San Francisco and New York—found that San Francisco Bay Area conditions would require 167 years of savings.
Workers in the Los Angeles metropolitan area would need to save for 125 years, according to Knock’s analysis.
Other areas of the country fared much better, with Houston, Oklahoma City, Atlanta, and San Antonio leading the pack with approximately 12 years of nest egg savings sufficient to buy a new house.
Approximately 39 million people—nearly twice the population of New York—call the Golden State home, according to the most recent Census Bureau statistics released in 2022, representing a drop of 1.3 percent since 2020.
While some of the loss can be attributed to lower birth and higher death rates during the pandemic, the numbers indicate nearly 800,000 more people chose to leave the state than come in over the last two years.
Texas and Florida have drawn a large portion of those fleeing, according to data released by Move Buddha—an online moving company.
The Lone Star State accounted for nearly 15 percent of searches conducted on the site regarding leaving California, according to the company.
Median home sales prices in Texas were $341,200 as of March, according to Redfin, less than half the price for California homes during the same period.
California has the fourth highest cost of living in the U.S., trailing only Hawaii, the District of Columbia, and Massachusetts, according to the Missouri Economic Research and Information Center—a research division of the Missouri Department of Higher Education.
The research center’s study ranked regions by a series of five indices: grocery, housing, utilities, transportation, health, and miscellaneous costs, and in all categories, California ranked near the top of the scale, placing second highest in transportation costs and fifth in housing.
With the sixth highest prices for electricity in the country, according to the study, utility expenses contribute to the affordability dilemma.
Energy bills present a challenge to many families, consuming a significant percentage of low-wage earners’ incomes, according to experts.
“[People] can’t afford to turn on their air conditioning because the rates are so high,” Victor Davis Hanson, a historian at the Hoover Institution, said in the documentary. “The rates are so high deliberately so, so people will not turn on their air conditioning.”
Utility prices in California are disproportionately higher than in many states due to what’s known as the Cap-and-Trade program—which aims, in part, to reduce greenhouse gas emissions—with the law adding what is described as hidden taxes, according to analysts.
Launched in 2013, the program covers several sectors of the energy industry and regulates the amount of carbon allowed to be released, with gradually declining caps on greenhouse gas emissions.
California had generated $19.2 billion in revenue from the program by the end of 2021, according to a 2022 annual report released by the state. These funds are allocated for a variety of climate agendas and programs set by the state.
The costs borne by companies affected by emissions caps are passed on to consumers, according to experts, and some suggest the solution to the cost-of-living crisis lies in a disconnect that exists between policymakers and constituents.
Policymakers often reside in coastal climates where air conditioning is unnecessary, while many Californians live in areas where summers experience extreme temperatures, cresting 100 degrees in many locations, Hanson told The Epoch Times.
“The people that set policies, whether it’s on electric prices or fuel prices, they’re never subject to the consequences of their own ideology,” he said.
