Why People Are Leaving California: Housing, Taxes, and Insurance

People are leaving California mainly because they can’t afford to stay. Housing costs more than double the national average, the country’s highest income tax rates, the arrival of remote work, and a stack of quality-of-life pressures from homelessness to a collapsing home insurance market have combined to push residents toward other states every single year since 2001. In 2025 alone, California lost a net 216,000 residents to domestic migration.¹

The scale is substantial. Between 2010 and 2024, nearly 10 million people moved out of California to other states while just over 7 million moved in, a net loss of roughly 3 million.² From 2020 through 2024, net domestic losses hit 1.46 million, partially offset by 934,000 international arrivals.³ The state’s population sat at roughly 39.5 million as of July 2025, propped up by births and immigration rather than domestic flow.¹

Housing Costs Are the Top Reason

When pollsters ask Californians why they are leaving, one answer dominates. A 2024 Joint Venture Silicon Valley survey found 66% of Bay Area residents planning to leave cited housing costs, more than any other factor.⁴ Since 2015, roughly 900,000 people who left the state named housing as their primary motivation.²

The numbers explain the exits. The median single-family home price statewide was $823,180 in January 2026, according to the California Association of Realtors. In 11 counties, including San Mateo, Santa Clara, San Francisco, and Orange, the median topped $1 million.⁵ Only about 23% of California households could qualify for a mortgage on a mid-tier home in late 2025, down from 35% in 2019. Monthly mortgage payments on a two-bedroom home averaged roughly $4,350, and rent for a comparable unit ran about $2,680.⁶

The strain extends beyond housing. California’s overall cost of living runs 44% above the national average, driven by housing costs that run 118% higher. Utilities cost 32% more than the national average, transportation 36% more, and healthcare 17% more. In the most expensive metros the gap is larger still: Sunnyvale’s cost of living runs 129% above the national average, San Jose 84%, and Los Angeles 52%.⁷

Taxes Push Both Residents and Employers Out

California’s tax structure ranks among the heaviest in the country and sits alongside housing on nearly every list of reasons for leaving. The state’s personal income tax is graduated from 1% to 13.3%, the highest top rate of any state, and an additional payroll tax brings the effective top rate on wages to 14.4%. Combined state and local sales tax averages 8.98%, and the corporate rate is 8.84%. On the Tax Foundation’s 2026 State Tax Competitiveness Index, California ranks 48th out of 50 states.⁸

The states absorbing the most California migrants, Texas and Nevada chief among them, either have no state income tax or significantly lower rates. In the 2024 Bay Area survey, 37% of residents planning to leave cited taxes as a reason.⁴ The dollars are real: IRS data for 2022 show affluent migrants took nearly $24 billion in adjusted gross income out of the state that year.³

Employers have followed the same path. Tesla, Oracle, Hewlett Packard Enterprise, Chevron, and SpaceX all moved their headquarters to Texas. Charles Schwab’s founder pointed to “costs of doing business” being “much higher” in California, Chevron’s spokesperson said California policies “raise costs and consumer prices,” and Playboy’s CEO called the state “anti-business.”⁹ The California Policy Center counted 789 corporate headquarters moves out of the state between 2011 and 2021.¹⁰

Remote Work Broke the Old Bargain

For years, California’s high wages and job density offset its costs. Remote work changed that. Workers who once had to live near their employer can now keep a California salary while moving to a state where houses cost half as much.

The shift is documented. Before the pandemic, California had a net inflow of about 5,000 workers annually in heavily remote-capable fields such as technology, finance, and marketing. By 2021 that reversed sharply: roughly 80,000 such workers left while only 43,000 arrived.¹¹ In remote-capable job sectors overall, California’s growth since the pandemic has been 7%, compared with 16% in the rest of the country.¹²

The Public Policy Institute of California found remote work accounts for the “entire increase in movers out of the Bay Area” since the pandemic, with net outmigration more than doubling from 4.1 to 9.3 per thousand residents. PPIC described the trend as a “band-aid” for the broader housing crisis, allowing well-paid tech workers to escape high costs while lower-income Californians who can’t work remotely remain trapped or leave under greater financial duress.¹³ California employers are also hiring remote workers in other states rather than filling positions locally, further eroding the state’s job base.¹²

Homelessness and Quality of Life

Finances aren’t the only push. In the Bay Area survey, 49% of those planning to leave cited quality-of-life concerns and 28% named homelessness specifically.⁴

California has the largest homeless population in the nation, over 187,000 people as of 2024, two-thirds of them unsheltered compared with just 5% in New York. In San Francisco, 88% of residents in a 2021 survey said homelessness had worsened, and 70% said their quality of life had declined. In Los Angeles, 64% said the problem had negatively affected their immediate neighborhoods.¹⁴ By 2024, voters ranked homelessness as the top problem facing the state in a PPIC survey.¹⁵

Public frustration also drove the passage of Proposition 36 in November 2024, which won 70% of the vote. The measure reclassified certain theft and drug offenses back to felonies, reversing portions of 2014’s Proposition 47, and created pathways to compel substance-abuse treatment. Proponents cited a 28% increase in reported shoplifting over the preceding five years.¹⁶

Wildfires and the Insurance Crisis

A newer pressure is the homeowner insurance market. Average premiums rose 84% between late 2020 and March 2026.¹⁷¹⁸¹⁹

As private coverage retreats, enrollment in the California FAIR Plan, the state’s insurer of last resort covering only fire, smoke, lightning, and internal explosions, has surged. The plan now covers more than 680,000 policies, a 152% increase since 2022.²⁰²¹ Homeowners who lose coverage entirely can find their property effectively unmortgageable, forcing a choice between absorbing catastrophic risk and leaving.¹⁸

Who’s Leaving and Where They Go

The people departing aren’t a uniform group, but research shows clear patterns. A March 2026 study by the California Policy Lab analyzing data from 2016 to 2025 found movers tend to be younger (average age 41.6 versus 48.8 for those who stay), carry roughly twice the student debt of their neighbors, have lower credit scores, and are less likely to already own a home.²² The people California is losing are often those who can least afford to stay.

Lower-income residents and those without a college degree leave at disproportionately high rates. Over the past decade, the state has lost more than 10% of its lower-income adult population and over 8% of adults without a college degree on a net basis.² Between 2016 and 2020, white residents left at the highest net rate (7.3 per 1,000), followed by African Americans (6.5 per 1,000) and Latinos (3.6 per 1,000). Asian Americans were the only major group with a net inflow.²³ Remote work has also pulled a growing share of higher-income movers into the mix, with departures from well-off neighborhoods rising 6.4 percentage points over the last decade.²⁴

The top destination states in 2024 were Texas (77,161 departures), Nevada (53,289), and Arizona (52,383), together absorbing more than a quarter of the 662,100 people who left for another state that year.²⁵ On a per-capita basis Nevada is the top net recipient (81 former Californians per 10,000 residents annually), followed by Idaho, Oregon, and Arizona. Texas ranks 11th and Florida 20th by that measure, suggesting proximity matters more than popular narratives often suggest.²²

Does Leaving Actually Pay Off?

For most who go, the financial math works. The California Policy Lab found movers relocate to neighborhoods where total monthly housing costs (mortgage or rent, utilities, taxes, and insurance) run an average of $672 lower. Median home prices in destination neighborhoods are nearly $398,000 (48%) cheaper, and rents are about $638 (30%) less.²⁴

Homeownership is the most striking outcome. Seven years after leaving California, former residents are 48% more likely to own a home than comparable people who stayed. Incomes in destination communities are roughly 8% lower, but the study concluded savings on housing far outweigh the pay cut.²² For many Californians, leaving is the only realistic path to building wealth through owning a home.

And the gap keeps widening. During 2025, nearly 150,000 more people left the state than arrived from other states, and the problem is partly that fewer people want to come: 42 states sent fewer people to California between 2020 and 2025 than they did before the pandemic.²⁴

1
California Department of Finance. E-2 California County Population Estimates and Components of Change by Year, July 1, 2020-2025
2
Public Policy Institute of California. Who’s Leaving California — and Who’s Moving In
3
Governing. California’s Long-Term Population Slide Threatens Its Economy
4
The Center Square. Joint Venture Silicon Valley Survey on Bay Area Residents Planning to Leave
5
KTLA. California Home Prices January 2026
6
California Legislative Analyst’s Office. California Housing Affordability Tracker
7
RentCafe. Cost of Living Calculator – California
8
Tax Foundation. California Tax Data
9
Business Insider. Companies Leaving California List
10
Silicon Valley.com. Companies Leaving California Map
11
Courthouse News Service. Report Finds Remote Work Driving California Job Loss and Migration
12
California Legislative Analyst’s Office. The Rise of Remote Work: Effects on California’s Labor Market
13
Public Policy Institute of California. How Has Remote Work Affected Migration Around the State
14
Stanford Institute for Economic Policy Research. Homelessness in California: Recent Challenges and New Horizons
15
CalMatters. California’s Homelessness Crisis Explained
16
CalMatters. Retail Theft and Proposition 36
17
Stanford Woods Institute. California’s Home Insurance Crisis Spreading Beyond Wildfire Country
18
CalMatters. Home Insurance Fails California Families
19
PBS NewsHour. California Faces Insurance Crisis as Homeowners Lose Coverage Amid Extreme Weather
20
IJPR. California’s FAIR Plan Will Hike Its Rates This Fall
21
CalMatters. Homeowners Insurance Costs Rising in California
22
California Policy Lab. Priced Out: Relocation Amidst California’s Affordability Crisis
23
Public Policy Institute of California. Racial and Ethnic Differences in Who’s Leaving California
24
California Policy Lab. Priced Out: New Research Reveals Who Is Leaving California
25
USAFacts. What States Are People Moving To and From – California