High Cost of Living Drives Californians to Seek Affordable Housing Elsewhere
- Apr 9
- 4 min read
By David Greenwald April 9, 2026
SACRAMENTO, Calif. — A new report from the California Policy Lab finds that Californians who leave the state are moving to significantly more affordable areas and becoming more likely to own homes, offering one of the clearest pictures yet of how the state’s high cost of living is reshaping migration patterns.
Using anonymized longitudinal data tracking households from 2016 to 2025, researchers found that affordability is a central driver behind relocation decisions and that those who leave California often experience measurable financial improvements after moving.
“Californians who leave move to much more affordable areas and see large increases in homeownership, on average,” the report states.
The findings show that, on average, households that leave California relocate to neighborhoods where monthly housing costs are $672 lower. Over time, that shift translates into greater access to homeownership, with former residents becoming 48% more likely—or 11 percentage points more likely—to own a home within seven years.
The report concludes that “affordability plays a major role in Californians’ relocation decisions,” reinforcing a growing body of research suggesting that housing costs are not only a local policy issue but a central factor in statewide demographic change.
A companion analysis highlighted by researchers at University of California, Berkeley, underscores the same trend, noting that the high cost of living is suppressing population growth by discouraging both in-migration and long-term retention of existing residents.
“High costs for essentials also discourage out-of-staters from moving in,” the California Policy Lab report explains, pointing to a dual dynamic in which the state is simultaneously losing residents and attracting fewer newcomers.
That imbalance has contributed to a persistent gap between exits and entrances, although the report notes that the disparity has narrowed somewhat since the peak migration disruptions of the COVID-19 pandemic.
“While exits have moderated from their pandemic peak, there are now fewer people moving into the state,” the report states, adding that this trend “continues to drag on California’s population growth.”
The data also complicate common narratives about who is leaving California.
While outward migration has often been framed as a phenomenon driven by lower-income households, the report finds that “people moving out of California increasingly come from higher-income neighborhoods.”
The share of exits from higher-income communities has risen by 19% over the past decade, suggesting that even relatively affluent areas are not insulated from the pressures of housing affordability.
At the same time, those who leave appear to be financially more vulnerable than their immediate neighbors.
“Those who leave have $5,500 more in student debt, on average, and credit scores that were 17 points lower than their neighbors,” the report notes.
That combination—residing in higher-income neighborhoods while carrying greater debt burdens—suggests that many households are being priced out despite appearing, on paper, to be relatively well-positioned economically.
Researchers emphasize that these patterns reflect structural cost pressures rather than short-term fluctuations.
“Growing costs of living are squeezing Californians’ pocketbooks and causing some households to consider relocating,” the report states, framing migration as a response to sustained economic strain rather than temporary dislocation.
Geography also plays a significant role in where Californians go.
“Proximity drives relocation popularity, with Nevada claiming the top spot,” the report finds, noting that nearby states receive the largest share of former California residents on a per-capita basis.
Nevada leads the list, receiving a net 81 Californians per 10,000 residents annually, followed by Idaho, Oregon, and Arizona.
The findings challenge widely circulated narratives about migration to more distant states.
“Contrary to most headlines, Texas and Florida rank only 11th and 20th, respectively,” the report states.
Instead, the data suggest that most households prioritize proximity, likely due to employment ties, family connections, and the logistical ease of moving shorter distances.
“Using unique data that anonymously tracks the same households over time from 2016 to 2025, this report examines how many Californians are moving, who is leaving the state, where they are going, and what happens to their finances after they move,” the report explains.
That longitudinal approach allows researchers to move beyond aggregate statistics and examine how individual households’ financial situations evolve before and after relocation.
The results show a consistent pattern: those who leave tend to move to lower-cost areas and experience improved financial outcomes, particularly in terms of housing affordability and homeownership.
At the same time, the report suggests that California’s affordability challenges are affecting even those who remain.
By reducing in-migration and increasing out-migration, high costs are reshaping the state’s population composition in ways that could have lasting consequences.
The report does not prescribe specific policy solutions but makes clear that housing affordability is central to the issue.
“Affordability plays a major role in Californians’ relocation decisions,” the report reiterates, emphasizing that cost pressures are a primary driver of both individual behavior and broader demographic trends.
The findings arrive as California continues to grapple with a housing shortage, rising rents, and increasing pressure from state mandates to build more housing across income levels.
While the report focuses on migration outcomes, its conclusions align with a growing consensus among policymakers and researchers that expanding housing supply is critical to stabilizing costs and retaining residents.
At the same time, the data suggest that even incremental improvements in affordability could have significant impacts on household stability.
The $672 average reduction in monthly housing costs experienced by those who leave represents a substantial shift in disposable income, potentially enabling savings, debt reduction, and eventual homeownership.
For many households, that difference appears to be decisive.
“Californians who leave move to much more affordable areas and see large increases in homeownership, on average,” the report states, underscoring the extent to which housing costs shape life trajectories.
As California continues to confront its affordability crisis, the report provides a detailed empirical foundation for understanding how those pressures translate into real-world decisions.
The data show not only who is leaving and where they are going, but also how those moves affect their financial futures—offering a clearer picture of the stakes involved in the state’s ongoing housing debate.
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