California nightmare

Published by The Mail on Sunday (23rd May, 2021)

Scott Thatcher and his wife Angela were born in California and love the sun-kissed Golden State. But two months ago they sold their home, packed up their belongings and travelled 1,700 miles with their three sons to start a new life in Texas.

Despite earning good salaries with secure jobs as a driver and a nurse, the family’s combined income of about $140,000 (£99,000) a year was not enough to prosper in their town of Modesto, about 90 minutes east of San Francisco.

‘We were surviving but not thriving,’ said Scott, 35. ‘We were getting by but it felt like we would never really get ahead.’

The pandemic was the final straw after politicians shut down schools in the state. Now the couple have a far bigger home in Fort Worth – and although they earn slightly less, they take home more money thanks to lower taxes in Texas. As Scott says: ‘You pay a high premium for the Californian lifestyle.’

But increasingly, people are deciding this is a premium no longer worth paying and joining the exodus from America’s most populous and economically powerful state.

For the first time in a glorious 171-year history that attracted thousands seeking fortunes during the 19th Century Gold Rush, gave birth to the global movie industry and unleashed the digital revolution, California has seen its population – currently just under 40 million – decline.

It shrank by 182,083 last year – equivalent to all the citizens living in the coastal idylls of Santa Monica and Santa Barbara combined.

Families and firms are being driven away by the high cost of living, crime fears, hefty taxes, inadequate housing, interfering officials, persistent political failures, red tape, raging wildfires and the squalor of streets littered with homeless drug addicts.

‘It is very sad,’ said Scott. ‘I will always love California but it has changed. It is not what it was when I was a kid, or even five years ago. I could never go back.’

California – long proclaimed as a liberal nirvana and run by Democrats – is even losing one of its seats in Congress for the first time owing to the population fall. Inevitably, Republicans say people are voting with their feet to flee to conservative states such as Florida, Idaho and Texas.

The exodus includes prominent names such as the tech titan Elon Musk, who sold his two Bel Air homes and moved to Texas, where he has a space launch site and his electric car firm Tesla is building a plant. No doubt the multi-billionaire will benefit hugely from the fact Texas does not have income tax, relying instead on local sales and property taxes.

He compares California to a triumphant sports team: ‘They tend to get a little complacent, a little entitled, and then they don’t win the championship any more.’

Apple is also building a new campus in Texas, while several other major tech firms, including Oracle and Hewlett Packard Enterprise, have moved their headquarters to the Lone Star state.

Delian Asparouhov is typical of those who turned California into such a powerhouse: a computer geek who attended the top-ranking Massachusetts Institute of Technology, launched a space start-up, was backed by a billionaire and became a venture capitalist in the state. Yet this month the Bulgarian-born entrepreneur, still ony 27, bought a house in Miami, Florida.

He said: ‘Silicon Valley has a stifling intellectual climate with its mono-culture that only allows one viewpoint to be expressed. It seems to espouse the same socialist values as the Soviet Union. So I am fleeing just like my parents fled a similar system for America when I was a kid.’

When he suggested on Twitter that Silicon Valley should move from California, the mayor of Miami, Francis Suarez, responded by asking if he could help.

Asparouhov says he has 60 friends and former colleagues who have made the same move. ‘California is a beautiful place with beautiful people but it’s fraying. It is anti-growth, espouses diversity but does not implement it, and parts look like a war zone with encampments of homeless people filled with mentally ill people who need help that never arrives.’

Asparouhov believes so many firms are opening in Miami that it could become America’s leading technology hub within a decade.

Yet perhaps the most profound problem confronting California is the pessimism that plagues so many families in the state. ‘People can’t live a middle-class lifestyle on a middle-class income, so they feel frustrated and many move,’ said Dowell Myers, an expert at the University of Southern California on demographic change.

One Berkeley University survey last year found more than half of registered voters had thought about moving out of the state, blaming housing costs, high taxes and concerns over the dominant political culture.

Marie and Scott Bailey relocated their family to a Dallas suburb four years ago for financial and political reasons, almost doubling the size of their home. ‘We’re conservatives and the world changed when Donald Trump won,’ she said. ‘If you talked about him, you’d be shunned by friends and in the neighbourhood mommies’ group.’

Now she runs an estate agency that has helped 80 other families follow suit. She drives a Tesla with a ‘Move2TX’ number-plate and runs a Facebook site offering advice to Californians toying with the idea of decamping to Texas. It has 33,000 followers.

Her clients include Lynn and Curt Seeden, who moved two weeks ago after their photography business crashed in the pandemic lockdown and efforts to downsize their family home in California failed since nothing suitable was affordable.

‘We intended to stay in California since we loved our town of Fountain Valley, knew everyone there and ran its magazine,’ said Lynn, 58, a former journalist. ‘We’d never even heard of Argyle, which is now our hometown.

‘It was hard to tear ourselves away but the state has changed since we grew up. The taxes are crazy. Crime and homeless people are everywhere. Even the thinking has changed with a culture that seeks to restrict everything.’

Clearly the pandemic, which hit California hard and sparked a huge surge in home-working, played a role in the population flight. Other factors, such as fewer births and slowing immigration from other countries, are far from unique to this state.

Yet the issues spotlight longer-term trends for California after decades of explosive growth that culminated in the 1980s with the arrival of six million people hunting jobs in the booming defence, media and technology sectors.

Since the subsequent economic downturn, California has been losing people to other parts of the US. Over the past decade, more than six million people have left – with only 4.9 million Americans moving to the state. The rate of arrivals from abroad also fell sharply.

Data from 2019, before the pandemic, shows 170,000 Californians left for other states, with Texas the most popular destination, followed by Arizona and Nevada.

Those who continue to chase their Californian dream find homes costing twice the national average, fuel more expensive than anywhere else in America, and local taxes among the country’s highest. The result is widening inequality as richer people replace those unable to afford the high house prices, weary of long commutes on packed motorways or trapped in areas surrounded by unremitting social problems.

Last year I reported on the disturbing scenes in San Francisco – a city with more billionaires per capita than any other on the planet – where a tide of homeless, drug-addicted and mentally ill people had washed up by glittering shops selling luxury goods.

Residents told me society seemed to be falling apart as we watched dealers sell drugs beside police patrol cars, zombified people urinating on the pavement, and dishevelled addicts smoking fentanyl – an opioid 50 times stronger than heroin.

Returning to the city, one contact told me of his anger at seeing the drug trade continuing during the pandemic when lockdown meant his own, legitimate business had to shut – and of finding a man dead from an overdose on his walk home. ‘They said he’d been dead for a couple of hours,’ he said. ‘How can the city allow this awful stuff to carry on?’

Almost three times as many people died last year from fentanyl overdoses than Covid in San Francisco. Researchers at the California Policy Lab recently said the city is suffering ‘a unique and dramatic exodus’, with one in five people leaving. Another snapshot found many tech workers deserting the Bay area, triggered by the home-working boom.

Younger people are most likely to contemplate leaving, according to polls – even those who sympathise with the progressive politics of San Francisco, as I discovered in the sun-dappled Inner Sunset district beside Golden Gate Park.

This is an area popular with families, with teenage boys playing baseball and young girls kicking a football in the gorgeous park. Homes are considered comparatively affordable here – yet the median price is more than $1million (about £700,000).

I met Kevin, a 36-year-old sound designer, who told me: ‘We won’t stay long-term as we have two young kids and want a backyard. We might move to Portland [in neighbouring Oregon] since it has the same political culture, similar climate and is near the coast.’

Meanwhile, as state leaders grapple with such complex issues, politicians are embroiled in efforts to remove the Democratic governor, Gavin Newsom, and the San Francisco district attorney Chesa Boudin from office. ‘We’re fighting to save the city because so many people have left,’ said Richie Greenberg, a former Republican mayoral candidate who led one recall election campaign.

Alternative candidates for governor include transgender activist and former Olympian Caitlyn Jenner, who says her bid was inspired by a fellow private plane owner moving to Arizona. ‘I can’t take it any more. I can’t walk down the streets and see the homeless,’ he told her.

A rival candidate is 29-year-old YouTube star Kevin Paffrath, who was born in Germany and claims to have made millions from property. He announced his bid with a video saying he had been ready to join the exodus due to high taxes and stifling red tape.

‘California should be a beacon for the world but it has become a laughing stock,’ he told me. ‘This is a one-party state but nothing ever seems to get done. It’s an embarrassment to call California the Golden State these days.’

Little wonder senior Democratic figures are on the defensive. One insisted to me that the population exodus was ‘largely a myth’ spread by political enemies. ‘The whole notion that people are fleeing California in droves is false,’ he said.

This gilded state often sets the cultural and political agenda for the rest of the world. So we should take note as California confronts a barrage of almost biblical struggles – from drought and fires through to drugs, homelessness, obscene inequality and now a flight of fed-up citizens failed by their leaders.

Gil Duran, a columnist on the Sacramento Bee newspaper and former spokesman for a liberal governor, told me that his own family had quit California for Kentucky when he was a teenager at a time when Republicans ran both the state and the country.

He is dismissive about ‘over-hyped’ talk of departures. Yet he urges politicians to ‘find a way to make California a place where middle-class and working families can survive, thrive and raise a family.’

Duran argues that economic growth cannot be sustainable for ever. ‘Maybe a little pause is a good thing,’ he said. ‘The pandemic has exacerbated problems but perhaps it also opens up the possibility for change.’

But for countless families such as the Thatchers, it is already too late as they join the exodus.

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