Cost of Housing Is Main Driver of Migration from Superstar Cities

(p. B1) Last month the Census Bureau confirmed a confounding dynamic taking hold across the American landscape: Superstar cities, the nation’s economic powerhouses, hotbeds of opportunity at the cutting edge of technological progress, are losing people to other parts of the country.

For the first time in at least a decade, 4,868 more people left King County, Wash. — Amazon’s home — than arrived from elsewhere in the country.

Santa Clara County, Calif., home to most of Silicon Valley, lost 24,645 people to domestic migration, its ninth consecutive annual loss.

The trend is becoming widespread. Eight of the 10 largest metropolitan areas in the country, including those around New York, San Francisco, Los Angeles and Miami, lost people to other places in 2018. That was up from seven in 2016, five in 2013 and four in 2010. Migration out of the New York area has gotten so intense that its total population shrank in 2018 for the second year in a row.

. . .

(p. B5) Research by Peter Ganong from the University of Chicago and Daniel Shoag of Harvard suggests that housing costs are a principal driver of the change in migration decisions: As the highly educated have flocked to superstar cities, they have pushed housing prices way beyond the reach of people earning less. Continue reading “Cost of Housing Is Main Driver of Migration from Superstar Cities”

Firms Moving from Silicon Valley to Texas

(p. A3) SAN FRANCISCO–California’s economy is adding jobs far faster than affordable places to live, forcing some employers to leave the state as they expand.
. . .
Karen Holian, 44 years old, joined the startup Lottery.com when it was founded here in 2015. Though a San Francisco native, Ms. Holian, a marketing manager, was excited when the company last year moved to Austin, Texas, because she could finally plan to buy a home.
“In San Francisco, that never seemed like a possibility,” she said. A mother of two, she is for now renting a four-bedroom house for $2,000 a month, a third of what a comparable place costs in her hometown.
Lottery.com CEO Tony DiMatteo said that as the company grew, he found it difficult to persuade current and prospective employees to move to the area. “We can give them a much better bang for their buck if we’re not in San Francisco,” he said.
. . .
Carl Guardino, chief executive of the Silicon Valley Leadership Group, said CEOs tell him “that any new job that doesn’t absolutely need to be in the Bay Area is located outside of the Bay Area.” The public-policy advisory group counts some 360 companies, including Silicon Valley’s largest, as members.
. . .
Texas has drawn more companies leaving California over the past decade than any other state, according to research by Joe Vranich, a relocation consultant who encourages businesses to leave California.
Housing costs are “a major selling point for us,” said Mike Rosa, senior vice president of economic development for the Dallas Regional Chamber. “It’s a factor in just about every [relocation] search we see.”

For the full story, see:
Nour Malas. “Firms Quit California Over Costs.” The Wall Street Journal (Tuesday, March 20, 2019): A3.
(Note: ellipses, and bracketed year, added; bracketed word, in original.)
(Note: the online version of the story has the date March 19, 2019, and has the title “California Has the Jobs but Not Enough Homes.” The sentence quoting Karen Holian appeared in the online, but not the print, version.)

Entrepreneur Shafer Learned from Sweet Serendipitous Mistake

(p. 24) John Shafer, who abandoned a career as a Chicago publishing executive to join the vanguard of a new generation of vintners in California’s Napa Valley, died on March 2 [2019] in the city of Napa.
. . .
Mr. Shafer (pronounced SHAY-fer) was 47 when he resolved to acquire a winery as an absentee owner and one day retire as a gentleman farmer. His horticultural experience had been limited to planting flowers in his front yard.
But within six months of that decision, he took a leap. He left his job at what he described as an ossified company to take up a second career in which he could be his own boss and work outdoors.
. . .
. . . as a newcomer to the Napa Valley, which was just beginning to attract winemakers who popularized individual vineyards, he had neglected to hire a sufficient number of grape-pickers far enough in advance. That left the fruit riper — and sweeter — than the industry norm when the grapes were harvested.
“Shafer thought he ruined his wine, but instead it turned out to be the ripe signature style that has defined Shafer wines for the past four decades,” Wine Spectator magazine said.

For the full obituary, see:
Sam Roberts. “John Shafer, Executive Turned Winemaker, Dies at 94.” The New York Times, First Section (Sunday, March 10, 2019): 24.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the obituary has the date March 7, 2019, and has the title “John Shafer, 94, Who Made Triumphant Leap Into Winemaking, Dies.”)

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“Artificial Barriers to Housing Production”

(p. A3) America’s housing shortage is more wide-ranging than cloistered coastal markets, stretching from pricey locales such as California and Massachusetts to more surprising places, such as Arizona and Utah.
Some 22 states and the District of Columbia have built too little housing to keep up with economic growth in the 15 years since 2000, resulting in a total shortage of 7.3 million units, according to research to be released Monday by an advocacy group for loosening building regulations.
California bears half of the blame for the shortage: The state built 3.4 million too few units to keep up with job, population and income growth.
. . .
“The artificial barriers to housing production aren’t constrained just to California,” said Mike Kingsella, executive director of the Up For Growth National Coalition. “As we dug into the numbers behind this, at a local market level, we’re seeing a pronounced affordability challenge in places like even Arizona.”
Arizona and Utah are among the states that have built too little housing in the 15-year period, according to the report.

For the full story, see:
Laura Kusisto. “Shortages in Housing Are Widespread.” The Wall Street Journal (Tuesday, April 17, 2018): A3.
(Note: ellipsis added.)
(Note: the online version of the story has the date April 16, 2018, and has the title “Homebuilding Isn’t Keeping Up With Growth, Development Group Says.”)

Robots Help Montoya Fulfill His Father’s Wish for Him to Avoid Manual Labor

(p. A15) SALINAS, Calif. — As a boy, Abel Montoya remembers his father arriving home from the lettuce fields each evening, the picture of exhaustion, mud caked knee-high on his trousers. “Dad wanted me to stay away from manual labor. He was keen for me to stick to the books,” Mr. Montoya said. So he did, and went to college.
Yet Mr. Montoya, a 28-year-old immigrant’s son, recently took a job at a lettuce-packing facility, where it is wet, loud, freezing — and much of the work is physically taxing, even mind-numbing.
Now, though, he can delegate some of the worst work to robots.
Mr. Montoya is among a new generation of farmworkers here at Taylor Farms, one of the world’s largest producers and sellers of fresh-cut vegetables, which recently unveiled a fleet of robots designed to replace humans — one of the agriculture industry’s latest answers to a diminishing supply of immigrant labor.
The smart machines can assemble 60 to 80 salad bags a minute, double the output of a worker.
Enlisting robots made sound economic sense, Taylor Farms officials said, for a company seeking to capitalize on Americans’ insatiable appetite for healthy fare at a time when it cannot recruit enough people to work in the fields or the factory.

For the full story, see:
Miriam Jordan. “Farms Turn to Robots as Labor Pool Shrinks.”The New York Times (Saturday, Nov. 24, 2018): A15.
(Note: the online version of the story has the date Nov. 20, 2018, and has the title “As Immigrant Farmworkers Become More Scarce, Robots Replace Humans.”)

With High Minimum Wages and Living Costs, S.F. Restaurants Cannot Afford, or Even Find, Servers

(p. D1) SAN FRANCISCO — Souvla, a Greek restaurant with a devoted following, serves spit-fired meat two ways: in a photogenic sandwich, or on a photogenic salad, either available with a glass of Greek wine. The garnishes are thoughtful: pea shoots, harissa-spiked yogurt, mizithra cheese.
The small menu is so appealing and the place itself so charming that you almost forget, as a diner, that you have to do much of the work of dining out yourself. You scout your own table. You fetch and fill your own water glass. And if you’d like another glass of wine, you go back to the counter.
Runners will bring your order to the table, but there are no servers to wait on you here, or at the two other San Francisco locations that Souvla has added — or, increasingly, at other popular restaurants that have opened in the last two years: RT Rotisserie, which is roasting cauliflower a few blocks away; Barzotto, a bistro serving hand-rolled pasta in the Mission district; and Media Noche, a Cuban sandwich spot with eye-catching custom tilework.
Inside these restaurants, it’s evident that the forces making this one of the most expensive cities in America are subtly altering the economics of everything. Commer-(p. D6)cial rents have gone up. Labor costs have soared. And restaurant workers, many of them priced out by the expense of housing, have been moving away.
Restaurateurs who say they can no longer find or afford servers are figuring out how to do without them. And so in this city of staggering wealth, you can eat like a gourmand, with real stemware and ceramic plates. But first you’ll have to go get your own silverware.
. . .
On July 1 [2018], the minimum wage in San Francisco will hit $15 an hour, following incremental raises from $10.74 in 2014. The city also requires employers with at least 20 workers to pay health care costs beyond the mandates of the Affordable Care Act, in addition to paid sick leave and parental leave.
Despite those benefits, many workers say they can’t afford to live here, or to stay in the industry. And partly as a result of those benefits, restaurateurs say they can’t afford the workers who remain. A dishwasher can now make $18 or $19 an hour. And because of California labor laws, even tipped workers like servers earn at least the full minimum wage, unlike their peers in most other states.
Enrico Moretti, an economist at the University of California, Berkeley, estimates that when housing prices rise by 10 percent, the price of local services, including restaurants, rises by about 6 percent. (The median home price in San Francisco has doubled since 2012.)

For the full commentary, see:
Emily Badger. “Hi! You’ll Be Your Server Tonight.” The New York Times (Wednesday, June 27, 2018): D1 & D6.
(Note: ellipsis, and bracketed year, added.)
(Note: the online version of the commentary has the date June 25, 2018, and has the title “THE UPSHOT; San Francisco Restaurants Can’t Afford Waiters. So They’re Putting Diners to Work.”)

The published version of the Moretti paper, mentioned above, is:
Moretti, Enrico. “Real Wage Inequality.” American Economic Journal: Applied Economics 5, no. 1 (Jan. 2013): 65-103.

Some Democrats Trying to Restrict “Zoning, Environmental, and Procedural Laws” that “Thwart” New Housing

(p. A1) SACRAMENTO — A full-fledged housing crisis has gripped California, marked by a severe lack of affordable homes and apartments for middle-class families. The median cost of a home here is now a staggering $500,000, twice the national cost. Homelessness is surging across the state.
In Los Angeles, booming with construction and signs of prosperity, some people have given up on finding a place and have moved into vans with makeshift kitchens, hidden away in quiet neighborhoods. In Silicon Valley — an international symbol of wealth and technology — lines of parked recreational vehicles are a daily testimony to the challenges of finding an affordable place to call home.
Heather Lile, a nurse who makes $180,000 a year, commutes two hours from her home in Manteca to the San Francisco hospital where she works, 80 miles away. “I make really good money and it’s frustrating to me that I can’t afford to live close to my job,” said Ms. Lile.
. . .
Now here in Sacramento, lawmakers are considering extraordinary legislation to, in effect, crack down on communities that have, in their view, systematically delayed or derailed housing construction proposals, often at the behest of local neighborhood groups.
The bill was passed by the Senate last month and is now part of a broad package of housing proposals under negotiation that Gov. Jerry Brown and Democratic legislative leaders announced Monday was likely to be voted on in (p. A13) some form later this summer.
“The explosive costs of housing have spread like wildfire around the state,” said Scott Wiener, a Democratic senator from San Francisco who sponsored the bill. “This is no longer a coastal, elite housing problem. This is a problem in big swaths of the state. It is damaging the economy. It is damaging the environment, as people get pushed into longer commutes.”
. . .
The bill sponsored by Mr. Wiener, one of 130 housing measures that have been introduced this year, would restrict one of the biggest development tools that communities wield: the ability to use zoning, environmental and procedural laws to thwart projects they deem out of character with their neighborhood.

For the full story, see:

Adam Nagourney and Conor Dougherty. “Housing Costs Put California In Crisis Mode.” The New York Times (Tuesday, July 18, 2017): A1 & A13.

(Note: ellipses added.)
(Note: the online version of the story has the date July 17, 2017, and has the title “The Cost of a Hot Economy in California: A Severe Housing Crisis.”)