News: Californians are Moving to Florida Due to Affordable Housing and Fewer Building Regulations, According to an Economist
It's no secret that relocators have recently favored moving to Florida. Recent data from the Florida Department of Motor Vehicles shows that people from New York, New Jersey, and California are among the states with the most people applying for Florida driver's licenses. In fact, according to the New York Post, the data showed that around 30,000 Californians applied for a Florida license in 2022.
Economist Vance Ginn believes he knows one of the major reasons that Californians are coming to Florida, and he believes it is fueled in part by saving money, as follows.
Cheaper Housing Fueled by Fewer Roadblocks to Real Estate Development: Ginn, who is chief economist at the Pelican Institute for Public Policy, recently co-authored an opinion piece in the Washington Examiner. In it, he laid out his argument that the primary motivation for relocating Californians to Florida and Texas is housing affordability, writing, in part:
"Housing affordability has been a major factor driving Californians to states such as Texas and Florida, where they can realistically afford the American dream of owning a home."Ginn further explains that Florida and Texas have less expensive housing because they implement fewer "bureaucratic bottlenecks" for real estate development, writing:
Florida has done a good job winning the war against excessive regulation to make way for more home construction...It’s not complicated: The states and cities that will prosper in the coming decade will be those that allow a less regulated housing market so the quantity of housing supplied can efficiently meet the quantity demanded."
U.S. News & World Report did conclude that California was the most regulated state in America. And although Ginn's article is written as an opinion piece, there is some evidence to support some of its claims, as follows.
California has 4 of the 10 Most Expensive Cities in the United States: According to a 2022 study by Rocket Mortgage, the markets of San Francisco, Los Angeles, San Jose, and San Diego were among the 10 most expensive cities in the United States, making up almost half of the country's most expensive places to live.
Generally Speaking, Housing in California is Much More Expensive than Housing in Florida: Although Florida's real estate markets have risen dramatically, they are still reasonably priced when you compare them to California's.
According to Zillow, the average home value in Florida is $404,939. In California, that same number is $760,644. So while some Floridians and those wishing to buy a home in Florida may lament the rising real estate markets, someone coming from California may see Florida real estate prices as a bargain.
Differences in State Income Tax: Although Ginn's writings didn't bring up the differences in state income tax, there are key differences between these two states that affect the cost of living.
California's state income tax ranges from rates of 1% to 12.3%, and the sales tax rate is 7.25% to 10.75%. Florida does not have a state income tax, and its sales tax rate is 6%.
Originally published at Newsbreak.
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Vance Ginn, Ph.D.