High costs driving people out of LA, into Inland Empire, data show

ByRob McMillan and Grace Manthey KABC logo
Thursday, February 16, 2023
High prices driving people out of California's urban areas
EMBED <>More Videos

More and more people are leaving California's urban areas like Los Angeles and moving into less-expensive communities like the Inland Empire - or exiting the state altogether.

RIVERSIDE, Calif. (KABC) -- For the last several years, more people have moved away from California than have moved in. But within the state, more suburban areas are seeing gains, recent federal numbers show.

The biggest factor: money.

"The cost of housing and rent in the three coastal counties, LA, Orange and San Diego, has gotten ridiculously high," said economist John Husing.

Anecdotally, Riverside-based Burgess Moving and Storage general manager Ed Coelho has heard similar reasons for people moving.

"The main reason is people are looking for where their money goes a little further than here," Coelho said.

Decisions to move, he said, also seem to be fueled in part by the pandemic.

"They were already planning on leaving the state, but I think this triggered them to get out a little sooner than what they had originally planned," Coelho said.

The Los Angeles metro area, which includes LA and Orange counties, saw the second-largest net loss in households and businesses in recent years. There were nearly 400,000 more address changes away from the area than into the area.

That's according to U.S. Postal Service change of address data from 2018 through the end of 2022.

The area with the largest net loss was metropolitan New York, with more than 800,000.

Other areas with large losses include Chicago, San Francisco and Boston.

While a loss of nearly 400,000 households and businesses is significant, it's important to note that many of these areas are some of the most populated in the country. There are more than 4 million households in the Los Angeles metro area alone.

Among the areas with gains in households and businesses: Phoenix, Houston and the Inland Empire.

Click here to open this table in a new window.

"With all the warehousing that's growing in the area, and the cost of gas, people are moving to the Inland Empire and they're staying here," Coelho said.

Traditionally, Coelho said many would move to the Inland Empire but still commute to places like Orange County to work. But that's changing.

"We're seeing a lot of people stay in the Inland Empire and not commuting as much, maybe working remotely," Coelho said.

Husing said logistics and e-commerce have helped make the Inland Empire one of the fastest growing areas in the state.

Zillow data shows the typical value of a home in LA and Orange counties at the end of January was $856,000. That's about 60% higher than the $538,000 in the Inland Empire.

Click here to open this graph in a new window.

But these bargains might not be around for long.

"When the Inland Empire houses are going for half a million dollars at the median, meaning half above that and half below that, I mean that is extraordinarily high. And it really means that affordability is even vanishing out here," Husing said.

Another factor both Husing and Coelho pointed to was politics.

"There is a political dimension to this, in that the states people are moving to tend to be quite conservative. And a lot of places they're leaving tend to be pretty liberal communities," Husing said.