I think this has a lot less to do with taxes than it does with the prices of real estate. Buying a house in California is prohibitively expensive for most people, which eats up a huge amount of everyone's disposable income. In Texas, you make less money, but houses and rent are a factor of 2-4 times cheaper for what you get.
I think there are two main reasons for this: proposition 13 and CEQA. Prop 13 keeps property taxes really low, which makes buying and holding onto single-family homes really cheap. This is a giant subsidy for people who have lived in California for a while, but jacks up the prices for everyone else who gets in after them, since low ownership costs translate to high upfront prices.
The California Environmental Quality Act has a different effect that also raises housing prices: empowering NIMBYs. Because any new development can be pretty easily be slowed down/made more expensive/stopped altogether by a bogus CEQA request, new housing isn't getting built in nearly as much as one would expect given the demand. This makes existing housing more valuable, which increases prices even more.
In addition, some municipalities, notably San Francisco, have an insanely regulated rental market that makes renting incredibly difficult for a landlord, which makes it more attractive for people to buy housing instead of rent. This means there's less rental housing to go around, which makes the rent in SF absolutely insane.
Comments
I think this has a lot less to do with taxes than it does with the prices of real estate. Buying a house in California is prohibitively expensive for most people, which eats up a huge amount of everyone's disposable income. In Texas, you make less money, but houses and rent are a factor of 2-4 times cheaper for what you get.
I think there are two main reasons for this: proposition 13 and CEQA. Prop 13 keeps property taxes really low, which makes buying and holding onto single-family homes really cheap. This is a giant subsidy for people who have lived in California for a while, but jacks up the prices for everyone else who gets in after them, since low ownership costs translate to high upfront prices.
The California Environmental Quality Act has a different effect that also raises housing prices: empowering NIMBYs. Because any new development can be pretty easily be slowed down/made more expensive/stopped altogether by a bogus CEQA request, new housing isn't getting built in nearly as much as one would expect given the demand. This makes existing housing more valuable, which increases prices even more.
In addition, some municipalities, notably San Francisco, have an insanely regulated rental market that makes renting incredibly difficult for a landlord, which makes it more attractive for people to buy housing instead of rent. This means there's less rental housing to go around, which makes the rent in SF absolutely insane.