Californians Find Home Means Nevada
You may get mad when you’re stuck in traffic and see a California license plate.
But California is playing a key role in Nevada’s growth, with the state’s population now topping three million.
The U.S. Census says more than 50,000 Californians moved to Nevada from July 2017 to July 2018.
And more are headed our way.
“I think it’s a cost equation. It’s a much cheaper region to live in, especially housing costs. But there’s also an issue of taxation which has changed,” said Robert Lang, the executive director for the Lincy Institute and Brookings Mountain West at UNLV.
Lang explained that when the Trump administration tax cuts went through deductions for state and local taxes were capped at $10,000, which meant a tax increase for high-tax states like California.
“It’s expensive to live in a blue state and then when they move here they move to what is essentially the lowest taxed blue state,” Lang said.
In years past, those moving to Nevada from California were more likely to be retirees, bringing their retirement funds and profits from selling their homes.
That has changed, according to Lang. He said more mid-career people are moving to Nevada. He said those people are filling in jobs that are desperately needed.
“They’re great because the induced labor migration from places like Southern California means that despite the fact that we have not invested properly K through 12 and higher ed somebody else has, a high tax state like California as a matter of fact," Lang said, "Then they’re bringing their human capital to Nevada and they’re bringing their assets to Nevada. Their talents to Nevada and they’re a net positive on almost every level except when you’re trying to find a space in a parking lot.”
Southern Nevada isn't the only place that has seen an influx of people from California. Northern Nevada's high-tech boom has brought people from San Francisco and Sacramento to the Reno/Sparks area.
Mike Kazmierski is the president and CEO of the Economic Development Authority of Western Nevada in Reno.
He agreed with Lang, that the migration east has helped.
“Clearly, growth has its impacts, but we see it as very positive much of the growth here is in the workforce range. So, we’re bringing talent to the region, people who want to work,” he said, “The right kind of growth that will spur our economy for years to come. “
EDAWN, as it is called, is continuing its work to bring in the jobs for the New Nevada. Kazmierski said his team is in California every other week talking with investors, large companies and small startups explaining to them the advantages of relocating to Northern Nevada.
Besides new jobs, Kazmierski said new companies also bring a new understanding to the state.
“In our push to grow the economy here, it’s really helping us understand entrepreneurial growth," he said, "Something we were not good at a decade ago. It helps us understand how to bring the new generation of technology into our community.”
And because of the state's size and its relatively small lawmaking apparatus, new technology can be addressed quicker.
“As a small state, we’re able to adjust and accommodate this next generation of jobs that really isn’t well understood by legislatures," Kazmierski said, "The fact that we’re bringing these jobs in here and developing them here in an environment where our legislature can quickly understand and ramp-up and change much faster than other larger states gives us a competitive advantage.”
For Southern Nevada, the inflow of Californians has brought workers that Southern Nevada has been in need of for many years, Lang said.
“They’re helping us scale the region properly. When we built this region, we built it so fast, we left some sectors behind that were underserved relative to the amount of demand you’d find in a 2.2 [million] person region,” he said.
Now that Southern Nevada is a world leader in gaming technology, hospitality and resort management, well-educated people are vital to moving the region forward.
“Many more people who are in midlife in California hold bachelor's and master's degrees in professional areas relevant from everything from medical technology to business services," Lang said, "And they are just filling in from induced labor migration so many spaces that would have gone empty.”
But with added jobs and educated workers, Californians have brought a more liberal viewpoint.
"It is making Washoe County more liberal," Lang said.
However, he believes it is unlikely that these new residents from California will support higher taxes after they left the state because of high taxes. They have moved the state from a purple state to a blue state.
Lang said it is a Faustian bargain for conservatives in the state. While they're getting new jobs and more workers, they're also getting more liberal voters.
“What we’re seeing is that influx of talent, which includes… a less conservative mindset,” Kazmierski said.
The arrival of Californians hasn't just brought liberal values. It has also contributed to the state's housing crisis, especially in Reno, which is less able to handle growth both Kazmierski and Lang agreed.
Kazmierski said much of the problem in Reno is a hangover from the Great Recession, which decimated the city's construction business and made everyone extremely cautious about overbuilding.
He said currently builders are only adding 30 to 40 new houses a month but the waiting lists are 600 to 700 people deep.
“They’re not willing to go in and put that entire new development in and invest $30 million, $40 million, $50 million in roads… to the 500 or 150 or 200 houses a month that we actually need as a community,” Kazmierski said.
He said the upside to the housing crisis is that the community is having to look at building differently and look at solutions like more density and more multi-family dwellings.
“We’re starting to look at what it’s going to take for us to change from a town to a city and to start to grow up and grow in,” he said.
Land admits that it is hard to throw a switch and have housing ready to go for a rapidly soaring population.
“One of the reasons we’re getting so many Californians is they are years ahead of us in terms of this housing crisis, in terms of the supply not matching demand,” Lang said.
But he noted that Southern Nevada is much better at handling growth and most master-planned communities have a growth plan that is 40 to 50 years out.
While native Nevadans might not love the extra traffic and others might bemoan the "Californication" of Nevada's political scene, both Lang and Kazmierski see the influx from the Golden State as a positive.
“There is nothing but benefits from the Californians. We just have to make a little more room for them,” Lang said.
Robert Lang, executive director, The Lincy Institute and Brookings Mountain West; Mike Kazmierski, president and CEO, Economic Development Authority of Western Nevada in Reno