Moving to Texas: Why Tesla’s Elon Musk, Oracle and HPE are leaving California
With the recent news of SpaceX and Tesla CEO Elon Musk moving to Texas, Hewlett Packard Enterprise relocating its headquarters from the San Francisco Bay Area to the Houston area, and today’s announcement that Austin would now be home to Oracle, the classic California exodus to the Lone Star State has been brought to the forefront again.
RELATED: Tesla CEO Elon Musk critical of California, leaves the state and moves to Texas
JUST HOW MANY PEOPLE ARE MOVING?
Texas is the most popular relocation destination for Californians, according to the U.S. Census Bureau. And it has been for years.
In 2018, Texas had 86,164 new residents from California. That’s an increase of 36.4% compared to 2017, according to the 2020 Texas Relocation Report, which analyzes the latest migration data from the U.S. Census Bureau and U-Haul.
Texas ranked third in the U.S. for the number of residents moving out of state in 2018. Ironically, the most popular relocation destination for Texans was California with 37,810 people leaving.
BUT WHY THE LONE STAR?
It’s hard to find another state that has residents with deeper pride than Texas. Texans wear the state flag on their clothes, cars, and porches like a badge of honor. Hell, a state representative is still trying to secede from the Union in 2020.
We love to defend our wide-open spaces, our Whataburger, and our freedoms. So for Texans, it’s hard not to see what’s to love, but to outsiders, there’s no denying money talks.
The loudest fact: Texas has no state income tax. And when you compare it to California’s personal income tax, which maxes out at 13.3% for anything above $1 million a year — the highest in the country — it’s a no-brainer for residents.
Plus, capital gains in the Golden State are taxed at a similar rate. While, Texas offers lower taxes, more relaxed environmental regulations, and lower cost of living. Something many companies based in California noticed.
Oracle and Hewlett Packard Enterprise aren’t the first to make the move east.
In recent years we’ve seen McKesson, Core-Mark Holding Co., Charles Schwabb, and Toyota move their headquarters to Texas. They all brought thousands of employees with them.
One of Toyota’s main drivers to move from Torrance, California to Plano, Texas was housing costs, according to the Dallas Business Journal.
After doing focus groups with their employees, the company found they were willing to move to “live the American Dream.”
Toyota calculated housing costs in Los Angeles County, where Torrance is located, are three times per square foot the cost of a house in Dallas-Fort Worth.
Expanding statewide, in 2019, housing costs in California were roughly 60% higher than in Texas, according to MIT’s living wage calculator. And Texans also spent about 5% less on everything else.
With these favorable numbers, it’s no surprise that a Facebook group dedicated to people thinking of moving from California to Texas has more than doubled in members in the last couple of years.
Among the tens of thousands moving here aren’t just executives and employees, but also celebrities like James Van Der Beek.
The actor announced his family was moving to Texas this fall. But his public reasons didn’t include taxes or cost of living, but rather the lifestyle the Lone Star State provides.
In an Instagram post, the Dawson’s Creek star outlined all the things he, his wife and their five kids were not allowed to do at the Beverly Hills park near their home. Along with flying a kite, Van Der Beek listed “riding a bicycle, climbing a tree, throwing a ball against a cinder-block wall, learning anything from an instructor, using weights, cones or any type of pad, wearing cleats (even rubber ones), and you couldn’t use the batting cage built next to the baseball field.”
The Varsity Blues actor has made several IG posts from their ranch outside of Austin gushing about the land and views.
Van Der Beek’s move comes just two months after podcaster and comedian Joe Rogan also relocated to the Austin area.
Rogan said on his podcast that he was looking to have a “little bit more freedom.”
He added that COVID-19 pandemic showed him and others how overcrowded Los Angeles, where he was living at the time, had become.
“I think that where we live right here in Los Angeles is overcrowded and I think most of the time that’s not a problem,” he said on the Joe Rogan Experience podcast. “But I think it’s exposing the fact that it’s a real issue when you look at the number of people that are catching COVID because of this overpopulation issue.”
It’s true that Texas is the second-most populous state behind California, with the Lone Star State having 10 million fewer people in 2019, according to the Census Bureau.
But the COVID-19 pandemic has hit the state just as hard, if not harder, than its West Coast counterpart.
Last month, Texas became the first state to surpass one million COVID-19 cases. Three days later, California hit the same grim milestone.
Based on numbers aggregated by the New York times, in California there has been an average of 28,142 cases per day over the past week, an increase of 111% from the average two weeks earlier, compared to Texas which has seen an average of 13,100 cases per day, an increase of 9% from the average two weeks earlier.
But the number of cases in each state probably didn’t factor into Musk’s decision to move things to the Lone Star State.
Earlier this year, Musk threatened to move Tesla’s headquarters and future programs to Texas and Nevada over a dispute with local officials who stopped the company from reopening its electric vehicle factory due to coronavirus restrictions.
A lockdown order in the six-county Bay Area forced Tesla to close the Fremont, California plant starting March 23 to help prevent the virus’ spread, and it was extended until the end of May.
Then in July, the electric car company announced its new Cybertruck Gigafactory will be built in Austin, joining SpaceX which operates in the southern part of the state.
During an interview with the Wall Street Journal earlier this week, Musk confirmed he had also moved to Texas, and according to Bloomberg, he relocated his private foundation too.
“Tesla is last car factory still manufacturing cars in California. SpaceX is the last aerospace company still doing significant manufacturing in California,” Musk said during the interview. “My companies are the last two left.”
The question remains: will he keep them there?
DON’T CALIFORNIA MY TEXAS
But how do Texans feel about all these Californians coming to the state?
Many agree with what Gov. Abbott says, “don’t California my Texas.” The phrase is political, driven by the idea that the California migration will somehow turn the conservative state liberal.
But, Californians have been relocating to Texas in large numbers for the past decade. And despite claims that the 2020 election was going to see the Lone Star flip join a blue wave, that did not happen.
With its business-friendly regulations and incentives, affordable housing, lack of personal income tax, and wide-open spaces, Texas is still very much red and Californians will still keep on coming.
The Associated Press contributed to this report.