Why Bay Area companies are exiting CA in droves

As prominent business orgs continue fleeing California for the Promised Lands of Texas/Florida, local voters continue signing off on policies that further constrict local businesses. Evan Symon of the California Globe breaks down the Hoover Institution’s latest study on HQ relocations, which disproportionately hurt the Bay Area’s economy.

According to a new Stanford University Hoover Institution report released on Thursday, the rate at which companies have been leaving California has risen dramatically since 2018, with  the 153 company headquarters relocations in 2021, more than doubling the 75 that left in 2020.

Since the late 2010’s, California’s high tax rates and cost of living, in addition to others factors, have slowly increased the number of companies leaving California. While some were located in Southern and Central California, the vast majority of companies that moved their headquarters were located in the Bay Area….

Many younger companies, which are more likely to grow and establish roots, have in particular been leaving because of the business climate and high business costs, as well as other factors mentioned by Hoover such as “reducing productivity, and reducing profitability, including tax policies, regulatory policies, labor costs, litigation costs, energy and utility costs, and concerns about a declining quality of life within the state.”

The report notes that many younger people have been leaving the Bay Area in particular because they cannot afford homes in the area, and that as a result, they are also locked out of the better school systems for their children. As a result, Silicon Valley, which in the 2010’s was one of the most attractive places in the country to live in following the Great Recession, quickly fell from grace.

“The area pretty much priced out their future,” explained Quentin Barry, a researcher who has helped identify why many have been leaving the state…

This article originally appeared in the California Globe. Read the whole thing here.

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