Relaxing zoning in California would not shrink Texas by 40%

I seem to lack Twitter-fu, because my questions to people on that platform go unanswered. And so, I pose the question here. 

Matt Kahn now claims that freeing up California housing markets would have caused Texas population to fall by 40%. His evidence? Uh ... well, I do not see any, save that there is a lot of migration into Texas from the West Coast. 

I went to the same IRS data source he used. In 2014-15, net migration into Texas from the rest of the U.S. came to about 59,000. Net migration from both inside and outside the U.S. was around 64,000. Of that total net inflow, about 19% came from California. Californians who moved to Texas earned about $71,000 per family; Texans who moved to California earned about $61,000. Both, interestingly, earned less than the $77,000 average income of Texan families who stayed put. 

How can you use that data to estimate a counterfactual population for Texas? I have no idea! Kahn did not say.

But he ended with a challenge. “My critics must answer the counter-factual of; what would be the population of Texas if it were easy to build in progressive coastal states?”

Challenge accepted!

So let’s stress-test the hypothesis that alt-Texas would have a population of 15.4 million in 2010, rather than 25.3 million.

In 1970 the state had a population of 11.2 million. If its population growth plunged to the national average and stayed there from that point on, Texas in 2010 would have 17.0 million. That is more than 15.4 million, but in the ballpark

How likely is it that an open California housing market would have pulled all those people out of Texas? Well, if Californian development restrictions were biting, then one would expect housing costs in California to rise dramatically relative to Texas during this period. The census measure of median rent is flawed, but it is easy to find. Assuming it measures housing costs reasonably well, what does movement in the California-Texas ratio tell us?

  

Well, that it is unlikely that the migrants to Texas were choosing to go there because California was too expensive. Certainly not during the 1970s or 1990s, at least. By 2000, Texas already had a population of 20.9 million.

In other words, unless something is wrong with the measure of housing costs, it is unlikely that the migrants pulled into a zoning-free California would have come from Texas, at least not before the year 2000. 

My answer to the question “What would be the [2010] population of Texas if it were easy to build in progressive coastal states?” is: at least 20.9 million (the 2000 population), plausibly 23.0 million (no net migration to Texas after 2000), and most likely exactly the same 25.1 million that it actually is. 

Comments

[Michael Roberts]

As I sit in my office in downtown Houston,a poster child of a city without zoning, surrounded by people in my office who also recently moved here from other places...quite a few from Los Angeles...but also from the UK, Iraq, Khazakhstan, Ireland, New Zealand, Brazil, Holland, Venezuela, Isreal..I am pretty convinced that none of them are here because housing is less expensive than in California (although many, especially those with swimming pools, are pleased that it is). It's a progressive city, all things considered, and perhaps it is my Texas pride that riles me up a bit with the idea that were it not for lower housing costs, people would naturally prefer California! My friends in Austin, however, might have a different take, as it has been somewhat overrun with Californians who have relocated, although by all accounts the Californians seem happy to be there. Not sure if the Austinites are as happy to see them there, however. I would argue in both cases, people are following their jobs. I don't really have the kind of academic argument that is generally fascinating in the comments section of Noel's blog, but I do like Texas.