Our Firm
Resi Wrap - All My X's Live In Texas
July 2023

Friends of ResiShares:

Much ink has been spilled on the billionaire exodus from high-tax, progressive California to low-tax states like Florida and Texas in recent years, mainly from the insecurely self-congratulatory pens of said billionaires and those states’ governors.

Then there are those, like the governor of Arkansas, trying to get in on the action, for which she was roundly and appropriately dragged on Twitter. The total net migration from CA to AR in the most recent ACS was a whopping 1,962 people over 4 years, half of whom moved to the decidely non-Arkansas-ish Walmart suburbs of Washington County.

While the Arkansas governor’s comments are risible, and Florida’s net take from California is less than meets the eye, Californians really ARE moving to Texas.

Governor Abbot’s political posturing aside, the reason that all of Governor Newsom’s exes live in Texas (other than his infamous literal ex who lives in Florida) can largely be attributed to its significantly lower cost of living. Amongst the contributors to cost of living about which Texas likes to brag, none loom so large as their claim of lower taxes.

Texans are famously averse to taxes. Just ask this guy:

To this end, Texas (like Nevada, Florida, Washington, New Hampshire and others) has no state income tax, which would certainly make it attractive to high-earning California exes like Elon Musk.

Despite this, all states, including self-proclaimed bastions of individual liberty, need to get their money from somewhere, and in the case of Texas, what they leave on the table in terms of income tax is made up in other levies, notably property taxes. In fact, there are credible claims that the middle class tax burden in Texas is indeed HIGHER than it is in California.

The thing is, when property prices go up 40% in three years, those property taxes begin to take an increasingly large toll on homeowners. In defense of Texas, they appear to be doing something about it, with a law poised to pass that would cap school taxes and expand homeowner exemptions, among other measures.

This should stop the states meteoric growth in tax burden. As for Elon, property taxes notwithstanding, I’m told he’ll only stay if Texas drops the T, E, A, and S from the state’s name.

The Rest Of Resi

  • While Texas is working on fixing its property tax challenges, Florida’s insurance nightmare is just getting worse (an explanation for why this story was picked up by Yahoo Sports requires someone who knows more about media than I do).

  • Every reader knows I’m a sucker for adaptive reuse and office-to-resi conversions, but we really need to draw the line somewhere.

  • The midwest has the fastest-growing home prices. We have a nationwide housing shortage while businesses and workers are enjoying a new paradigm of geographic nimbleness. Cheap + fun wins.

  • Apartment List claims that rent is actually slightly negative YoY across the country. Can somebody please let Jay Powell know?

  • Here’s a real estate fact I didn’t know until today: Marriage duration and divorce rates vary WILDLY by geography. New Hampshire marriages last >2x as long as DC marriages, for instance (DC campaign staffers: “ya don’t say!”). Also interesting: all the states with the longest marriages and lowest divorce rates are cold and sparsely populated. Like, “yea, my spouse annoys me, but the house will be too cold if it had one less source of body heat running around inside of it.”

  • Scroll to the bottom to see a brief history of the wrench.

T-RECS Of The Month: New Orleans-Metairie, LA

New Orleans is a challenging housing market for many reasons, but it is cheaply priced and culturally punches well above its population weight.