I love this state. I have built my career here, I am raising my family here, and I believe without reservation that California is the best place in the world to live. Consider the weather, the economy, the talent, the ambition, and the sheer scale of an economy that ranks as the fourth largest in the world if it stood as its own nation. One in nine Americans lives here, and that concentration is not an accident.
So when I read another sensational headline about the California exodus, I want to set the record straight. The actual market data tells a completely different story than the popular media narrative.
Yes, California lost roughly 150,000 residents to other states in 2025. That is a real statistic, and I will not sugarcoat it. But the underlying reason why people choose to leave matters enormously. This past spring, the California Policy Lab at UC Berkeley published a rigorous study on exactly this question titled Priced Out.
The concrete findings from that report outline a clear picture:
Housing cost reductions: Californians who relocate land in destination neighborhoods where housing costs average 672 dollars less per month.
Asset ownership gains: Seven years after moving away, those former residents are 48 percent more likely to own a home than comparable Californians who chose to stay.
Renters advantage: Renters who leave the state successfully cut their monthly rent bills by approximately 30 percent.
These numbers do not represent people rejecting the culture or economic promise of California. These are people doing basic math. As the executive director of the Policy Lab noted, the California Dream remains active and strong, but the price tag has simply risen far beyond what many families can realistically afford to pay.
The Public Policy Institute of California confirms this truth from the opposite direction. When residents who are actively considering leaving are asked to explain why, the primary answer is housing. It is not state taxes, local politics, or lifestyle preferences. It is housing, plain and simple.
The standard exodus narrative always omits a critical piece of the puzzle. High costs do not just push current residents out, they actively prevent new people from moving in. The Berkeley research explicitly found that our extreme affordability gap deters potential residents from relocating here at all. Domestic demand for California has never been the problem. Real estate supply is the bottleneck.
California has suffered from a systemic housing shortage since 1970. We currently rank 49th out of 50 states in housing units per capita. Even our least expensive local communities cost more than most of the rest of the country. When the median home price in San Jose scales to ten times the median household income, that is not a healthy market signal. It is a severe policy failure created over decades by restrictive local zoning decisions.
This long history of artificial scarcity is exactly why I am so bullish on the legislation signed on October 10, 2025, which officially took effect last week on July 1, 2026.
Senate Bill 79, known as the Abundant and Affordable Homes Near Transit Act, represents a genuinely serious answer to a structural crisis. The underlying concept is highly elegant. Where the state has already invested billions of dollars in high quality public transit, dense housing should be entirely legal.
Across eight urban transit counties, including Santa Clara, San Mateo, and San Francisco, SB 79 completely overrides local municipal zoning within a half mile of qualifying rail and rapid bus stops.
This tier applies to heavy rail networks like Caltrain and BART.
Within a quarter mile: A city cannot restrict your development below 75 feet of building height, 120 units per acre, and a 3.5 floor area ratio. State density bonus laws stack on top of those baselines, allowing heights to reach 95 feet closest to station gates.
Between a quarter mile and a half mile: The state mandates minimum development floors of 65 feet of height, 100 units per acre, and a 3.0 floor area ratio.
This tier applies to light rail networks like VTA, Muni Metro, and high frequency bus rapid transit.
Within a quarter mile: Local ordinances are overridden to allow a minimum of 65 feet of height, 100 units per acre, and a 3.0 floor area ratio.
Between a quarter mile and a half mile: The state baseline limits sit at 55 feet of height, 80 units per acre, and a 2.5 floor area ratio.
Properties sitting within 200 feet of a transit station entrance activate an additional bonus, adding another 20 feet of allowable height, 40 units per acre, and a full point of floor area ratio to the baseline.
Projects that comply with these standards carry real statutory teeth. If a local city in a high resource area denies a qualifying transit oriented project, the state presumes an immediate violation of the Housing Accountability Act.
This is what it looks like when a state stops simply admiring a crisis and actually legalizes a structural solution.
Let us be completely clear about what SB 79 can and cannot accomplish. It does not lower market rents by government decree, and not every newly upzoned parcel will instantly pencil out in a high interest rate construction environment. Cities retain the flexibility to tailor these rules through alternative local plans, and local implementation will naturally vary across jurisdictions.
But removing the primary barrier matters immensely. For half a century, the binding constraint on California housing was not a lack of concrete or capital. It was a lack of permission. SB 79 removes that barrier precisely where housing delivers the greatest economic and environmental impact. It aligns our housing needs with our climate goals, our transit infrastructure, and our core values.
Across the Peninsula and the South Bay, the practical effect is already visible. Owners of underutilized commercial parcels near Caltrain and VTA networks woke up on July 1 holding land where the highest and best use was completely reset by legislative act. Developers who previously spent years fighting agonizing entitlement battles now possess a clear ministerial path forward. This massive repricing of transit land is the market finally correcting a half century of artificial scarcity.
People want to live in California, and the data from UC Berkeley proves that has always been true. For the first time in my career, the state is acting like it actually wants to let them stay. That is why I am incredibly bullish on transit adjacent land across Santa Clara and San Mateo counties, and why I remain bullish on the future of California.
We did not lose the California Dream. We just made it too expensive to access. Now, we are finally building our way back to it.
Tsovo Massena advises property owners and investors on commercial real estate across Santa Clara, San Mateo, and San Francisco counties. His license number is CA DRE 02179615. If you own a parcel near a Caltrain or VTA station and want to understand how SB 79 has shifted your property value, reach out today for a complimentary highest and best use analysis.
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