(The Center Square) – California utility prices have increased 51% more than then national average, while California rents have increased 21.6% less than national average, according to a new inflation report from the state Legislative Analyst’s Office on price changes since January 2020.
Overall inflation in California remains 7.3% lower than the United States average since January 2020, largely due to lower housing inflation. Rent costs nationwide grew 25.9%, compared to 20.3% for California.
One major factor in California’s lower rent increases is the state population, as California continues to have the highest level of net out-migration of jobs in the country.
According to an analysis of U.S. Census data from the Orange County Register, California lost a net 268,052 residents in 2023, which is 73,814 fewer than in 2022. Assuming a similar rate of improvement in population loss, California could be on track to lose a net of 210,000 residents this year.
Additionally, IRS data reveals individuals moving to California are poorer than those moving out, further limiting how much landlords can raise rents.
Increases in cost of California utilities have significantly outpaced the national average due to the state’s rising costs for energy and water, which some leaders say is a factor in pushing more people out of the state.
“[California Gov. Gavin] Newsom and his allies continue to ignore the ballooning cost of gas, energy, water, and just about every other basic necessity you can think of,” said State Assembly Minority Leader James Gallagher, R-Yuba City, to The Center Square. “Tens of thousands of Californians have left the state because of these high costs, but the Newsom administration keeps doubling down on failure with more mandates and higher taxes.”
California utility prices have increased 51% more than then national average, leading the state’s residential energy prices nearly to rise to nearly double the national average. California rates are quickly approaching the break-even point at which it it becomes cheaper to power a car with gasoline than with electricity from the grid.
The state’s — and nation’s — largest water district, which supplies more than half of the state’s population with water, is raising water rates by 40%, citing a need to increase revenue amid high levels of consumer water conservation.
Last year, global credit ratings agency S&P global warned property insurance rates are getting so high that they’re pushing homeowners out of the state, which it said could result in a public credit downgrade in the long run.
