For years, Californians have been fleeing the state’s outrageously high taxes and draconian regulations. Many have settled in Texas, where both taxes and business regulations are generally less onerous. Interestingly, the Texas state capital, Austin, will soon become an unofficial part of California. A report by Zillow finds that, by the end of this year, Austin will become the least affordable city outside of California.
The reason isn’t hard to identify. For years, Austin has been enacting California-style land-use and environmental regulations. Restrictions on development are the cause. A high cost of living is the effect.
An architect in Austin explained the financial impact of these regulations:
Every regulation the city does just adds another layer of cost to what would be an affordable house otherwise…. What used to cost maybe $75 for us to do a site plan in Austin now costs over $2,000 because of the amount of time it takes to do all those regulations…
Another example is a report that found that regulations and the associated fees for a particular project would cost more than $1 million, compared to costs of only $120,000 in Dallas. One doesn’t need to be a professional economist to understand the impact that these fees have on the cost of living. The exorbitant expenses imposed by regulations and the associated fees is a primary reason why the cost of living is so outrageously high in California. And those expenses are why Austin is becoming more like California.
Ironically, Austin is attracting many transplants from other cities with a high cost of living, such as San Francisco and New York. These refugees are trying to escape the limitations imposed on personal and economic liberty in those cities, but they aren’t abandoning the ideas that give rise to those limitations. And so, they support politicians pursuing an agenda that would be right at home in Sacramento and Albany.
Apparently, these new arrivals believe that the tax and control ideas that dominate California will somehow have different results in Texas. They fail to see the connection between the ideas that they support and the results that they experience. It may be cliché, but doing the same thing over and over and expecting a different result is the epitome of insanity. Unfortunately, when they discover the folly of their beliefs it will be too late. They will have turned Austin into the very thing they sought to escape.