Voters only get to choose whether they want to live under Republican or Democratic rule every four years. However, many are already voting with their feet.
More than a year after the Biden Administration announced an end to the pandemic, high tax blue states continue to hemorrhage people, money, and business to red states.
This has been going on for years. The people’s choice is clear: they overwhelmingly want to live in Republican run states.
The data is inconvertible. The five states that have gained the most people and income from new arrivals are Florida, Texas, North Carolina, South Carolina, and Tennessee.
On net, Florida gained 245,000 people and $36 billion in adjusted gross income, Texas gained 181,000 and $10 billion, North Carolina gained 83,000 people and $4.6 billion, South Carolina gained 70,000 and $4.8 billion, while Tennessee gained 61,000 and $4.7 billion (Washington Examiner 7/9/2024).
As a CRE investor, where should you own income producing property? All the aforementioned are no or low income tax states. As such, they are more friendly to household and business formation. These are all solidly Republican states with all but North Carolina led by Republican governors.
It only follows that if these states are gaining taxpayers, others must be losing them. Leading this charge are California, New York, Illinois, Massachusetts, and New Jersey. All solidly Democratic states.
California lost 307,000 people and $23.8 billion, New York lost 223,000 people and $14 billion, Illinois lost 87,000 and $10 billion, Massachusetts lost 45,000 and $4 billion, while New Jersey lost 37,000 and $5.3 billion (Washington Examiner 7/9/2024).
All of these loser states are run by the Democratic party, some uninterrupted for decades. The various interest groups associated with these governing elites have made life unaffordable for middle class families, hence the population shift.
Due to regulatory overreach and aggressive environmental lobbying they all have well above average gas and residential electricity prices, with California having the highest costs of all.
These same interest groups are responsible for the nation’s most restrictive zoning policies, making housing unaffordable for many.
In Portland, Oregon homebuyers need to earn a minimum of $161,624 to comfortably afford a mortgage (Zillow). The average individual income in Oregon is $37,774. The average median household income is $75,657 (United States Census).
An increasing number of people realize there is little future for them in these places due to higher taxes, higher energy costs and unaffordable housing. They are taking themselves, their industry, and money to red states which offer greater opportunity from both an economic and social standpoint.
As a CRE investor, you may be wise to follow suit. Many of these new arrivals will need housing, storage, education, medical and senior care. All these asset types and more can be accessed via the medium of DST properties.
You need not be an expert to do so. DSTs allow you to follow on institutional owner/operators with decades of experience with these different property types in these same locations. As a CRE investor, shouldn’t your money be where people are going rather than where they have left?
