How have costs of living in the IE changed?

One metric on which the IE is doing worse than Los Angeles is changes in cost of living

One of the arguments I've been making recently is that regions are becoming more and more competitive for people. This is especially true in California, which has suffered from hundreds of thousands of low- and middle-income workers leaving for nearby states like Nevada and Arizona, as well as not-so-nearby ones like Texas and Florida. People are on the move, and they have options.

The Inland Empire is not immune to these trends. We cannot continue to pretend that our relatively low cost of living will insulate us from the California Exodus. If we don’t boost economic opportunity, people will locate elsewhere.

In fact, isn't even really true anymore that we have low cost of living. I mean yes, houses are cheaper than in L.A., but housing costs are accelerating out here faster than in L.A. Accelerating cost of living might even be worse than higher costs of living, as residents actively see their situation worsen.

See the chart above, which compares regional price parities for housing in Los Angeles and the Inland Empire (source: Bureau of Economic Analysis). Numbers above 100 indicate higher cost of living relative to the rest of the U.S. That is always true in both the IE and LA, and LA has higher numbers than the IE in general (2023: 172 in LA vs. 132 in IE). But what I worry about in this chart is the fact that the cost of living relative to the rest of the US is declining in LA in the last few years, but rising in the IE.

People have a stronger reference point to what they paid last year or two years ago, than they do to what’s happening in the rest of the U.S. These dynamics can be a trigger for increasing outflows, as we have already seen in San Bernardino County.

This is happening for all sorts of reasons, including higher demand for housing - a kind of chicken-egg issue. But the problem remains: if we don't think creatively about increasing opportunity in the Inland Empire, we'll quickly join the rest of the state in the California Exodus.