Silicon Valley has housing crisis. And cost-of-living problem. And “someone please create an Uber for X” problem.

To address the problem, lawmakers and local governments in Silicon Valley are doing everything, except build new housing.

Why? It’s the usual politics and bad zoning policies.

Local government: developers need to build more housing and not be greedy all the time.

Developers: local government needs to ease restrictions on everything from zoning to rent-control.

Due to this unwarranted stalemate, we have the following:

Winners: anyone who works in tech.

Losers: anyone not working in tech.

So what happens when local government and developers can’t seem to see to eye-to-eye and the housing keeps getting expensive every minute?

People start leaving for greener pastures.

According to Silicon Valley Competitiveness and Innovation Project (SVCIP):

  • Silicon Valley lost 7,500 residents; more than it gained for the first time since 2011.
  • Median housing costs increased 13% to $870,000 between August 2014 and August 2015.
  • In San Francisco, the average monthly rent for a two bedroom unit in 2015 was $4,200.
  • The average Silicon Valley commuter spent 67 hours in traffic congestion in 2014, an increase of 13.6% from 2010.
  • Cities that gained most from Silicon Valley exodus were Seattle (17,000 workers) and Austin (720 workers).

That’s more of a micro look at exodus of middle-class. Nevertheless, it’s the same story if we look at the macro California.

Hoover Institution research fellow Carson Bruno wrote about how this exodus is affecting the middle-class, the backbone of California’s economy.

“Between 2004 and 2015, roughly 930,000 more people left California than moved to the Golden State—just three years saw net domestic in-migration. The biggest beneficiaries of California’s net loss are Arizona, Texas, Nevada, Oregon, and Washington.”

Why are they leaving California?

Cost-of-living.

“California’s median home value per square foot is, on average, 2.1 times higher than Arizona, Texas, Nevada, Oregon, and Washington’s – California’s very expensive energy costs – the state’s residential electric price is about 1.5 times higher than the competing states – or the Golden State’s oppressive tax burden – California ranks 6th, nationally, in state-local tax burdens – those living in California are hit with a variety of higher bills, which cuts into their bottom line.”

High cost of living in California is due to housing, energy and taxes. These are necessities, except one of them being necessary evil – you take a guess.