The Empirical Manifesto

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It turns out that over the past three years, Texas has been America’s fastest-growing state, adding 913,642 people, nearly the population of Rhode Island. Almost half moved from elsewhere in the U.S. Of the 22 markets Redfin serves, the three in our Texas business are growing the fastest, at an average of more than 300% per year. And why not? A home in Houston costs less than a third what it would in, say, San Francisco, and it averages more than twice the size.

This migration to affordable housing is accelerating because, for the first time in a generation, home prices are increasing faster than wages or credit. When home prices first began outstripping incomes in 2000, easy credit made up the shortfall. But the difference in today’s real estate run-up is that lending is now regulated: home-buyers can’t just borrow more. So they’ll move to a place where they can pay less.

This is why, after 2013 home prices jumped 15% while wages increased less than 2%, 2014 will be the year of America’s Other Places: Denver, Charlotte, Dallas, Houston, Austin, Richmond, Charleston and Salt Lake City. Newly mobile Americans, freed for the first time in five years from underwater mortgages, won’t just move across the street. They’ll move across the country.

It will be, in the most literal sense, a political movement. The conservatives tired of the taxes in coastal cities are already leaving, in a process of segregation that can only increase America’s polarization.

The bigger change will be that the rest of the political spectrum likes the cost of living in Texas too, and once there will likely move to the right. After all, your politics don’t just change where you live; where you live changes your politics. To hear conservatives tell it, even people who want to be liberal can’t afford it.

States can’t afford it either. With a newly mobile population and businesses open to operating anywhere in the world, every statehouse in America is under competitive pressure to Texasize itself, limiting taxes to keep residents.

Today, Texas ranks 47th in general state spending per $1,000 of income; this parsimony takes a toll, as the state ranks 40th in student reading proficiency and 32nd in math.

But it has benefits too. Texas is now courting Boeing, the mainstay of the Seattle economy for nearly 100 years, after Washington state’s $8.7 billion in tax incentives weren’t enough to persuade Boeing to work with local unions on its new wildly popular 777X.

Other states, eager to lure in people and businesses across an increasingly mobile America, are following suit. Colorado, a state that legalized marijuana and same-sex marriage, just roundly rejected a $1-billion increase to income taxes that would have funded rural school districts, expanded pre-school, and extended the school day.

New York recently elected its first liberal mayor in a dozen years, but already his most ardent supporters are wary of his proposal to fund universal pre-school through a tax on the wealthy. The fear is that before New York can reap the benefit of pre-schoolers who become productive members of society, their parents, especially the wealthy parents, will have gone somewhere else.

This is why the move to Texas isn’t just a move, it’s a movement, of people, businesses and governments, for better and for worse.

Just as what happened to America in the 1960s, from beat poetry to psychedelic drugs, happened first in California; now it is happening in Texas, with its diversity, its small-government swagger, its megapolitan areas. Texas is, after all, a state of mind. And it’s becoming America’s state of mind.