By Patrick Blennerhassett, Las Vegas Review-Journal, October 9, 2023
Overlooking the city skyline from a multimillion dollar mansion in Summerlin’s affluent Summit Club, a group of tech millionaires and billionaires — mostly from California — were being pitched the idea of moving to Las Vegas.
The one-day summit, sponsored by the city of Las Vegas, Clark County and Howard Hughes Corp., brought out the heavy hitters and attendees included billionaire Andrew Cherng, the co-founder of Panda Express, social activist and former NFL quarterback Colin Kaepernick and Las Vegas Raiders President Sandra Douglass Morgan.
Cherng, who moved to Las Vegas from Southern California in 2014, said selling California’s tech entrepreneurs and founders on Las Vegas isn’t a hard sell when looking at it from a financial standpoint.
“I didn’t like the idea of people voting to pay higher taxes in California,” he said as to what precipitated his move east. “That is such a really important idea to me, and I didn’t like that. And that’s why I decided to make the move.”
Las Vegas is the top destination for relocating homebuyers from both Los Angeles and San Francisco, according to online real estate brokerage Redfin, and approximately 5,000 Los Angeles residents moved to Las Vegas in August alone. Las Vegas is currently adding approximately 115 people a day to its population base.
California’s much publicized exodus started during the Covid-19 pandemic and has partly been fueled by the rise in remote work. The state has now posted three consecutive years of population decline and long term estimates now forecast America’s most populous state’s head count will remain stagnant through 2060. A number of factors are contributing to the exodus, including high tax rates (California has the highest level of personal income tax in the country and Nevada doesn’t collect personal income tax). There also are reports of rising violent and property crimes.
Many California transplants to Las Vegas, including Cherng, point to the political slant of the state as their main grievance, in which politicians have been voted in under the idea of higher tax rates offering more government programs and social services, however California has both the highest rate of poverty and the state’s opioid death rate has steadily increased since Covid.
This is part of the worry many Las Vegas natives have expressed: that Californians will import the very ideals they are escaping in the first place. However summit organizer Teddy Liaw, the founder of NexRep, who moved from the Bay Area to Las Vegas close to three years ago, said transplants to the Nevada city are acutely aware that transplanting California ideals and ideology is not what they want.
“I think the people that are leaving California are leaving for specific reasons,” he said. “None of us are here to recreate what we left, we left it for a reason.”
Nan Wang, the co-founder and chief executive officer for Sleeper, an online sports fantasy app and website, moved from San Diego to Las Vegas two and a half years ago, and said he hasn’t regretted his decision at all and said making the switch to becoming a Nevadan has been seamless.
“I love it, the airport is super convenient to go anywhere in the U.S., Chinatown is amazing, and there is a community of entrepreneurs, movers and shakers. So I felt like I dropped in and didn’t miss a beat in terms of having friends and folks out here that are building and aspiring to bring economic prosperity to Las Vegas.”
David Chao, the co-founder and general partner at DCM, a multibillion dollar venture capital firm, who moved from the Bay Area to Las Vegas in 2021, said he’s found his political network has expanded drastically, and said he now counts a number of Republicans as his friends and golfing buddies.
“I don’t think one’s political views will change, I will probably continue to be a liberal,” he said. “But if you don’t understand the other side, you’re forever going to have that chasm. And if you look at today’s America, if you don’t understand the other side, you’re just going to get more apart, and I don’t think that’s good for the country.”
Government rolls out the red carpet
California’s loss is Nevada’s gain if you’re asking local officials. A number of high profile representatives were a part of last week’s Tech Summit — the second iteration, which had more than 100 attendees — including Nevada State Treasurer Zachary Conine, Clark County Commissioner Justin Jones and Ryan Smith, the director of Economic and Urban Development for the city of Las Vegas. Smith said the message from Las Vegas’ municipal government is that officials should be focusing on helping industries create jobs and economic growth, and not focusing on mandating and controlling the populace.
“I think there is an inflection point that happens in certain cities and areas over time, where the perception is the government needs the people, and that we represent the people, and we need business and enterprise development, versus they need the government,” he said. “So I think when the tide starts to turn, where the private sector and industries feel like they’re at war with the people, it becomes much more of a conflict.”
However with an influx of high-income earners invariably comes an increase in the cost of living for locals, and government officials said they are well aware a rise in affluence comes at a price. Jones mentioned the Welcome Home Program and Clark County’s Community Housing Fund, which were created in 2022 to address an “urgent” need for low-income housing across the valley. Estimates are that the county is already short 85,000 affordable housing units and real estate was another reason many attendees at the tech summit noted was key in their decisions to move to Las Vegas.
According to Redfin, the median sale price for a single-family home in California is $794,300, as opposed to $440,100 in Nevada.
“We have the advantage as people are moving here, we can look at what California is doing right and what California is doing wrong,” said Jones. “And be selective about what to incorporate here. And the business climate we have here is something we want to maintain because if we end us with the same business climate as California, then we will have shot ourselves in the foot.”
Many California transplants are landing in the upper class master-planned community of Summerlin — including Hollywood actor Mark Wahlberg, who moved last year from Los Angeles. The Howard Hughes-developed community was ranked this year as one of the best-selling master-planned communities in the country, and Alex Hancock, senior vice president for national sales and leasing, said the idea is to build out Summerlin’s 22,000 acres in a “sustainable growth” pattern to avoid falling victim to thing such as urban sprawl and patchwork communities of disparate homes clumped together with no real planning.
“That collaborative partnership of working together with both the local and state government is extremely important,” he said. “And ensuring that the growth is done in a way that maintains quality of life, and maintains a business friendly environment … and so from our perspective from a developer, it’s working in collaboration to ensure that we don’t fall victim to what might have happened in other states.”
Conine said “intentional growth” is the key mantra they are using to make sure Nevada is shaped in a sustainable way during this population boom. He said they are paying attention to what California’s transplants are telling them as to why they’ve left their homes for a new beginning.
“You have to identify why these folks are coming here in the first place,” he said. “They’re coming here because they think it’s a better place to grow their business and a better place to create a life for themselves … and a lot of Californians are moving to Nevada so they can get a better bang for their buck in terms of housing, but that creates an increase in cost for the housing market for Nevadans, both new and existing. And so the state is spending a ton of time and whole bunch of money to ensure that we can continue to build affordable housing, market rate housing and workforce housing. And so you can’t just attract the businesses, you have to make sure you are supporting the communities that are already here.”
Jason Lin, managing partner for Super Capital Group, a technology venture capital firm that led the initial investment in Twitch, moved from San Francisco to Las Vegas three years ago after 13 years in the Bay Area. He said another important function of the government is law and order, and part of the reason he left California.
“I think the support from the government on that front has been amazing here,” said Lin, who is one of the co-chairs of the tech summit. “First and foremost is safety and security. If you go to San Francisco, crime is tough right now, and so from what I have seen here, there is a big emphasis on making safety and security paramount, and that was actually quite a big push for me coming here.”