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A new economic report from the Comptroller鈥檚 Office says Maryland has seen a significant loss of residents to other states for more than a decade 鈥� no surprise to developers and housing advocates, but still a fact that has looming implications for the state.
The comptroller鈥檚 78-page analysis report on 鈥淗ousing & the Economy,鈥� released last week, says that from 2010 to 2023, Maryland saw 2.3 million residents move to other states, outpacing the 2 million moving into Maryland in that time.
Those losses were offset by natural population growth, with births exceeding deaths, and high numbers of immigrants moving in to Maryland from foreign countries, allowing for slight growth in the overall population in that time.
The report found that of those leaving for other states, most were either heading to neighboring states, such as Pennsylvania or Virginia, or they were traveling hundreds of miles to make new homes in Florida, Texas and the Carolinas.
鈥淚n recent years, we鈥檝e been losing a net average of about 40,000 people per year to states with lower housing costs and more housing,鈥� Comptroller Brooke Lierman said in the foreword of the housing report. 鈥淭his outmigration is a downward drag on our labor market, economic output, and state and local revenues鈥�
The fear that residents are leaving the state has long been a concern for lawmakers, housing developers and renter advocates. Besides confirming the outflow, the report is a comprehensive look at the various factors contributing to a high cost of living in Maryland that sends people out of the state for cheaper options.
Not everyone was surprised with the report鈥檚 findings.
鈥淭his kind of confirmed what we expected 鈥� that there was this significant outmigration,鈥� said Aaron Greenfield, director of government affairs with the Maryland Multi-Housing Association.
鈥淚 won鈥檛 say I鈥檓 clairvoyant, or that others are clairvoyant, but I do think we kind of sensed this was the case,鈥� Greenfield said. 鈥淲e have a calamity on our hands.鈥�
The comptroller鈥檚 housing report is part of a series analyzing specific factors affecting the state鈥檚 economy, with previous reports focused on the impact of immigration or child care.
The report notes that the state鈥檚 housing climate was not created overnight and there is a 鈥渃omplex web of factors that drive up the cost and complexity of building new housing in Maryland, resulting in a chronic undersupply of homes.鈥�
Some of those are nationwide issues, such as increasing construction costs due to inflation, material and labor shortages, and tariffs. The report says that the United States is 鈥渕ired in a monumental housing crisis鈥� with home prices across the country jumping up by 60% since 2019.
鈥淎mericans have been responding to the housing crisis with their feet by moving to states where housing is more affordable and plentiful,鈥� the report says. 鈥淎s a result, higher cost states with limited housing supply are losing residents, economic opportunities, and revenue bases.鈥�
But the report also finds that states with fewer regulations on the housing market have an easier time building new units, bringing the overall costs down. Maryland, on the other hand, is the sixth-most regulated housing market for residential development.
鈥淗ousing is unaffordable, and there are policies at the local and state level that impact that affordability,鈥� Greenfield said.
With Marylanders facing some of the highest housing costs in the nation, some choose to leave the state 鈥� and take potential state tax revenue with them.
In 2022, the adjusted gross income leaving the state outpaced the adjusted gross income coming into the state by $2.7 billion. In other words, while 138,000 people moving into Maryland brought in some $7.5 billion in new revenue, the 164,000 residents who left in 2022 took $10.2 billion in revenue out of the state with them.
From 2010 to 2023, nearly one third of those leaving Maryland went to Florida, according to the report, with the Sunshine State acquiring 31% of Maryland鈥檚 net domestic outmigration during that time.
The state receiving the second-highest share of Maryland outmigration is Pennsylvania, at 26%. North Carolina got 20% of the net outmigration in that time while Texas got 18%.
In a panel discussing the report Friday, Lierman said that before the COVID-19 pandemic, most people leaving the state were older individuals. But in recent years, more young people are leaving.
鈥淲e were losing, on a net basis, older and higher-income people. Maybe they were retirees motivated by better weather or lower income taxes,鈥� she said. 鈥淏ut since the pandemic, we鈥檝e seen a troubling new trend 鈥� we鈥檙e seeing an increase of younger people and lower-income households leaving the state.
鈥淭hese folks seem to be not motivated by warmer weather 鈥� or worse government 鈥� in Florida,鈥� Lierman joked, 鈥渂ut looking for a lower cost of living.鈥�
Housing policy debates
How to reduce the cost of housing while supporting those currently struggling to live in the state will likely be a major talking point in the upcoming legislative session.
The report鈥檚 conclusion that housing costs are lower in states that have a less-regulated housing market conveniently aligns with recent efforts from the Moore administration to expedite and encourage new housing development in the state.
Maryland is facing a nearly 100,000-unit housing shortage and needs to build 590,000 new housing units to meet demand and growth projections by 2045.
The report notes that in order to keep up with the state鈥檚 projected housing demand, Maryland would need to approve 30,000 development permits a year. Since 2014, Maryland has 鈥渙nly permitted an average of 18,000 units annually.鈥�
Gov. Wes Moore (D) made fast-tracking housing development a policy focus in recent years, pushing legislation and executive orders to help cut into the state鈥檚 housing shortage 鈥� some that were successes and some, not so much.
In September, he signed an executive order that aimed to reduce administrative hurdles to new housing projects across the state and hasten the development of new units.
Moore and Housing Secretary Jake Day are also shopping around legislation to streamline the permit approval process and lock in vesting rights for developers.
Matt Losak, executive director of the Montgomery County Renters Alliance, says that efforts to build more housing must be paired with policies that help Marylanders struggling to afford housing now.
鈥淲e don鈥檛 want 鈥榖uild your way out of the housing crisis鈥� to become a mantra that is ultimately just a mirage,鈥� Losak said. 鈥淲e want it to be paired with an appropriate measure of renter protections that ensure that people can have affordable, predictable rents, quality housing and stable housing.鈥�
Losak and other renter advocates support policies such as 鈥済ood cause evictions鈥� and rent stabilization to help keep people comfortably housed in the state, rather than having to move to a more affordable state or face homelessness.
On the other hand, Greenfield says developers avoid states with policies they see as deterrents, instead favoring those less-regulated states that Marylanders have been flocking to.
鈥淭he investment happens elsewhere. The risk of investment can鈥檛 withstand these policies in Maryland,鈥� Greenfield said. 鈥淟ook at North Carolina, Georgia, South Carolina 鈥� Florida and there鈥檚 growth in Texas 鈥� because they don鈥檛 have these level of policies that are bottling up investment.鈥�
