California desert Towns Experience Income Shifts as Wealthy Residents Arrive
Several California desert communities have experienced important shifts in household income between 2017 and 2022, driven in part by an influx of wealthier residents. While some areas saw incomes rise dramatically, others experienced substantial declines.
data analyzed shows Lompoc experienced the largest percentage drop in income, falling from $49,919 in 2017 to $20,532 in 2022 – a 58% decrease. california City followed with a 50% decrease, moving from $44,490 to $22,264. San Marino saw a 42% decrease, with income dropping from $309,317 to $178,433. Indio experienced a 22% decrease, from $48,135 to $37,676, and kingsburg saw an 18% decrease, from $100,640 to $82,838.
Conversely,other communities saw substantial income gains.The article highlights the dramatic increase in Indian Wells,where average household income skyrocketed from $139,000 in 2017 to $256,000 in 2022.
Economist Jerry Nickelsburg of the UCLA Anderson School of Management explained that income fluctuations can occur when existing residents earn more or when high earners relocate to a community. He noted that nationwide, higher earners have experienced greater income growth than lower earners – “the rich have gotten richer.” He also pointed out that California’s treatment of capital gains as regular income can cause annual averages in smaller communities to vary based on investment outcomes. The analysis focused on communities with more than 3,000 tax returns to mitigate this effect.
Nickelsburg also observed that migration patterns often involve lower-income residents moving from coastal areas to inland regions, suggesting that income booms in suburban inland locales may reflect growth in sectors like retail and hospitality.
In the Coachella Valley, real estate professional Garman noted, ”the money’s coming from all over,” especially from cash buyers during the competitive housing market of 2022 and 2023. These new residents are now high earners who have relocated to previously less affluent towns, a trend Garman believes ”is the new norm.” New attractions like the Firebirds professional ice hockey team and Disney’s Cotino housing development are drawing families to the area.
While the influx of wealth isn’t currently a concern for Garman’s clients, he anticipates that “more affordable areas will become less affordable later,” acknowledging the inherent challenges of maintaining affordability. He questioned, “How do we make it fair for everybody? How do we make enough homes affordable for everybody?”
Thousand Palms, an unincorporated community, is attracting homeowners due to “taxes [being] more reasonable” and “fewer regulations when you want to build,” according to resident Bond. She believes the town’s boom is largely due to the broader growth in the Coachella Valley, rather than improvements in local infrastructure or amenities. “Nothing has changed in Thousand Palms. Nobody has dealt with the homelessness… we don’t have an extra amount of police presence,” she stated.
There is ongoing discussion about a potential annexation of Thousand Palms by a neighboring city like Cathedral City or Palm Desert, with Bond stating, “It’s only a matter of time before somebody buys us up. They want these owners, they want their tax revenue.” Despite the heat – “God needs to turn a fan on,or something,” Bond quipped - signs indicate continued growth,with million-dollar homes being built even without pools. “Thousand Palms is not what it used to be.”