Record numbers of Massachusetts residents are moving out of state, report says

In 2021, Marianne Iarossi and her husband Matthew Bergholm sold their house in Hudson, Massachusetts, bought a camper van, and hit the road.

"Because of COVID, we kind of did a lot of reflecting in our life and realized that we wanted to do some traveling before starting a family," Iarossi said. They spent eight months traveling around the country. On the way back, they realized they needed to figure out where they now wanted to live.

"And Massachusetts real estate was really expensive, especially post-2020," Iarossi said. "So we decided to move to New Hampshire."

Iarossi and Bergholm are among the nearly 111,000 Massachusetts residents who moved out of the state between April 1, 2020 and July 1, 2022, according to a new report from the Massachusetts Taxpayers Foundation. That's the highest level of out-migration the state has seen in 30 years, the report says.

Some of that population loss has been made up by new people moving to the commonwealth, including an estimated 61,000 people who relocated here from other countries, according to the report. But census estimates show Massachusetts still had an estimated population decrease of 0.7% over that period.

Iarossi, who's now expecting their first child, said they're renting a New Hampshire home and are looking to buy property there or in Vermont.

"We are big outdoors people and tree huggers, so we like to spend our weekends outside camping or just exploring natural areas," said Iarossi, who works in land preservation for the Trustees of Reservations. "And it saddens me to say that Massachusetts is so developed and privatized that you don't really have that good access to natural resources publicly."

The report blames the exodus on a number of factors, including housing costs and unreliable public transportation. Middlesex and Suffolk counties have seen the largest migration loss, the report says.

Iarossi and Bergholm are among the age group that's leaving Massachusetts the fastest, according to the report. 2021 tax returns showed nearly 38,000 Massachusetts residents between the age of 26 and 35 moved out of the state in 2020.

"You expect to see 26- to 35-year-olds move in and out a lot," said Massachusetts Taxpayers Foundation President Doug Howgate. "But the fact that it's the biggest loss sector ... that's a concern for that long-term workforce pipeline."

That kind of loss in the labor force impacts the state's ability to support its economy, he said.

"As we want to make sure we continue to improve our quality of life and provide economic opportunity to more and more Massachusetts residents, we need to have an economy that's able to be supported by its labor force," Howgate said.

The reasons people leave the state vary based on income level, the report says.

"If you're low income in Massachusetts, the fact that we have one of the highest rental costs in the nation, the fact that we have a limited and constrained rental housing supply, the fact that we have higher costs for childcare and things like that, I think that's a negative drag," he said.

It's harder to find an apartment to rent in Massachusetts than in any other state, according to the report. The state had the nation's lowest rental vacancy rate in the country in 2022. In March of this year, Boston had the second highest median asking rent in the country, behind New York, and the third highest year-over-year rent increases, the report says.

The report also highlights the state's transportation challenges, with Boston ranked fourth in the world for traffic delays and only about a quarter of customers saying they're satisfied with MBTA services.

For Massachusetts residents on the upper end of the economic ladder, Howgate said he's concerned about the impact of the new 4% surtax on income over $1 million.

"While the surtax just went into effect in January, and we've got to see what the data say, I think the data we have to date points to the fact that wealthier folks are a little more mobile, and so they may be more sensitive to some of those changing factors, both from an economic and a policy standpoint," Howgate said.

Part of the decline can be traced to losses in technology jobs within the commonwealth, Howgate said. While other states, including Texas, Florida and Washington, have seen gains in that sector, Massachusetts has lost about 2,000 tech jobs in the last three years, according to the report.

"The tech sector is a big part of our economy and has been historically," Howgate said. "But what we've seen over the last few years, as you think about how that sector has grown nationally, we haven't gotten that same piece of the pie."

Increasingly, Howgate said, Massachusetts is losing people like Iarossi and Bergholm to neighboring states. Iarossi is able to work remotely and Bergholm commutes into Massachusetts from New Hampshire.

"We don't just have to be afraid of somebody making a major decision to pick up and move to Texas," Howgate said. "We also have to be worried about people saying, 'You know what? I'm still going to have a connection to Massachusetts, but I'm going to live in the White Mountains or get to live on the south coast of Maine.' I think that level of competition wasn't really there before."

The data in the report highlight areas of concern that need to be taken seriously by lawmakers, Howgate said.

"When you look at housing, when you look at tax choices, when you look at transportation, those are all things that at least to some extent fall within policymakers' bailiwick to make thoughtful changes," he said. "So I think we want to ... make sure we're making those decisions with this long-term view of how it's affecting location choices as well."