Boston Real Estate & the Massachusetts Exodus Crisis: What the Data Shows

Massachusetts is losing wealth — and the people behind it — at a pace that should worry anyone with a stake in the state’s housing market, its tax base, or its nonprofit and cultural institutions. The numbers are no longer anecdotal. They’re in the IRS’s own migration data, and they tell a consistent story: high earners are leaving, and they’re taking billions of dollars with them.

The Data: Billions in Lost Income, Year After Year

The IRS’s Statistics of Income migration data — the most reliable measure of who moves in and out of a state, and how much income moves with them — shows Massachusetts has posted a net loss of adjusted gross income (AGI) in every recent tax year on record. The losses have been substantial and, in some years, accelerating.

Data and Image Courtesy of the Pioneer Institute

In the 2021–2022 tax year, Massachusetts lost a net $3.9 billion in AGI to outmigration, with high earners making up the bulk of it. In 2022–2023, roughly 30,000 more people left Massachusetts than moved in — one of the highest net losses of any state — taking a net $4.2 billion in AGI with them, according to Boston Globe reporting on the IRS release. A separate Pioneer Institute analysis of the same 2023 data put the figure at $4.18 billion, driven disproportionately by young workers and high earners. Layered across multiple recent tax years, cumulative AGI losses tied to outmigration have run well into the billions — a trend several state policy organizations have flagged as historically unprecedented for Massachusetts. It is no coincidence that this started the first full year after Massachusetts’ 4 percent surtax on income above $1 million took effect.

Earners making $200,000 or more have accounted for a disproportionate share of the lost income relative to their share of people who actually left — in some years, close to 30% of departures but a majority of the dollars. It's important to be accurate and note the $200,000 threshold is the IRS's reporting cutoff. As a result, the data captures a much broader group of high earners than those actually subject to the surtax. That being said, the pattern for high earners is more than clear- they want to move to more tax friendly states. The Tax Foundation calculates that Massachusetts lost roughly $141,672 in AGI for every net resident who left — one of the steepest per-capita losses of any state in the country, well above comparable figures for New York, New Jersey, and Illinois.

Where is that money going?

Overwhelmingly, those residents and their money are going to no-income-tax states. Florida alone posted a net AGI gain of $20.6 billion, the largest of any state, equivalent to roughly $184,771 in incoming wealth per new resident. Texas, the Carolinas, and Tennessee also posted strong gains. The pattern is a direct mirror image of what Massachusetts is losing.

It is worth noting that affordability — housing and childcare costs — are likely an additional driver of departures, as residents are able to make their money go further elsewhere. Regardless of personal causes, the AGI figures themselves aren’t in dispute.

Why This Matters for Real Estate

Every dollar of AGI that leaves the state is a dollar that isn’t being reinvested in Massachusetts housing, commercial real estate, or the local economy that supports both. High-net-worth households are disproportionately the investors behind development projects, and the donors underwriting the civic institutions that make Massachusetts communities desirable in the first place. They left because they stopped believing Massachusetts was competitive and business friendly.

The Rent Control Debate — and a Bullet We Dodged

This spring's fight over a statewide rent control ballot initiative was, in many ways, a proxy war over exactly this competitiveness question. At Boston Pads we were outspoken against the measure — not because we oppose affordability as a goal, but because the only sustainable fix for a housing shortage is more supply.

In June 2026, the Massachusetts Supreme Judicial Court settled the question for this cycle. In Cella v. Attorney General, the SJC ruled that Initiative Petition 25-21 — which would have repealed the state's 30-year ban on rent control and capped annual rent increases at 5% or the rate of inflation, whichever is lower — was constitutionally barred from the November 2026 ballot. The Court found that an exemption written into the petition for religious and nonprofit-operated housing caused the measure to fail under Article 48 of the Massachusetts Constitution, which prohibits ballot questions that "relate to religion, religious practices or religious institutions".

Substantively, the ruling had nothing to do with the merits of rent control as policy — it turned on a drafting choice by the petition's authors, not a judgment on rent caps themselves. That's worth being honest about: this wasn't a rejection of rent control on the merits, and a future petition without the religious-housing exemption could clear the same bar.

But for now, it's still a win. Massachusetts's statewide prohibition on rent control, in place since 1994, remains intact, and the market was spared a policy that would suppress new housing investment right when the state needs more of it, not less. Developers and investors get more runway to plan around the current rules rather than a live, unresolved rent-cap threat on the November ballot. The underlying fight isn't over — it will very likely come back in a cleaner form in a future cycle — but for the time being, supply-side advocates have breathing room they didn't have a few months ago.

The Bigger Picture

None of this changes the fundamentals that make Massachusetts a place worth building in. It remains home to world-class universities, hospitals, and a life sciences cluster that few states can match. But "world-class institutions" and "competitive place to build wealth" are not the same claim, and the migration data suggests a widening gap between the two.

For real estate — residential, commercial, and everything in between — the implication is straightforward: demand from high-net-worth buyers and investors is a function of confidence in the long-term trajectory of the state, not just its current amenities. Keeping that confidence, and the capital that follows it, will depend less on ballot-box fights over rent caps and more on whether Massachusetts can credibly compete with Florida, Texas, and the Carolinas on cost, taxes, and ease of doing business.