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Goodbye, New Jersey; hello, Pennsylvania

After their youngest child finished high school in June, destined for college, Janice and John Potts lost no time bolting from New Jersey.

Longtime Haddonfield residents John and Janice Potts relocated to Center City last year. "We downsized in terms of space," said Janice Potts, "but cut our property taxes in half." (Ron Tarver / Staff Photographer)
Longtime Haddonfield residents John and Janice Potts relocated to Center City last year. "We downsized in terms of space," said Janice Potts, "but cut our property taxes in half." (Ron Tarver / Staff Photographer)Read more

After their youngest child finished high school in June, destined for college, Janice and John Potts lost no time bolting from New Jersey.

By the end of July, the longtime Haddonfield residents were cheerfully ensconced in a three-bedroom rowhouse near Philadelphia's Washington Square.

Their new abode is much smaller than the 4,500-square-foot home (with swimming pool) that they sold, but it comes with a huge plus.

"We downsized in terms of space, but cut our property-tax bill in half," said Janice Potts, 52, an outsource-services manager for a Center City firm. John Potts, 54, works for a networking-systems company, often from home.

The Pottses spent as much to buy their Pennsylvania house as they realized from their Jersey sale. "Basically, we swapped dollars," she said. "But for us, the move made perfect sense. We got rid of one car. I walk to work. It's a more convenient life."

According to the 2010 census, "in-migration" from New Jersey to Pennsylvania is a burgeoning movement that accounted for 80 percent of the Keystone State's net gain last year of 25,770 residents from other states.

In interviews with demographers, real estate agents, financial planners, and the recently relocated, tax savings, quality-of-life choices, and new commuting patterns emerged as the driving forces behind the influx.

Does that make Pennsylvania the new destination state?

Not of the magnitude of nationally ranked No. 1 Texas. But it is the undisputed leader in the Northeast, where all but three states saw more people move out than in: Vermont, New Hampshire, and Pennsylvania, by far the most formidable draw.

In 2010, Pennsylvania's population was 12,577,555. That year, 235,580 out-of-staters arrived and 209,810 residents moved out, for an in-migration gain of 25,770 - the eighth-largest nationwide.

(The tabulations do not include births, deaths, or immigration from overseas.)

"The commuting zones for New York, New Jersey, and Maryland are expanding into Pennsylvania," said Gordon De Jong, professor of sociology and demography at Pennsylvania State University.

According to De Jong, the Pennsylvania counties most benefiting from state-to-state moves are: Pike and Monroe, within commuting distance of the New York metropolitan labor market; Northampton, Bucks, and Lehigh, with proximity to New Jersey's labor market; and York, Adams, and Franklin, within the Baltimore/Hagerstown metropolitan market.

New Jersey's 2010 population was 8,709,933. Domestic migration produced a net loss of 66,603 with 127,369 moving in from other states and 193,972 moving out. Only Illinois, New York, and California lost more last year.

Kathleen Conway, of the Prudential Fox & Roach real estate office in Society Hill, said many of her clients were Garden State transplants.

"The main reason they are coming is real estate taxes," she said. New Jersey "people tell me their taxes are $17,000 a year. My goodness, I had never heard of that."

Annual taxes on a "comfortable townhouse" in the Washington Square or Fitler Square neighborhoods, she said, are closer to $5,000.

A drop from $17,000 to $5,000 is a monthly saving of $1,000.

"At today's 4 percent mortgage rates, $1,000 equals $250,000 in extra buying power," said Conway, noting that many of her clients make use of that equation to buy up.

Vito Cosmo, a managing director of the Philadelphia office of the accounting firm Grant Thornton, said Pennsylvania's flat tax on personal income was another lure for New Jerseyans.

"The personal income tax rate in Pennsylvania is a flat 3.07 percent," he said, "whereas in New Jersey, the rate can be double or triple that, depending on your income."

In recessionary times, "people are more likely to stay put," said De Jong, the demographer. That's another factor that contributed to Pennsylvania's gain, as did the continued aging of the population.

"Over the past decades," he said, "a smaller proportion of the state's population is in the high-out-migration [age group of] 18 to 30." So at a time when more people are coming in, fewer are leaving.

The trend is intensifying.

In raw numbers, in-migration to Pennsylvania from all other states in 2005 was 221,277 and grew to 235,580 in 2010. Out-migration from Pennsylvania to all other states in 2005 was 218,410; it dropped to 209,810 in 2010.

Pennsylvania's affordability compared with New Jersey's and New York's has been drawing urban-oriented artists, musicians, and assorted hipsters to Northern Liberties for more than a decade, said Monika Kreidie, director of NLArts, a visual-arts program for children in a community center at Third Street and Fairmount Avenue.

The latest influx, she said, includes musicians and rappers drawn to Fishtown for not only the housing but also the venues, such as Johnny Brenda's and The Fire.

While many painters and sculptors moved to Philadelphia from New York for affordable studio space, artists Colin Keefe and his wife, Andrea Wohl Keefe, recent transplants from Brooklyn, have a different story.

They had plenty of studio space in New York - 2,000 square feet - but their apartment was tiny, and it felt even smaller after their son, now 5, was born.

"Our whole life was in 600 square feet of apartment space," Colin Keefe said. "It wasn't going to get any bigger, but my son was."

Through a software-consulting gig in Fort Washington, Colin Keefe was familiar with Pennsylvania.

"Philadelphia started to grow on us as a potential place to live," he said. "What it came down to for us: We wanted to have a home and studio space.

"That wasn't really possible in Brooklyn. To buy the [Mount Airy] house that we have here, in Brooklyn is $800,000, and that was not in the realm of possibility. We were looking for a situation where we could have everything in one package."

Their Mount Airy house, with a carriage house in back, fit the bill. They have adequate work space. On the ground floor, they opened a gallery, Mount Airy Contemporary.

They were looking for an arrangement that felt "green, but also city," said Colin Keefe. "Mount Airy is really what sold us on Philadelphia. Idyllic, green, and yet still part of a larger entity."