Los Angeles in danger of becoming ‘the next Detroit’ as film and TV productions move out

Hollywood insiders have warned that Los Angeles is at risk of becoming “the next Detroit” amid fears that the city’s decades-long status as the capital of TV and film could come to a swift end if entertainment productions do not receive immediate tax relief incentives.

Amid a sharp rise in the number of celebrities moving out of L.A. to places like Texas and Florida, industry workers have now raised the alarm about the stark decline in the number of entertainment projects being carried out in Hollywood and throughout California.

These fears were the focus of an April 14 town hall in which lawmakers and movie producers pushed for changes to the state’s entertainment production tax incentive in order to cover up to 35% of qualified expenditures, while also widening the range of productions that would receive these subsidies.

“This is not hyperbole to say that if we don’t act, the California film and TV industry will become the next Detroit auto,” said producer Noelle Stehman, a member of the “Stay in LA” campaign who spoke at the event, according to The Hollywood Reporter.

Detroit was once seen as America’s auto production hub, with three major car manufacturers headquartered there: General Motors, Ford, and Chrysler (now known as Stellantis). However, in the 1960s, those companies began moving their factories to the suburbs, taking a huge number of workers — and former Detroit residents — with them.

Now, Stehman believes that Los Angeles’ entertainment industry could be going the same way, having already lost major ground to its competitors in recent years.

While many entertainment executives live in Los Angeles, state Sen. Ben Allen said this will do little to help the city retain the lion’s share of productions if housing costs in the city are too high for the middle-class worker.

“The studios don’t care where they do the work. They’ll do it anywhere,” he said at the event. “They’re still producing shows. What a lot of our colleagues simply don’t understand is that this is a middle-class problem. The studio heads are going to bed in Bel-Air no matter what.”

The middle-class problem Allen referred to is the high cost of living in Los Angeles. The median income in the city is currently $95,625, but the median home sale price in 2025 is almost 10 times that ($965,300).

That number has grown by nearly 50% from 10 years ago, when the median income was $63,000 and the median home sale price was $525,000.

Entertainment workers have long been calling for California to offer larger — and more widely available — tax incentives, with the backing of Gov. Gavin Newsom, who vowed in October 2024 to increase film incentives from its current cap of $330 million to $750 million.

Lawmakers hope that they can keep the film and TV industry thriving by providing tax relief. Newsom’s proposed SB630 bill will also boost the credit to 35% while expanding the category of productions that qualify to include animated titles, shorter TV shows, and some unscripted projects.

California is the only production hub that does not allow any portion of “above-the-line” costs, like salaries, from qualifying for incentives—prompting many to seek cheaper options.

The bill was created to help boost what’s become a downturn in filming in the state. California offers a 20% base credit, which is lower than other regions. For example, New York offers a tax credit of 30% of qualified production expenses. Georgia has a 20% transferable tax credit, and an additional 10% can be “earned” by including an embedded Georgia logo and link on the projects landing page. Illinois offers a 30% credit, with additional incentives including a 15% credit on salaries paid to people who live in economically disadvantaged areas.

A recent report by nonprofit organization FilmLA indicated that on-location production in Los Angeles was down by 22.4% in Q1 of 2025 versus the same period in 2024.

These productions included commercials, feature films, and TV shows—with the report indicating that the drop in numbers had little to do with the recent California wildfires, which largely affected areas that are rarely used as filming locations.

“Loss of filming opportunity in no way compares to the cost of the Eaton and Palisades Fires in terms of loss of life, resident displacement and property damage,” FilmLA VP of Integrated Communications Philip Sokoloski said in a statement.

“The fires sent many productions scrambling to reschedule shoots and displaced hundreds of industry workers from their homes. But their impact on local filming levels appears to have been temporary.”

Detroit’s demise

California residents fear the exodus of film productions could be the start of the state losing its celebrity allure, similar to auto’s decline in Detroit.

Now, Detroit is trying to rebuild following decades of problems. Auto manufacturing took a downturn when Chrysler and GM declared bankruptcy in 2009. It had a ripple effect on the city where thousands of residents were employed by the automakers. In March 2011, Detroit’s population fell to 713,777, according to the U.S Census Bureau. It was a 25% decline from 2000 and the lowest level in 100 years.

In 2013, a state review board deemed the city “operational dysfunction” meaning it was not able to restructure its finances, leading to the city filing for Chapter 9 bankruptcy. A few months later, a federal judge approved a bankruptcy plan—wiping out about $7 billion in debt.

Los Angeles in turmoil

Losing the clout of the entertainment industry will be a blow to local businesses and will make for a difficult recovery. Hollywood is known for its big feature film productions and TV backlots where iconic series are filmed. At a time when every dollar counts, producers are looking at how to cut budgets, and if it means going on location — they’re following the money. It’s a win-win for filmmakers and the state that wins the production contract.

“This is not a tax giveaway,” said state Assemblyman Rick Zbur. “This is a job program that is keeping people in their homes, keeping people off the unemployment rolls. If we don’t do this, it’s going to cost a lot, lot more than these tax credits are costing us.”

California’s competition from other states is cause for concern, and that’s why passing a better tax relief program could be a step in the right direction to keep the entertainment industry in Hollywood.

Celebrities who have moved

Not all celebrities have stayed loyal to living in L.A., with several opting to relocate abroad in the wake of President Donald Trump’s election win. They include Eva Longoria, Ellen DeGeneres, Richard Gere, and Rosie O’Donnell.

Others have chosen to move elsewhere in the US — often to more tax-friendly states like Texas.

Matthew McConaughey relocated his family to a property outside of Austin, TX, in 2014, while Glen Powell also moved back to the Lone Star State.

Meanwhile, Kelly Clarkson moved production of her hit talk show from L.A. to New York City in 2024—while some stars, like John Goodman, opted to leave California years ago, in his case relocating to New Orleans.