I had assumed that when city sentiment is bad enough, people will emigrate (from the poorest houses). But, I recently ran a few tests with awful city sentiment, and never managed to get any resident of a residence (or manor or estate) to emigrate. I tried giving several of my Very Hard cities (which have no houses poorer than residences) a wage rate of 0 and a tax rate of 25%, and even though city sentiment quickly became "You are universally loathed because of so many slums", no one left!
I experimented on my Dunqul Oasis, deleting a school (among other things) to make some common residences devolve to spacious apartments, lowering the wage rate to 0, and raising the tax rate to 25%. When emigrants started leaving the spacious apartments, I replaced the school. Once the spacious apartments evolved back to common residences, emigration stopped.
There may be other factors involved, but I'd guess that people will only emigrate from apartments or poorer houses. A city that does not require immigration and that has no houses poorer than residences should be able to pay no wages and collect the maximum taxes. This feature is of little use to me, and I probably won't use it (except perhaps in a contest), since my cities typically make plenty of money long before all houses reach their final form and are full.