Commentary: Housing Costs Are Driving California’s Population Loss

Share:
Photo by Brandon Griggs on Unsplash

By David M. Greenwald
Executive Editor

I keep reading in certain circles that we don’t have a housing crisis in California because California is now losing population.

But that ignores the fact that a big cause of that population loss is in fact housing.

The LA Times reports that “the state’s population dropped by more than 500,000 people between April 2020 and July 2022.”  The Times cited that a “primary reason for the exodus is the state’s high housing costs” as well as an “increased ability to work remotely — and not having to live near a big city — has also been a factor”—which would appear related to the high cost of housing.

The Times reports: “The rate of the exodus may now be slowing as the pandemic’s effects ease, but some experts say it could be a few years before the Golden State starts to record the kind of population growth it has seen in the past.”

“People who are leaving are much more likely to be homeowners after they leave,” said Dowell Myers, a professor of policy, planning and demography at USC.

Meanwhile, Paul Ong, director of the Center for Neighborhood Knowledge at UCLA, pointed to “economic, health and sociopolitical factors driving people to leave the state. He noted that housing prices in California have pushed many to move to states where costs are lower.

“While salaries in other regions and states are lower, the cost of housing is even lower,” he said. “This means that they have a higher standard of living because of more disposable income and/or high chance of owning.”

The findings from the LA Times mirrors that of the PPIC from a year ago.

The PPIC Statewide Survey found “that 37% of Californians have seriously considered leaving the state because of housing costs.”  Since 2015, “among interstate movers who cite housing as the primary reason, California has experienced net losses of 413,000 adults (according to the Current Population Survey).”

PPIC noted, “The picture painted by these trends illustrates the economic challenges faced by many lower- and middle-income Californians.”

They added, “The state’s high cost of living, driven almost solely by comparatively high housing costs, remains an ongoing public policy challenge—one that needs resolution if the state is to be a place of opportunity for all of its residents.”

Ned Resnikoff, Policy Director of California YIMBY, in a Tweet, disputed that California was attempting to force its poor or wealthy people out of the state, pointing instead to a middle-income trend based on housing costs.

“As far as I can tell, the people who are leaving are largely those who have enough money to be mobile but not enough money for CA’s insane cost of living. It’s the very rich and very poor who remain,” he tweeted.

He said “the fact is that California has been losing lower- and middle-income residents to other states for some time while continuing to gain higher-income adults.”

And added “The biggest risk is not that California loses its wealthy population but that it continues to hollow out its middle class and plunge deeper into a second Gilded Age.”

Many have attempted to argue that with the decline in population in California, it has alleviated the housing crisis—but far from that being the case, the housing crisis actually appears to be driving the population decline.

This creates a vicious circle, where cost of housing is driving more and more people—most of them middle- and lower-income residents—out of the state.  These demographic impacts will impact the economy and our schools.

Despite a number of years of focusing on housing issues, the state has still not found reliable ways to generate the additional housing needed to stabilize the housing markets and end the housing crisis.

Share:

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

Related posts

7 thoughts on “Commentary: Housing Costs Are Driving California’s Population Loss”

  1. Ron Oertel

    I keep reading in certain circles that we don’t have a housing crisis in California because California is now losing population.

    What “circles” are those? 🙂

    And how exactly is the “housing crisis” defined?

    But that ignores the fact that a big cause of that population loss is in fact housing.

    That’s one of the causes, but no – it’s not “ignored” at all.  That’s actually the free market at work.

    Many have attempted to argue that with the decline in population in California, it has alleviated the housing crisis—but far from that being the case, the housing crisis actually appears to be driving the population decline.

    Uhm, as more people leave, there’s less demand for housing.  That’s called “supply-and-demand”.  (The same thing that YIMBYs are normally so fond of – but apparently only when it supports their “cause”.)

    YIMBYs do their best to only look at one side of the supply/demand model. Which provides a clue as to “who” they actually are.

    These demographic impacts will impact the economy . . .

    If people (and companies) remaining (or moving to the state) are wealthier on average than those leaving, it shouldn’t have a net detrimental impact on the economy.  (Though the net exodus might slow-down/reverse housing costs – which in turn impacts property taxes collected.  In fact, that’s already been happening in places like San Francisco.)

    Regardless, we’re eventually going to have to learn to live with an economy that’s not based upon pyramid schemes.

    . . .  and our schools.

    So?

  2. Richard_McCann

    That’s actually the free market at work.

    Restrictive zoning and arduous permitting requirements are not the “free market at work”–they are direct government interventions to restrict housing supply, no ifs, ands or buts. Government interventions can be necessary to improve market functionality including enhanced non-monetary benefits and reduced harm, but in this case these government interventions are being used to harm those who have less means. That’s discriminatory to the extent that it increases segregation.

    Rather than trying to characterize the Chronicle which carries a range of viewpoints, please directly rebut the article. Here’s another Chronicle article about a bill by Assemblymember Matt Haney to end SF’s unique law allowing building permit appeals (no other city has this provision.) 
    https://www.sfchronicle.com/sf/bayarea/heatherknight/article/matt-haney-housing-appeals-17799039.php

    1. Ron Oertel

      Rather than trying to characterize the Chronicle which carries a range of viewpoints, please directly rebut the article. 

      I dropped my subscription to the Chronicle some time ago (and cannot see most of their commentary as a result), but it absolutely does not represent a variety of viewpoints.  It’s equivalent to the Vanguard, regarding housing issues.

      But you can find any number of articles (and referenced studies) which present different points of view (at no cost, for that matter).  For example, here’s one I haven’t even fully read:

      A leading voice on urban planning in CA debunks housing trickle-down

      “The problem is that under some market conditions, more supply doesn’t lead to market equilibrium because it actually creates its own demand… Santa Barbara has housing prices that are not supported by the underlying dynamics of the local economy, for one very simple reason: The uber-rich from around the world drive up home prices by paying premium prices, often for houses they don’t actually occupy very often. This throws the supply-demand equation out of whack; if you build more houses, the result might just be more uber-rich folks from out of town showing up to buy them, and that doesn’t help ordinary folks”

      He does go on to show his generally pro-development position, which is fine and expected from Fulton. But the fact that William Fulton–a true planner’s planner–paints a definitive argument relevant to the San Francisco “market” that counters the local boosters is a key turning point in the seemingly endless debate about whether our crisis of affordability is simply solvable by increasing market-rate housing supply.

      So, thank you William Fulton. California’s top planner really debunks SPUR’s Gabriel Metcalf on the theory of Trickle-Down housing policy.

      In what seemed too perfectly timed to be simply ironic, the Sunday following Metcalf’s piece the Chronicle published an article on the front page business section titled: “Want a luxury apartment in San Francisco? You’re in luck”.

      https://48hills.org/2015/08/a-leading-voice-on-urban-planning-in-ca-debunks-housing-trickle-down/

  3. Ron Oertel

    I realized that this is a more-appropriate article in which to post the following comment, especially since I’ve reached the 5-comment limit in the other, somewhat similar article:

    So again, the data from the Department of Finance shows a projected net INCREASE in migration TO California, starting in 2027.

    And yet, the population itself is not expected to increase over the next 40 years or so, since deaths are projected to outpace both the (net) immigration TO the state, as well as births.

    As such, the claim that “high housing prices” are causing a net exodus is not supported by the projected data from the Department of Finance.

     

     

    1. Ron Oertel

      So again:  Just want to make it clear that migration is expected to be net positive, starting in 2027.

      As such, the entire claim that “high housing costs” are causing a net exodus is not supported by projected data.

      Even when combined with the birth rate, the net positive immigration still won’t be enough to cause the state’s population to grow over the next 40 years or so.

       

Leave a Reply

X Close

Newsletter Sign-Up

X Close

Monthly Subscriber Sign-Up

Enter the maximum amount you want to pay each month
$ USD
Sign up for