Commentary: Housing Costs Are Driving California’s Population Loss

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.