Big population drops in Los Angeles, San Francisco transforming urban California

[FromSD]

Whoever was writing headlines in LA Times on 25 March needs to take a long vacation. Population loss is transforming LA and SF? If only. Where are the empty freeways in LA or the urban prairies of the Sunset District of SF? When those things start happening I'll worry about population loss in California.

After 2000 the tech bubble burst, state tax revenues cratered, and there was much talk of California as a failed state. The state budget again took a hit following the 2007/8 real estate bubble, and again more talk in places like the New York Times of the failed state of California. Now we're seeing an explosion in property prices--but also healthy job growth and a massive state budget surplus--and again, California is doomed.

It's true that California isn't the population growth juggernaut that it was in the first 80 years of the 20th century. It turns out that California's population growth started to decelerate just about the time that easily developable land ran out in the urban coastal parts of the state. And not coincidentally housing prices in California started to go out of whack at that time also. Of course, housing prices were always relatively expensive in LA and SF, but the difference wasn't the magnitude that it is today. So the slowdown in population growth isn't surprising.

LA in particular doesn't appear to be a city in decline. Despite the apparent population loss, there are construction projects all over the city. The downtown skyline is booming. There is no abandonment. In the 1980s LAs population grew by 17% even though greenfield residential development was pretty much at an end. The city grew more crowded as newly arrived immigrant families doubled up in houses and apartments and converted garages. Schools on the east and south sides were bursting at the seams and the school district resorted to year round school to accommodate the growing numbers of students. School enrollments have now subsided and the schools that got built to handle the explosion in student population have excess capacity. I suspect that the pendulum is swinging back as the people in LA's overcrowded neighborhoods leave the city in search of lower housing costs--first to Inland Empire and High Desert, and then to other states.

Long story short, there will always be a cottage industry of headline writers signaling California's impending doom. The state has had such an important place in the nation's psyche, that it is just too tempting a target. I also think that as Texas and Florida continue to grow, they will find themselves victims of the same phenomenon.