Business & Economy

LA is losing people to other states while the Bay Area brings them in

A for-sale sign stands in front of a home in Central Los Angeles.
A for-sale sign stands in front of a home in Central Los Angeles.
Christopher Okula/KPCC

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California's economy may be growing, and its population may be steadily increasing. But more people continue to move out of the state every year than those moving in from other states.

A new economic analysis published Thursday by California think tank Next 10 and Los Angeles-based Beacon Economics says California is experiencing "growth amid dysfunction." The researchers find that even during recent boom times, residents have been fleeing many parts of the state that have seen declines in high-paying jobs, coupled with rising housing costs. 

"It really does boil down to folks being able to put a roof over their head," said Adam Fowler, Beacon's director of research. 

From 2006 to 2016, over a million more people left California than came in from other states.

That doesn't mean California's overall population is declining, though. Newborns and immigrants from other countries keep California’s population steadily growing. The state's Department of Finance said this week that California added 309,000 new residents over the course of 2017, bringing the state's population to 39,810,000 as of January 1, 2018.  

But if you only look at people moving within the United States, California continues to lose people to states like Texas, Arizona and Nevada. 

As California's economic recovery took hold in recent years, some areas began to buck that trend. Housing is definitely expensive in the Bay Area. But high-wage tech jobs there have been growing. Fowler says, as a result, "the Bay Area is one of the few places that experienced overall migration growth since 2014."

Meanwhile, Southern California has seen an increase in low-wage jobs — and more people moving out than coming in from other states.

The report finds most of the people leaving California tend to earn less than $30,000 a year. The state is doing a better job of attracting people earning between $50,000 and $100,000 — more households at that income level have moved into California than left. 

California's out-migration has not reached the levels seen in the mid 2000s. Net out-migration was only half as high in 2016 as it was in 2006. But the researchers say in recent years, out-migration is starting to pick up again.

Fowler said if California doesn't fix its housing crisis soon, broad economic growth will be constrained and the divide will only widen between the haves and have-nots.

"The continued status quo of our housing policy is displacing a lot of lower-income people," he said. "Unless we want to continue down this path toward what will really be a Country Club California situation, we've got to think seriously about engaging in some reforms of a really dysfunctional system."