According to a new report released Friday by the California Department of Finance, California’s population fell by 182,000 people last year, the state’s first yearly population loss since first becoming a state in 1850.
The overall growth rate of -0.46% was largely attributed to three major factors: a loss of natural increase through births, a decline in foreign immigration due to COVID-19 limitations and heightened federal immigration restrictions, and a larger than usual death rate due to COVID-19.
Shifts were also noted between counties, with coastal counties such as Los Angeles and San Francisco losing people while inland counties such such as Sacramento and San Benito significantly gained people due to a rise in new home construction. Los Angeles County specifically saw a 0.9 percent population loss, with San Benito County showing the highest growth rate in the state with 1.7%.
Despite the overall population loss, new housing units spiked to the highest levels since the housing market crash during the great recession in the late 2000’s. 103,073 new housing units were constructed in 2020, the most since 2008. While some cities saw population growth rates stemming from housing production be significantly higher in many Bay Area and Southern California cities with rates between 5% and 7.5%, one major outlier was recorded by the state. Paradise, located in Butte County, showed a large 31.2% rise, largely due to new housing built as recovery from the deadly 2018 Camp Fire.
Although not stated directly by the report, experts have noted many other factors for population loss and population shifts from coastal cities to inland cities such as high tax rates, affordability issues, and cost-of-living factors.
“It wasn’t just COVID that did this,” said Glendale-based accountant Jerry Loeb, who specializes in clients paying taxes in 2 or more states, to the Globe. “A lot of people don’t want to pay those high taxes anymore.”
“And this is largely a lower income bracket issue. The news focuses more on wealthy people who left, but the vast majority have been middle class and below. The state is squeezing many people, and they’re moving out because of it. It’s still not bad enough to cause a really big exodus, as many people deal with higher taxes by justifying it with the weather or scenic views or ease of living. You know, a sunshine tax. But each year that burden has become a little bigger, and 2020, with many out of work or allowed to work remotely, moved out.”
California population expected to rebound this year
However, the report also noted that the state expects to rebound with a positive population growth again in 2021 due to a decline in COVID-19 deaths and changes in federal immigration policy.
“As pandemic-related deaths decline and with changes in federal policy, California is expected to return to a slightly positive annual growth when calendar year 2021 population estimates are released in May 2022,” notes the report.
Department officials reiterated those findings in a statement on Thursday.
“As the pandemic recedes and with changes in federal immigration policy, we expect to return to more normal immigration trends into California from other countries,” said Department of Finance spokesman H.D. Palmer. “All of which means that by the time we do this same projection 12 months from now, we expect that 2021 will show a return to a slightly positive growth rate.”
Remote workers being recalled back and “the allure of California” may also play a part is a population rebound this year.
“People can’t stay away from California, even during off stretches of time,” added Loeb. “Already this year I’ve been dealing with taxes of people moving back here from Texas and other states. That winter freeze out in Texas pushed many to move back, at least among my clients, so we’ll see what kind of effect it has next year.”
“California is coming back next year in terms of population, but it remains to be seen by how much.”
The Department of Finance report also comes a week following the release of some 2020 Census statistics showing California having a significant population slowdown, resulting in the loss of one Congressional seat and one electoral vote this decade.
As of this year, California’s population sits at just under 39.5 million.