Population-loss streak

California finally reverses its population-loss streak

A rebound in legal immigration and other factors fueled the state’s first population increase since 2019.

By BLAKE JONES

California has reversed a three-year population decline that proved politically fraught for Democrats and magnified the state’s affordability crisis.

A rebound in legal immigration and drop in Covid-19 deaths fueled the increase of 67,000, or 0.2 percent, in 2023, according to data released Tuesday morning from the state Department of Finance.

California still lost more residents to other states than it gained from them — as has been the case for two decades — but the number of people leaving for other parts of the country fell to pre-pandemic levels.

The trend reversal will be a welcome sign to Democrats in the nation’s largest state, where slowed growth has invited scathing critiques from national Republicans and already cost California a House seat.

“We have again returned to an era of positive growth, certainly lower than some of the go-go growth that we saw in the 70s and 80s and 90s,” said Finance spokesperson H.D. Palmer. “Some of the major reasons that we had declines in population are receding in the rearview mirror.”

California began to shrink in 2020 due to pandemic deaths, federal immigration restrictions and declining birth rates. It was the first time the state lost population since it began recording the numbers in 1900.

People also moved out of the state in increasing numbers, many of them able to work remotely and seek housing cheaper than what was available in costly business hubs including Silicon Valley and San Francisco.

Coastal workers increasingly moved to landlocked parts of California, too, but that trend appears to have slowed. Los Angeles and San Francisco grew last year, in a reversal of fortunes which suggests that a return to hybrid or in-person work is attracting some employees back to major cities.

“Individuals were newly freed from the office in California” in 2021 and 2022, Walter Schwarm, a demographer for the Department of Finance, said in an interview. “Some people temporarily moved places and now are back because their employer wants them to be around a little more often.”

California’s heavy reliance on immigration caused it to be hard hit by a slowdown in professional visa processing under the Trump administration and then a near-halt of movement into the country at the onset of the pandemic. Legal immigration processing has since sped up, counteracting declining birth rates and movement out of the state that have chipped away at the state’s population gains. (The Department’s estimates do not include undocumented immigrants).

Also helping: The net loss of California residents to other states fell from a peak of 356,000 in 2021 to 91,000 in 2023.

Construction of desperately-needed housing remained steady last year, according to the new data. California added 116,000 units, or 0.8 percent of the state’s inventory. Around half of those were single-family homes, while most of the rest were multi-family homes like apartments.

Such construction should have put downward pressure on prices, “which certainly helps affordability,” said Schwarm, and that may have helped urban areas stem population losses.

The Department of Finance is projecting slow, positive growth over the coming years. But it could take more than that for California to regain a House seat, as some landlocked states continue to grow rapidly.

If congressional apportionments were made based on a Census population estimate from last year — rather than the 2020 Census — California would have lost three House seats rather than one, according to an Election Data Services report.

“In addition, sluggish or negative population growth in some parts of the state — including Los Angeles County and most rural areas — has reduced representation for those places compared to faster-growing areas like the Inland Empire or the Sacramento metropolitan area,” researchers wrote in a separate Public Policy Institute of California report in January.