California’s persistently shrinking population — and the reasons why

Programming note: We’ll be recognizing Presidents’ Day, so WhatMatters will return to your inboxes on Tuesday. 

In 2021, it was big news — the “California exodus.” Now, it just looks like the new trend: California’s population is still shrinking.

According to the latest population estimates from the U.S. Census Bureau, California’s total population declined by more than 500,000 between April 2020 and July 2022. 

Put another way, 1 out of 100 people living in California at the beginning of the COVID-19 pandemic had, two years later, left the state — either by U-Haul or by hearse.

Where’d they all go? 

• Some died, though there were far more births;
• Some left the country, though on net, more immigrants arrived;
• The major driving factor: Californians departing for other states. 

Just counting out-of-staters coming in and Californians leaving, the state’s population saw a 871,127 net decline. If you’re wondering why the state lost a congressional seat at the beginning of this decade, this is why.

This isn’t a national problem. It’s a California, New York, Illinois and Louisiana problem. California is one of only 18 states that saw its numbers decline and had the fourth biggest drop as a share of its population. 

Topping the list of rapid growers are other Western states that aren’t on the pricey coast: Idaho, Montana and Utah. 

That may be why Utah Gov. Spencer Cox recently pleaded with Californians to stay put rather than come as “refugees to Utah.”

• UCLA economist Paul Ong: “While salaries in other regions and states are lower, the cost of housing is even lower.”

But not all of California is shrinking at the same rate. And no surprise, housing seems to be the key explanation why. A San Francisco Chronicle analysis of local population changes between 2010 and 2020 found that the fastest growing city in California was the East Bay bedroom community of Dublin, which permitted four-times as many new housing units per person as nearby San Francisco.

But as California lawmakers grapple with the housing and homelessness crisis, a familiar clash is emerging between state and local lawmakers:

• Despite a no-nonsense warning from Attorney General Rob Bonta, elected officials in Huntington Beach are vowing to fight state mandates to permit more than 13,000 new units over the next decade. They also pledged to push forward a local ordinance to exempt the city from the “builder’s remedy” — an untested state law that punishes cities that haven’t met their state housing goals by allowing developers to build as many units as they like, so long as at least 20% are set aside for low-income residents.
• In the well-to-do ’burbs of Silicon Valley, builder’s remedy applications are beginning to pour in. But some cities are refusing applications outright, while others are charging five-figure processing fees.
• A nonprofit financed by the California Association of Realtors has been on a state-spanning lawsuit spree, asking courts to invalidate multiple cities’ housing plans, paving the way for builder’s remedy applications.
• With hundreds of cities still deemed “out of compliance” with state housing requirements, the Department of Housing and Community Development set up a new web portal inviting Californians to “report potential violations of state housing law.”

More housing conflict: Remember when San Francisco Sen. Scott Wiener introduced a bill earlier this week that would require any developer who wants to make use of a particular housing law to pay their workers union-level wages — but stopped short of forcing developers to hire union members? 

In an ideological divide between the state building trades union and the carpenters, that put Wiener squarely with the carpenters.

On Thursday, the trades responded. They aren’t impressed.

• Trades President Andrew Meredith, in a statement: “Proponents’ attempts to paint this as an affordable housing play are disingenuous. This is clearly all about putting more money in developer pockets.”

Housing and inequality: And in many places in California, high housing costs are a driver of the gap between rich and poor.

Though the tech industry has laid off nearly 95,000 workers since the beginning of the year, Silicon Valley still represents one of the country’s highest pinnacles of wealth. Households across the region hold an estimated total of $1.1 trillion in cash and other “investable” assets. But some households have far more than others.

A new report shows the vast disparity in Silicon Valley: The top 1% hold a third of those assets, which don’t include homes, whereas the bottom half own a mere 1%, writes CalMatters California Divide reporter Alejandro Lazo. Just eight ultra-rich households held more cash wealth than the bottom 50% (nearly 500,000 households) in Santa Clara and San Mateo counties.

The coronavirus bottom line: As of Tuesday, California had 11,084,818 confirmed cases and 99,960 total deaths, according to state data now updated just once a week on Thursdays.
CalMatters is also tracking coronavirus hospitalizations by county. California has administered 87,980,271 total vaccine doses, and 72.6% of eligible Californians have received their primary vaccine series.

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1 Governor touts school spending

On Thursday morning, Gov. Gavin Newsom, First Partner Jennifer Siebel Newsom and state lawmakers paid a visit to Encina Preparatory High in Sacramento to tout some of the state’s recent spending on K-12 education:

• A $4.1 billion plan to convert one in three campuses (including Encina Prep) into “community schools” that offer mental health counseling, tutoring and access to social services alongside pedagogy;
• A new law that requires schools to provide two meals per day to all students, regardless of family income;
• A surge in new spending for arts and music education, after voters passed Proposition 28 last November

The governor, naturally, also took the opportunity to emphasize the education policy differences between California and red states (namely, his favorite foil, Florida). 

• Newsom: “We’re here talking about honest history, not dishonest history. We’re not banning books…This is one of the most dramatic transformations of public education that’s ever happened in this state.”

But that transformation comes at a steep cost. And according to the nonpartisan Legislative Analyst’s Office, the state is going to have even less money to throw around than projected in January.

Then, the governor proposed a 2023-24 spending plan that closed a $22.5 billion deficit. Now the LAO says the deficit will be $7 billion larger.

The analyst’s office also weighed in on the debate between the governor’s office and the state Assembly. Newsom wants to hold off on drawing from the state’s financial reserves, but Speaker Anthony Rendon and other Democrats in the Legislature say that’s why the reserves are there. 

This week, the LAO reiterated that it’s on the governor’s side. Why? Because the economy could always get much, much worse.

• LAO: “Using reserves now to maintain the recent spending peak would mean the state would have less reserves available to pay for its core services if revenues declined further or in the event of a recession.”

2 Newsom’s UC plan under the microscope

From CalMatters higher education reporter Mikhail Zinshteyn: 

Gov. Newsom’s budget proposal for California’s universities is getting renewed scrutiny from the official “eyes and ears” of the Legislature. 

This time, the Legislative Analyst’s Office centered its sights on Newsom’s funding plan for the University of California in a report Wednesday.

Among the highlights? 

The LAO is advising lawmakers to nix Newsom’s plan to make UCLA guarantee admissions to community college transfer students as a condition of receiving $20 million a year in state funds: The “approach sets very poor policy precedence” and “is particularly myopic,” the LAO wrote.

Higher education insiders were baffled by Newsom’s January proposal because it would target just UCLA even though the holy grail for advocates is for the entire UC system to have a transfer guarantee for students with high-enough grades. It’s something that already exists at the Cal State system, though it has its flaws, some have said. The LAO noted UCLA is actually UC’s top performer in accepting transfer students. 

But at a meeting last month, UC President Michael Drake said a transfer guarantee similar to CSU’s “doesn’t apply” to the UC, which is more selective and focuses more on producing students with doctoral degrees. Still, he said UC outperforms other top-tier universities by admitting close to 75% of all community college transfer students in 2021.

And yet, the LAO is recommending lawmakers “consider” just that — a systemwide transfer guarantee of the kind the Legislature created between Cal State and community colleges in 2010. But pulling that off with the UC has its own complications because the system is constitutionally independent, unlike the CSU. Still, the UC has routinely bowed to legislative pressure in exchange for state financial support. 

• Jessie Ryan, executive vice president for the Campaign for College Opportunity: “We should be requiring a clear and simplified path for community college students to transfer to the University of California system.”

She added that a guarantee could help boost enrollment for the community college system, which has seen its student population crater since the COVID-19 pandemic.

The analyst’s office had other quibbles with Newsom’s budget plan, echoing past critiques, and proposed that lawmakers consider:

• Pulling as much as roughly $60 million in annual UC funding because the system is not meeting its existing student enrollment targets;
• Nixing two construction projects at UCLA and UC Merced budgeted at a combined $595 million over three years;
• Making the UC use its own bonds to cover as much as roughly $400 million in capital projects approved in last year’s budget, similar to what Newsom proposed Cal State do;
• Better tying Newsom’s 5% increase in state support to clear deliverables, a sentiment identical to what the LAO said about the governor’s plans for Cal State. 

In fact, Cal State’s faculty union glommed onto that, writing to Newsom this week that his budget should commit more money specifically for instructional costs. 

• The Cal State faculty union: “We ask that you reconsider the practice of providing undesignated funding increases to the CSU.”

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