The Morning Report
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San Diego changed when the Cold War ended.
The county grew by an average of 30,000 people per year just from transplants moving here from other parts of the country, from 1970 until 1990.
“Reagan was fighting off the Russians and defeated them by outspending them, and lots of that spending came to Southern California,” said Dowell Myers, a demographer at the University of Southern California.
When the Cold War ended, so did the spending, and so did the influx of domestic migrants to San Diego.
“If there was a depressing time to live in San Diego, it was then,” said Clint Daniels, who manages long-term population projections for the San Diego Association of Governments, or SANDAG.
Since 1990, the region’s population has lost an average of 12,000 people per year from San Diegans relocating. It coincided with a national recession that was especially bad in California, Myers said, leaving the state “basically in a depression.”
SANDAG’s long-term growth projections, the basis for many regional planning decisions, started to falter. They’ve repeatedly overestimated actual growth ever since 1990.
“Those forecasts didn’t have knowledge of a changing trend,” Daniels said. “They were working off the assumption that San Diego would continue to be a net attractor.”
Long-term projections still haven’t found their footing.
Researchers thought California’s growth in the 1980s — unparalleled in American history, Myers said —was normal, rather than the historic aberration it’s proved to be. They wrote the 1990s off to a recession, assuming the state would get back to growing in the 2000s. That didn’t happen, either.
“You have two bad decades in a row and you ask, ‘What’s next?’” Myers said.
A New Regional Economy
Population growth comes from only four things: Babies are born, and people die; and international and domestic migration either brings more people here, or sends them away. That’s it.
Births, deaths and international migration have been reasonably consistent in San Diego. Almost all of the noise in how much or little the population grew each year came from domestic migration.
Military cutbacks led to that first dramatic drop in domestic migration.
But since then, the region’s nonetheless failed to make any prolonged headway in attracting new people.
Partly, that’s because income growth hasn’t been strong enough, Daniels said.
“Income growth from 1970 to today has grown marginally, but it just hasn’t been significant in the region.”
Lower levels of income growth might have been less damaging, if they weren’t paired with high housing prices.
“Housing prices have basically been a wall that’s been blocking migrants from coming here,” Myers said. “That has set up the turnaround.”
The dramatic change in domestic migration — with more people leaving San Diego than coming — is the basis for the oft-repeated point that San Diego’s population now grows naturally, meaning it comes from more births than deaths (with an assist from a reasonably steady flow of international migration).
But the combined effect of low wage growth and high home prices has mostly hit the population in two age ranges: middle-age folks, and their kids.
From 2008 to 2013, the population of people between the ages of 35 to 49 fell by nearly 30,000. Those ages 10 to 19 fell by 22,000 in the same period, according to a study last year by the National University System Institute for Policy Research.
The number of people in their 20s and early 30s, and those in their 50s and 60s, continued to increase.
“San Diego is exporting mid-level age ranges and their families to other areas,” the report reads. “Young adults may still flock here for educational and entry level work opportunities, but find they are not able to afford suitable housing to raise their families and therefore move elsewhere.”
Economist Jed Kolko, who works for the real estate website Trulia, described the trend in economic terms for California as a whole in 2013.
He found that from 2005 through 2011, people making less than $40,000 per year left the state in much larger numbers than they arrived. People making more than $100,000, meanwhile, came and went at roughly the same rates.
“The rich aren’t leaving California, but the poor and the middle class are,” he wrote.
Kolko also found that effect was most pronounced in areas with the highest housing prices, like San Diego.