Will people continue to move away from San Diego County?

Nearly 31,000 more people left San Diego County than moved here between July of 2022 and July of 2023, the U.S. Census Bureau recently reported.

With the exception of the first year of the pandemic, when the net outflow exceeded 33,000, that volume of people exiting the county hasn’t been seen in nearly three decades.

Most experts, and people interviewed for the Union-Tribune’s article, said housing costs were the biggest reason for the exodus.

The departures were much higher than early estimates and it was unclear if it was an exceptionally bad year or the acceleration of a trend.

Q: Will San Diego County see similarly high volumes of people moving out next year?

Economists

David Ely, San Diego State University

NO: Housing affordability will continue to cause many San Diegans to move to less expensive areas. Net migration will likely be negative over the next year but at a lower volume. Rental rates appear to have eased and many employees who shifted to remote work and wanted to move have already relocated. Also, the number of job quits in the U.S. is declining, suggesting that workers are more hesitant to leave their current jobs.

Ray Major, SANDAG

YES: The San Diego region is one of the most unaffordable places to live in the nation. A slowing job market, lack of affordable housing, and increasing costs such as utilities, food, gas and other expenses will force San Diegans to move out of the region to afford their basic needs. This trend is likely to continue until significant changes are made to some of the fundamentals associated with the region’s cost of living.

Caroline Freund, UC San Diego School of Global Policy and Strategy

YES: High and rising housing costs are driving folks away. The most common concern that I hear from people considering moving to or from San Diego is the high cost of living here. Streamlining building regulations and taxing property more equitably would help expand the housing supply, lower prices and stem the outflow of people.

Kelly Cunningham, San Diego Institute for Economic Research

YES: Unfortunately, as more productive people and businesses leave San Diego because of unaffordable housing, excessive taxes and out-of-balance living expenses, out-migration will continue. The movement of younger residents especially, including children, will compound as prohibitive costs of living make it difficult to become established and compel many to move away despite appealing weather and desirability of living in Southern California. Shrinking birth rates and foreign migration are not enough to offset the out-migration of residents.

Lynn Reaser, economist

YES: Housing costs remain the biggest constraint. The median home price exceeds $800,000 and rents average $2,400. Both foreigners and domestic residents may be finding San Diego less appealing. Older people are opting to retire in lower-cost areas near family, while lower- and middle-income residents of all ages are seeking cheaper locations. A stagnant population will be bad for San Diego, impacting both local businesses and tax revenues.

Alan Gin, University of San Diego

NO: But some out-migration will continue. The high cost of housing is just too much for many people. Those who are not homeowners and who are allowed by their employers to work remotely are the prime candidates to leave, and many have already done so. The pace may slow because those who remain may have less of an option to work remotely. But housing prices continue to surge, even with out-migration, with San Diego again leading the nation in housing price appreciation at the start of the year.

Norm Miller, University of San Diego

YES: Real estate price appreciation and rental growth will slow significantly over the next several years, compared to the past decade, as a result of net population losses, and the addition of some large-scale developments on sites like NAVWAR, Seaport Village and the Sports Arena district. Whether rents drop enough to allow adult children to leave the nest remains to be seen, but there is a lot of pent-up demand from doubled up households. Higher taxes here won’t help reverse these trends.

James Hamilton, UC San Diego

YES: It’s not just San Diego. Out-migration is now a clear trend for Los Angeles and Orange County. Every year California adds new regulations that drive businesses away and force those that remain to charge higher prices. On average, the consumer price index for San Diego has risen a half a percent faster than the rest of the nation every year for the last decade. I see no indication that California’s leaders are about to change that.

Executives

Haney Hong, San Diego County Taxpayers Association 

YES: Maybe our policymakers should wake up and realize the smorgasbord of policies put in place over the last generation have led to this. People are voting with their feet, and this is the hollowing out of the middle class that puts us on track to maintain our high Gini coefficient — income inequality. Until we have real policy change, folks are gonna go, and this vicious cycle will only continue.

Phil Blair, Manpower

YES: Nothing has changed. I am in Las Vegas and just spoke to a young entrepreneur from Buenos Aires now living in Nashville. When I suggested he consider San Diego, he quickly responded its taxes are too high, it is too expensive to live there, too far away from the central part of the nation. We will not be overcoming any of these negatives in the near future.

Gary London, London Moeder Advisors

YES: This is now a trend owed to the cost and scarcity of housing suitable for young families of moderate income, including front-line workers, public agents and young professionals. This is the core of our population that sustains a healthy regional economy. To see what negative growth looks like, visit Detroit. Then pick which problem you would like to have: managing a growing or a declining economy. For me the answer is easy.

Bob Rauch, R.A. Rauch & Associates

YES: The combination of high housing costs and interest rates, significantly increased homelessness, deteriorating infrastructure and changing politics has moved people to other states. We are now paying for migrants who came here illegally and are getting food, housing and health care paid for by our taxes. Other factors that send our residents outbound include increased regulations, high taxes and more traffic than neighboring states. We need to become more pro-business and approve more housing.

Austin Neudecker, Weave Growth

YES: The high cost of housing remains the primary reason for the net exodus from San Diego. Median home prices are more than six times the median household income, making it increasingly difficult for people to afford to live here. While development has increased, construction takes time. We’ll likely continue seeing high numbers of people moving out next year.

Chris Van Gorder, Scripps Health

YES: Sadly, I think it could increase. A lot of work is going into bringing down housing costs and rents have improved slightly, but this does not happen overnight. The cost of housing is the reason most frequently cited by those who have left, but it’s not the only one. San Diego is the eighth most expensive city in the nation. Until we can get that under control, people will continue to leave.

Jamie Moraga, Franklin Revere

YES: San Diego is driving people out with its lack of affordable housing, rising utility and gas prices, cumbersome regulations and policies, high taxes, increased density and unfriendly business environment. There seems to be a new tax (or taxes) on the ballot every year. It just doesn’t stop. Residents are tired of feeling the pinch and the “sunshine tax” isn’t worth the stress and financial hardship. It isn’t surprising that residents are leaving for other states that offer a better cost of living and quality of life.

Have an idea for an Econometer question? Email me at [email protected]. Follow me on Threads: @phillip020