The Future of San Diego: Economists Weigh in on Continued Population Outflow

In an article by Phillip Molnar, published on March 29, 2024, a significant demographic shift in San Diego County was highlighted, revealing a stark exodus of nearly 31,000 people between July 2022 and July 2023. This figure, as reported by the U.S. Census Bureau, marks one of the most substantial population declines in the region in nearly three decades, second only to the first year of the pandemic when the net outflow surpassed 33,000.

The core issue driving this mass departure, as identified by experts and locals alike, centers on the soaring cost of housing. This concern has prompted a vigorous debate among economists and industry professionals regarding the future of San Diego’s demographic trends.

Economists like David Ely of San Diego State University and Alan Gin of the University of San Diego speculate that while the net migration might continue to be negative, the volume of people leaving could decrease. Factors contributing to this include a slight easing in rental rates, the significant relocation of remote workers already having taken place, and a general decline in job quits across the U.S., indicating a hesitancy to leave current employment.

Conversely, a majority, including Ray Major from SANDAG, Caroline Freund from UC San Diego School of Global Policy and Strategy, and Kelly Cunningham of the San Diego Institute for Economic Research, anticipate the continuation, if not acceleration, of this exodus. The unaffordability of the San Diego region, coupled with a slowing job market, increasing living costs, and a lack of affordable housing, are expected to keep pushing residents to seek more economically viable locales.

Notably, Norm Miller of the University of San Diego, James Hamilton of UC San Diego, and executives like Haney Hong of the San Diego County Taxpayers Association and Bob Rauch of R.A. Rauch & Associates voice concerns over the broader implications of this trend. They point to increasing income inequality, the strain on local businesses and tax revenues, and the impact of regulations and high taxes as exacerbating factors.

Proposals to mitigate these challenges include streamlining building regulations, taxing property more equitably to expand the housing supply, and adopting more pro-business and housing approval policies. Despite these suggestions, the consensus remains that without significant policy changes, San Diego might continue to witness a decline in its population, driven predominantly by the prohibitive cost of living.

In conclusion, the article captures a critical juncture for San Diego County, reflecting broader issues of affordability and livability that could determine its demographic and economic future.