Interior Growth Increasing, Coastal Growth Tanking in California

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A major shift took place in California’s population growth --- which has fallen below the national average --- over the past eight years. The latest Census Bureau population estimates (for July 1, 2018) show that growth has stalled in the coastal metropolitan areas. At the same time annual population growth rates have trended upward in the nearby interior areas. This article reports on these trends, dividing the state into three regions for analysis. The regions are as shown in Figure 1: “Growth Analysis Regions.” The 2018 regional populations are in Figure 2.

Coastal Metropolitan counties are from Sonoma County in the San Francisco Bay Area (Note) to San Diego County in the south. It also includes all of the adjacent inland counties of the San Francisco Bay area. South of the Bay area, the coastal metropolitan region includes only counties along the Pacific Coast, because counties are far larger in the South. Population growth rates in the Coastal Metropolitan counties had been dominant from the first post-World War II census (1950) to 2000, capturing nearly 70 percent of new California residents. Since the beginning of the millennium, they now account for less than one-half of state growth. This reflects the problems associated with an extraordinarily high cost of living, ranking within the costliest seven percent of US metropolitan areas, according to the Bureau of Economic Analysis Regional Price Parities. This is driven by the severely unaffordable housing in these counties.

Interior counties include the “Inland Empire” (Riverside and San Bernardino counties), the San Joaquin Valley, stretching from Kern County (Bakersfield metropolitan area) to the Sacramento area and then the Sacramento Valley, which stretches northward to Shasta County (Redding metropolitan area). The interior counties had grown strongly between 1950 and 2000, but due to their comparatively small population base, they only accounted for less than 30 percent of statewide growth. After 2000, however, these counties have experienced more than one-half of numeric state growth and added more residents than the Coastal Metropolitan counties. All but two of the Interior metropolitan areas has a cost of living below the national average (Bakersfield, Chico, Fresno, Hanford, Madera, Merced, Modesto, Stockton, Visalia and Yuba City). Sacramento is slightly more expensive than average, while Riverside-San Bernardino is as expensive as the least expensive areas in the Coastal Metropolitan counties.

The Rest of the State includes all counties outside the Coastal Metropolitan region and the interior. The Rest of the State includes places many consider to be among the best places to live in the nation, such as the North Coast, the Sierra foothills, much of the most scenic mountain areas of the state, as well as Imperial County, in the southeastern corner of the state. These relatively remote, more rural counties have generally accounted for little of the state’s population growth.

Coastal Metropolitan counties: From 2010 to 2015, the Coastal Metropolitan counties grew strongly, with annual population growth rates ranging between 0.81 percent and 0.94 percent (Figure 3). In 2013 and 2014, the Coastal Metropolitan counties grew at a faster rate than the Interior counties. This was driven principally by strong growth in the San Francisco Bay Area. But since 2015, population growth rates have plummeted. Between 2017 and 2018, the annual growth rate in the Coastal Metropolitan counties was 0.13 percent, less than one-seventh the rate achieved in 2012 and 2013.

Migration: Between 2010 and 2018, the Coastal Metropolitan counties lost 800,000 residents (net) to other counties, both in California and in other states. This is nearly as many people as live in the city of San Francisco (Figure 4). In 2012, the Los Angeles metropolitan area suffered a net domestic migration losses of less than 40,000. By 2018, the figure was nearing a loss of 120,000. There has also been deterioration in the San Francisco Bay Area, which had modest gains in the early years, but by 2018 lost 55,000 net domestic migrants. The San Diego metropolitan area, with negligible domestic migration losses early in the decade, lost more than 10,000 in 2018.

The Coastal Metropolitan counties gained 910,000 net international migrants, more than compensating for their loss of residents to other parts of the nation (Figure 4).

Interior counties: The Interior counties continued their strong growth into the 2010s, ranging from 0.72 percent to 0.98 percent annually between 2010 and 2015. Since that time, the Interior growth rate has been 1.00 percent or greater through 2018 (Figure 3). The Interior has grown faster than the Coast Metropolitan counties in six of eight years. After having trailed in 2013, the Interior grew nearly eight times the rate of the Coastal Metropolitan counties in 2018.

By 2018, the total population of the Interior counties was approaching that of the Los Angeles metropolitan area and half-again as large as the San Francisco Bay area. The Interior’s largest metropolitan area, Riverside-San Bernardino, virtually all suburban, should reach 5,000,000 residents by the mid-2020s. Now the 13th largest metropolitan area in the nation, Riverside-San Bernardino is likely to soon overtake the Boston metropolitan area. The Interior is also home to the Sacramento metropolitan area, with 2.3 million residents, the 26th largest in the nation. Fresno is also likely to exceed 1,000,000 residents by the 2020 Census.

Finally, an often forgotten part of the state, the Sacramento Valley (which for this analysis excludes the Sacramento metropolitan area counties) has seen its population growth rate increase nearly two-thirds in 2014-2018 compared to the previous four years. The Sacramento Valley has long accounted for little of the states’ growth, but is similar in many ways to the much faster growing San Joaquin Valley to the south. Perhaps the Sacramento Valley is being discovered by residents fleeing the San Francisco Bay Area, with its high cost of living.

Migration: Between 2010 and 2018, the Interior counties gained more than 100,000 net domestic migrants. International migration was greater, at 130,000 (Figure 4)

The Rest of the State: What distinguishes this area from the Coastal Metropolitan and Interior counties is their much slower growth rates (Figure 3). Since 1950, these counties have taken less than two percent of state growth. Even so, growth in the rest of the state has been at a higher rate than the Coastal Metropolitan Counties over the past two years.

Migration: Between 2010 and 2018, the counties in the Rest of the State lost 21,000 net domestic migrants, but gained 4,000 net international migrants (Figure 4).

Prospects for Growth?

The huge drops in Coastal Metropolitan county growth rates have taken their toll on the state growth rate. In the first five years of the decade, California grew marginally more than the nation. But in the last three years, California has lagged, with a growth rate of 0.40 percent in 2018, more than a third below the national rate of 0.62 percent.

In the 2000s, the Interior counties had become dominant in California’s growth, supplanting the domination of growth by the Coastal Metropolitan counties over the entire Post-War period. After a brief resurgence of growth in the Coastal Metropolitan counties, the locus of growth is now firmly in the interior counties. The high cost of living in the Coastal Metropolitan counties seem likely to remain a significant brake on population growth. As California continues to shed people and businesses to the rest of the nation, the big question will be whether the Interior counties, with their much lower cost of living will be able to continue their strong growth.

Note: The San Francisco Bay region (for the purposes of this analysis) is defined as all counties in the San Francisco combined statistical area, except those in the San Joaquin Valley (San Joaquin, Stanislaus and Merced counties). The San Francisco Bay region is composed of the following metropolitan areas: Napa, San Francisco, San Jose, Santa Rosa, Vallejo and Santa Cruz).

Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed by Mayor Tom Bradley to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. Speaker of the House of Representatives appointed him to the Amtrak Reform Council. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

Photograph: Map: California Growth Analysis Regions (created with