60 Million Californians? Maybe Not

Despite estimates that the state of California's population will grow to 60 million by 2050, Wendell Cox argues that growth in the state is slowing.

"The California Department of Finance issued a projection that the state population will grow from 36.5 million in 2006 to 60 million in 2050. Los Angeles County is projected to grow from just under 10 million to 13 million, while San Diego County, just under 3 million today, is projected to reach 4.5 million."

"Frankly, there is good reason to doubt that will happen. What seems to be escaping everyone in California is that fundamental and very recent migration changes do not auger well for population growth, especially in the state's more established areas."

"Despite this inland growth, California suffered a net outward domestic migration of more than 900,000 people during 2000-06."

"What is going on? Try housing affordability. In the three large coastal metropolitan areas, median home prices have exploded to more than 10 times median household incomes. Historically, this "median multiple" has been 3.0 or less and remains so in many parts of the United States. People have moved inland to take advantage of lower housing costs. But now housing costs are escalating substantially inland and, not surprisingly, growth has slowed."

Full Story: California Focus: 60 million Californians? Don't bet on it

Comments

Comments

Wendell Cox Focus: Pro-Planning Advocate?

Don't bet on it.

Please don't listen to his libertarian dribble, unless you buy into his (and Joel Kotkin's) anti-California diatribes...

Notice this article was strategically posted in the "Orange County Register". It wouldn't make it past the junior editor's desk in more main stream publications such as the San Francisco Chronicle or Sacramento Bee.

Projections Not Agenda

In Los Angeles County, growth has dropped by 90 percent from the 2000-05 rate. The early 2000s growth rate of Los Angeles County would have put it at a population of more than 10.5 million by the 2010 Census. At the 2005-06 growth rate, it won't reach 10.5 million by 2050.

Is that "libertarian dribble?" Sounds like demographic analysis to me. Sure Cox conflates "domestic migration" with "net migration" to his unfair advantage but he is on solid ground vice any projections of 60m by 2050. This last reads very much like the projections that claimed NYC would be several feet deep in manure by 1920.

I checked American

I checked American Factfinder, and posted a response to the article in the OC - I should have checked the comments here first
The domestic migration figure quoted ignores the 27% foreign born population (up from 22% in 2000) and the fact that the actual population grew from ~33 million to ~36 million, a 7% increase between 2000 and 2006. Running this increase forward gets to 60 million in ~2050

However:
The chances of nothing changing this rate of increase in 43 years is just as spurious as the arguments used to attack it.

Wendell's number massaging.

The domestic migration figure [Wendell Cox] quoted ignores the...fact that the actual population grew from ~33 million to ~36 million...

Good catch MTOD.

Sheesh. How many times have I cautioned others not to believe facts presented by ideologues in their arguments, yet here I go falling for Wendell's hooey. Shame on me.

CA's human population growth was 7.6% from 2000-2006. And the human population under 18 years is increasing, too.

Nonetheless, CA's human population is straining the ecosystem's ability to provide services, and IMHO 60 million in CA will be a problem.

Best,

D

No Planning Advocate

Please don't listen to his libertarian [drivel], unless you buy into his (and Joel Kotkin's) anti-California diatribes...

Perhaps largely true, but I can't quibble with his argumentation on population growth rate change. I'm an outmigration statistic myself - I left CA in early 2000s because of the number of people, the housing prices, and the air pollution (in Sacto.).

Nonetheless, I do have many issues with the facile, standard "the low supply 'cause of th' gummint regalayshun" argument that had to be injected into the piece. There is more to housing prices than just supply.

Best,

D

Developers

You don't have to believe Wendall, just go actually talk to some housing developers (they don't bite). they're the folks who actually have to produce housing for a living so they're quite knowlegdable in that area. Unfortunately, when you do actually talk to them, you'll find out that a major reason housing prices are so high in CA is government regulation and bureacratic red tape. These facts of life have made financially impossible to produce middle class housing in the more epensive areas of CA. Sad but true. Of course, nothing is perfectly black and white as demand is the other factor in price.

I just find it odd that people can't accept the fact that the type of things Wendall raises do actually raise housing prices (maybe it's the way he says them). However, life's all about tradeoffs and increased prices are part of the tradeoff for excessive regulation and development delays. The real question is whether or not the public and private benefits of those regulations and processes outweight the costs of higher housing prices. The next question is who has to bear the costs. I for one think not, and others will disagree, but at least we have to be honest about what's being debated.

Developers and Advocates.

However, life's all about tradeoffs and increased prices are part of the tradeoff for excessive regulation and development delays.

This is the facile argumentation I'm talking about in my pvs comment. It is well-known (and written about) that there are multiple reasons why housing prices increase in certain areas. Look at the amenities in CA; agents bid up rents to acquire these amenities - amenities lacking in flyover states. Equilibrium rents respond to many more things than supply (esp. supply constrained by th' regalayshun).

For example: paving over protected steep hillsides in the Bay Area and installing an endless sea of roofs - replacing the golden hills - will certainly lower Ricardian rent as agents will Tiebout sort elsewhere to look at greenery out their window instead of the sea of roofs. Maybe that's what some want, as they think supply will lower prices, but they won't get it, so the solution is a non-starter (but the complaining is a non-ender). Simply: 60M in California? What a cr**py place that would be.

Secondly, oftentimes th' regalayshuns are demanded by homeowners to preserve their home values - Edward Glaeser states this explicitly in his work on cities in American New England.

In short, these processes are normal human behaviors. Folks who can pay for the amenities will bid up rents to make sure others can't get them. Maybe some think that 50M in California is OK or a right or whatever, but far more think that's too many. And if home seekers in CA have to go somewhere else to live, so be it. That's how society works, like it or not. Reminds me of the bumper sticker in CA in the 80s: "Welcome to California. Now go home."

Welcome to reality.

Lastly, I talk to developers practically every day. Every developer, in every city on the planet complains about red tape. It's their job.

Best,

D

Housing prices also affected by service demands

One thing we are forgetting about in this conversation is the infamous Prop 13. In a very simplistic model, people don't want to pay taxes, but they want services. So the cities force the developers to provide the services, but the developer passes the buck along to the home buyer, thus raising the price of housing. Like the previous post said, there is a larger debate about what services people should come to expect from government, and how they are going to paid for that is part of this debate.

Service demands and taxation.

the infamous Prop 13...

Excellent point that I tend to forget due to my outmigration.

The paypul, see, voted in Prop 13, which has reduced the amount of res land and instead privileged the automalls and cr**py retail centers (sorry - centres) that line I-80 from Vallejo to Stateline. Why do they line I-80? Cities need revenue for service demand and sales tax'll do 'er.

Best,

D

Facile Argumentation

There are two things that determine price: supply and demand (I guess two reasons count as "multiple reasons"). Demand for CA amenities, as demonstrated by your emigration story and Wendall Cox's data on domestic migration, is not infinite. As such, supply is going to affect housing prices... supply affects prices, who'd a thunk it? Welcome back to reality.

10% housing affordability is not "sustainable" (a term many folks around here are fond of), and supply is a big part of the affordability problem. The solution is definitely not you straw-man (paving over the golden hill with an endless sea of roofs... very poetic) as if that's the only allolowable answer. Things like streamlining the permitting and entitlement process for conforming uses would help dramatically... There's a middle ground between the current process, which is broken for the middle class, and paving over everything.

Your second assumption, that people will bid up prices to make sure others can't afford homes is true, but only if you also assume supply will remain perfectly static (which is true to a limited extent in certain parts of CA...and is manifesting itself in home prices). Otherwise, unless those folks who can pay have an unlimited supply of cash (which is impossible, so they usually just resort to using their influence to enact more regulations... shown by Glaeser) folks will build to meet demand, the ultimate price dpending upon the intersection of the two.

It's a very simple concept actually...it's a dynamic world out there and your personal views on whether CA would be a horrible place to live with 60M folks don't outweigh the thoughts of those 60M people, they can choose for themselves.

Another confusing Kotkin-Cox-O'Toole diatribe

At the same time, areas with more liberal (yet environmentally sustainable) regulation have managed to preserve housing affordability. Median home prices are about $150,000 in Dallas-Fort Worth and Houston and $175,000 in Atlanta. There are similar, even lower, prices in many other areas.

I'm not sure if those places exactly qualify as environmentally sustainable. Atlanta suffers from pretty bad air quality, and Houston and Dallas would be in terrible condition if they were surrounded by mountains the way LA is.

Also even the first OC Register comment to this article sees the flaw in these numbers:

"Domestic migrants are people moving from one county to another. The term EXCLUDES the excess of births over deaths and IMMIGRATION. This story is based on the fact that more people are leaving California than arriving. If you ignore immigrants. You cant ignore immigration as California is one of the largest destinations. Yes housing is expensive but worrying that the state is shrinking from it is just nonsense. From the census estimates CA growth rate 2000 to 2006 is 7 percent CA foreign born residents 2005 is 27 percent. -MountainTod- "

Finally what confuses me about the Kotkin-Cox-O'Toole diatribes is that they complain about unaffordability and its negative effect on the middle and lower class, which I agree is a problem. But then insist on market based solutions. Well if these places they detest are soooo bad, and the planners so despised, why do people keep buying places there?

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