Thursday, December 14, 2006

California Dream?

In what may be the start of something yet to be determined, the filling up of the more spacious other western and Midwestern states perhaps.

California, there I went
Thursday, December 14, 2006

FOR THE first time, the number of people moving out of California outnumbered those moving in -- during a supposed economic expansion. It isn't over yet, either -- demographers expect this trend to continue, probably for several years.

The loss isn't a large one. The California Department of Finance recorded a net loss of about 29,000 people from 2004-05, and it expects that the numbers for 2005-06 will be comparable. But it does cut across most ethnic groups -- whites, Latinos and African Americans, with only Asians showing a net gain -- and has hit families particularly hard, if faster-than-predicted school enrollment declines are to be believed.

All this indicates that the state's bugaboos of housing costs and infrastructure may finally be taking a toll on its resilient economy and overall attractiveness as a place to live.

"It's not a sign of this state becoming the next Detroit, but if it is, in fact, a sign of the difficulty of buying a house in California, or congestion -- as we've heard -- then we should be concerned," said Hans Johnson, a demographer with the nonprofit Public Policy Institute of California.

Because the departing tend to have higher incomes than those arriving, it's a concern that's likely to merit attention at high levels, though solutions, unfortunately, are few. Careful analysis, allocation and execution of spending the state's new infrastructure bonds is likely to help. So is a new federal commitment to affordable housing. Neither of those things is a sure bet. And a massive real estate correction would attract new residents, but cause havoc in many sectors of the state economy.