An Urban Exodus? Not So Fast.

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By this point of the pandemic, I think it’s safe to say that most of us are feeling a bit restless. For several counties, including Greater Los Angeles, it has been more than four months of life with some level of quarantine restrictions, and even the homebodies among us are contemplating far-flung adventures away from crowded cities. Writing this from my apartment in West LA, a rather dense and urbanized part of Los Angeles, I know I haven’t been alone in reconsidering the value of some extra square feet, a yard, or simply more distance from my neighbors. 

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There are early hints that the pandemic has changed the way people think about many details of their lives, including how they shop and socialize and potentially about their living spaces and the cities they reside in. At the peak of COVID-19’s spread in New York, The New York Times reported that as much as 5 percent of the city left for the suburbs or vacation homes; most of those leaving were from wealthy neighborhoods, and areas like the Upper East Side and Soho saw their populations decline by 40 percent. Data from Redfin indicates that in April and May, 27 percent of home searchers were looking at homes outside of their metro area, a new high. 

These indicators and many similar ones that have emerged in the last several months raise important questions about the demographic future of our global and national metro areas, including Greater Los Angeles and Southern California. Will people or jobs gravitate toward dense coastal cities? Will the pandemic fundamentally change the perception of urban and suburban areas? Are these indicators reflective of short-term reactions to the pandemic or longer-term shifts in preferences? 

While some polemicists are heralding the “end of the city,” a deep dive into our region’s demography over the past few decades indicates that the trends underpinning Los Angeles and Southern California’s maturing economy are remarkably durable, and, in fact, periods of uncertainty may serve to support the area’s growth.

Southern California is growing, albeit slowly. For the past 15 years, roughly 140,000 net people left the region annually for other places domestically (masking inflows and outflows totaling as much as 800,000), but international immigration and natural growth has balanced-out domestic out-migration. Since 2010, the population of Southern California has grown by 0.6 percent.

The headline story of domestic out-migration and a slow growth rate overall obscures consistent patterns that are likely to continue within and beyond the current COVID-19 context. Movement of Southern California residents to Sun Belt states, for instance, is nothing new, and there is a well-trod path from the region to states like Arizona, Florida and Texas that offer lower-cost living and rapid job growth. The pattern, though, is reversed for residents of the Northeast and the Midwest: In the past decade, 700,000 people have left those states for Southern California.

The region has also consistently been a magnet for talent from across the United States; for individuals in highly skilled occupations, the region’s strong and diversified employment base is a leading attraction. In 2018, more people in management, business, financial, arts and media, science and technology occupations moved to the Los Angeles metropolitan area than any other metropolitan area in the U.S. Across the broader Southern California region, 94,000 of these high-talent individuals moved in, 40 percent more than moved to the Bay Area. 

The region’s migration patterns have been notably consistent for the past decade and a half, even through the nation’s worst economic crisis since World War II. And these trends – in particular the sustained draw of Los Angeles for talent and the nation’s most transformative economic sectors – underpin Southern California’s dynamic economy. 

Economic distress, in general, leads to less mobility, and migration flows into and out of Southern California decreased in the Great Recession. However, in the years following the financial crisis, inflows declined by 17 percent while outflows from Southern California dropped more than twice that amount by 36 percent. That is, while people were moving less across the board, the unique concentration of economic opportunity in the region drew an increased share of those moving to Southern California.

As the pandemic’s effects continue to spread and economic activity slows nationwide, it should be clear that writing off Los Angeles and other cities is premature. Past crises—from the Great Recession to 9/11 and the dot-com bubble and stretching back even further—have served to reinforce the vibrancy of cities with dynamic economic bases. Greater Los Angeles and Southern California’s strong demographic fundamentals and their draw as a desired location for individuals and companies are among the many strengths that promise to buttress the region through the current crisis and beyond. 

Eric Willett is CBRE regional head of research and thought leadership.