We never quite settled the issue of the dualing statistical bureaus and their respective takes on San Diego population growth. The U.S. Census Bureau, as you may recall, indicated that San Diego County was experiencing negative net migration, meaning that more people were moving out of the county than moving in, to such an extent that population growth had actually gone negative in 2005. The California Department of Finance, meanwhile, reckoned that both net migration and population growth were positive.
So why the big difference, and more importantly, who was right?
Simple demand (everybody
Simple demand (everybody wants to own a home here) vs. effective demand (only some of them can afford it). Pricing is driven by economic demand relative to the supply.
We’ve talked about this before. I still think the raw population numbers are all-but-meaningless as far as pricing goes. The 40% or more of the population who are in the lower economic categories aren’t the people who are driving the market. They participate in the rental market and they comprise the bulk of the demand for rental properties and rents, but they aren’t participating in the purchase market.
In an economic (NOT political) context, the different basis of these conflicting statistics can be argued to have economic implications. When the number of driver licenses increase but the number of taxpayers decrease, I think that very much speaks to the stability of the current price structure.
I know from talking with
I know from talking with many people, and with Bob Casagrand, that many people are leaving San Diego, cashing out and moving to cheaper places, or just tired of the high cost of living here. Employers are having a hard time filling vacancies, as it’s hard to recruit people to move here.
Now, if the people leaving are replaced by illegal aliens, then the Motor Vehicle Dept. would still show a net increase. But so what? How does that net surplus help our economy; i.e. are we replacing white collar workers who are leaving with illegals doing construction and landscaping?
If the Motor Vehicle Dept method were superior to the tax return method, then why doesn’t the US Census Bureau use it? The Census Bureau is interested in accuracy, while the Finance Dept is interested in showing increasing population so they can show CA is growing, so they can ask for more federal matching dollars for highways and schools, etc. The Finance Dept. has every reason to be biased on the side of increasing population. The US Census Bureau has nothing to gain by bias, while the Finance Dept has a lot to gain. I am getting more suspect about the accuracy of Motor Vehicle as I type… even MLS listings have a 30% vacancy rate. The truth is, people are leaving Southern California in droves. So we need to ask ourselves whose data is more common sense.
Could somebody explain how the Dept of Motor Vehicle records can be used to determine migration? If we have 40,000 people per year leaving, how would that show up in motor vehicle records; what method is used? How would they know if a Californian leaves? It’s not like people notify the Dept of Motor Vehicles that they are moving. Are they basically just counting the number of new driver license applications, or do they track the number of people who don’t renew their vehicle registration because they moved? Depending on how they do this, determines how reliable their conclusion is.
Last, the spin from Moeder and London is just enough to make me question once again if we will ever have a hope of a common sense economist in our city. From the story:
“Nathan Moeder, also pointed out in an email that positive trends in job growth, office space absorption, and the like provide further evidence that the population is not, in fact, shrinking.” I completely disagree. As more people leave San Diego, it is harder to fill jobs, so of course the unemployment rate goes down! Office space vacancy is actually rising, as I read in a U-T story last week. What is “..and the like”? More spin? I think I would put Moeder in the category of spin meister for the local economy.
Oh, and I should put London in the spin meister category. He writes, “It is incorrect to state that more people are leaving San Diego than moving here while all of the other data suggests just the opposite, particularly when we know that San Diego is among the healthiest regional economies in the United States.” What healty economy? Oh, the one dependent on housing and lending, where less than 10% of the people can afford to buy a median priced house? The economy where people are using debt and home equity to buy stuff made by foreigners, because they can’t afford to pay for it from wages or savings? I guess London’s definition of healthy is a lot more liberal than mine. With so much spin, how can anyone take these guys seriously?
I’m going to use the Census data. Neither London, Moeser, nor CA Finance have given me any reason to accept their spin.
Hotel California:
“You can
Hotel California:
“You can check out any time you want, but you can never leave”.
Seems to me that the DMV methodology is deeply flawed. They register those who are checking in, but not those who are leaving.
Their assumption is that nobody is leaving. Duh.
DMV method would seem to be
DMV method would seem to be a lagging indicator. You’d have to wait until the registration has been unpaid for some number of months before declaring a loss.
Here’s my understanding of
Here’s my understanding of how it works: When a person with a California driver’s license moves to another state and applies for a driver’s license in the new state, he has to surrender his California driver’s license. The new state’s DMV is supposed to send that person’s surrendered California driver’s license back to a central place in the California DMV.
I sure would like a
I sure would like a definitive answer to how the Motor Vehicle Department records its population. We’re just guessing here… Do all states return the surrendered drivers licenses? What if they don’t? If they do, does the DMV record it as one person who left the state? Or is it like the homebuilder sales data, where you record only sales but not cancellations, i.e. the DMV reports new driver licenses but does not subtract the surrendered ones?
“Surrendered driver
“Surrendered driver license”? When I moved to Eastern WA from California a few years ago, the Dept of Licensing there simply punched a hole in my CA license and returned it to me. When I moved back to San Diego, the DMV still had my license number on record. I am fairly certain that the State of Washington did not inform the state of CA of my move.
For what it’s worth…
Seems to me that both
Seems to me that both methods are flawed. Why side with the Census ? It is dependent on federal tax records that are likely more delayed than driver license registration. You file a return for CA for up to 21 months after moving (e.g. move in Feb, extension until October of the next year). Also, the sampled census survey is likely less valuable than hard evidence (license registrations, tax returns, births recorded, etc).
In the absence of evidence, I’d say the best estimate (a.k.a. Expected Value) is probably an average of the two. This would put us at less than 12,000 population growth in 2005 versus ~ 45,000 for 2001-2002.
Since the number of homes produced by builders is likely much more than needed for the anemic growth of pop ~12,000. It is effectively negative relative to the housing stock, therefore fundamentally reducing demand as we have seen by all the other indicators.