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San Francisco’s Pandemic Exodus May Be Over, New Analysis Finds

Written by Noah BaustinPublished Aug. 03, 2022 • 6:30am

English

People moved away from major cities in droves during the first months of the pandemic, and no large urban area emptied out more than San Francisco. Previous reports documented SF’s population plummet, but a new analysis from The Standard shows that the mass migration out of the city peaked during the summer of 2020 and appears to have returned to pre-pandemic levels.

The Standard examined the latest information available on the city’s population changes and found that in addition to Americans packing their bags to move elsewhere, a severe cut back of immigration from overseas played a crucial role in further suppressing the city’s population rebound. The findings provide a new window into understanding how the city has been reshaped in recent years, and what the future may hold in store for San Francisco.

New Insight from Postal Service Data

The U.S. Postal Service (USPS) publishes information about how many people changed their mailing addresses into and out of every zip code in the country. The Standard compared the total number of permanent change of address notices leaving San Francisco’s zip codes to that of those moving to the city. The difference between those numbers is one means of estimating the net result of migration in and out of the city.

In August 2020, nearly 7,000 more people moved out of the city than moved in, the USPS data shows. July, August and September logged the highest number of departures from SF: Nearly 20,000 people left during those three months alone. 

The net change of address out of San Francisco steadily dropped throughout the rest of 2020 and early 2021. In June 2022, the rate of net moves away from the city came in shy of 1,400, a quarter of the rate the city saw in June 2020.

Of course, the USPS data does not capture everyone who moved into or out of San Francisco in recent years; many people presumably did not submit formal requests to change their address with the Postal Service. But this analysis provides a more precise view of what happened during the first year of the Covid pandemic. The leveling off of changes of address seen in 2022 is an indicator that the Covid-era mass migration out of San Francisco is tapering off. 

State Population Estimates for 2022

When the U.S. Census published its first estimates of population changes during the pandemic, San Francisco made headlines: The city logged the highest population decrease of any major U.S. city, with a drop of 6%, or nearly 55,000 people, from July 2020 to June 2021. Further analysis showed that young adults aged 20-34 accounted for two-thirds of the people who left the city at that time. These estimates align with the USPS data, which point to the second half of 2020 and the beginning of 2021 as time periods with significant migration out of San Francisco. 

The California Department of Finance’s Demographic Research Unit (DRU) is the official source of demographic data for state planning and budgeting. The DRU’s latest estimates show that, indeed, a dramatic 40,000-person contraction in SF’s population took place during the 2020 calendar year. But its data also show that population declines eased throughout 2021. The newest population estimates from January 2022 show that San Francisco’s population dropped by 6,700 during the prior 12 months—far less than the 40,000 decline of 2020.

In the decades before Covid, San Francisco had not seen a population dip since the mid 2000s. In 2006, the city began over a decade of growth, with the rate of increase peaking in 2013, when the population swelled by nearly 15,000 people in a single year.

San Francisco’s growth slowed throughout the 2010s, mirroring trends throughout the Bay Area, as more people chose to relocate to California’s inland counties, said Phuong Nguyen, a demographic researcher with the DRU. San Francisco’s population expanded by less than 2,900 people between January 2019 and January 2020.

And though a new report showed “San Francisco” (actually the combined San Francisco, San Jose and Oakland metro areas) as the market with the most Redfin users shopping for homes in a different city, the real estate company’s historical data shows that the portion of Bay Area home shoppers looking to relocate has stayed relatively steady for years, hovering around 20% to 25%.

While the recent data show a slowing outmigration of people in 2022, it isn’t clear whether that will decelerate the flow of wealth out of the city. 

IRS data shows that nearly $7 billion in income left San Francisco during the first year of the pandemic. The loss accelerated a trend that began in 2016-17, well before Covid. The trend could indicate a disproportionate number of wealthier San Franciscans are moving out of town.

The Impact of Reduced Immigration

While drivers of outmigration, including the city’s dependence on industries with a high potential for remote work and some peoples’ concerns about the high cost of living and crime, have led the conversation, there’s another significant factor contributing to San Francisco’s population loss: Federal policies that reduced immigration to the U.S.

California has a high rate of international migration and many people arrive in San Francisco first before moving on to other California counties or other U.S. states, explains DRU’s Nguyen.

During the pandemic, the federal government curbed immigration visas and immigration into San Francisco plummeted. Net immigration into the city was about 4,700 people between July 2018 and July 2019. That figure barely topped 800 people from July 2020 to July 2021.

San Francisco has seen a net domestic migration out of the city for every year in the past decade, with the exception of 2012, data from the DRU shows. But up until 2019, the number of people immigrating into the city from abroad more than made up for the domestic losses, sustaining the city’s steady growth before the pandemic.

As international arrivals to the city declined, migration out intensified. Net migration out of San Francisco to other U.S. areas topped 17,500 people from July 2020 to July 2021, nearly triple the previous year’s total, the DRU data shows. San Francisco’s pandemic-era population loss aligned with a national trend of people migrating out of major cities during Covid, spurred by the increases in work-from-home and more affordable living expenses outside of urban centers.

The Outlook for San Francisco

The San Francisco Controller’s Office doesn’t have any additional data to shed light on the city’s population changes. Asim Khan, Senior Economist from the Office of Economic Analysis, pointed out that the January 2022 state estimates showing a slowdown in the city’s population decline could signal that outmigration may be leveling off, but it’s too soon to say.

Khan explained in an email that as the housing market equilibrates—meaning that cheaper areas become more expensive and expensive regions become less pricey—the trend in San Francisco’s outmigration may slow down or stabilize. 

The city’s Planning Department is optimistic for the long term. Program Manager Joshua Switzky projects that the city will regain the population and jobs lost during the pandemic and will return to net growth. “At this point, none of the adopted long-term (i.e. 25-30 year) forecasts for regional growth have fundamentally changed as a result of the pandemic,” Switzky wrote in an email.  

DRU’s Nguyen hopes that San Francisco will return to the slow and steady growth rates of the pre-pandemic years, adding a caveat: “It all depends on if we have enough international migration in.” 

Matt Smith contributed research to this story.

English

Noah Baustin can be reached at [email protected]


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