Population up slightly amid lack of housing

The California Department of Finance reports that California's population has continued a decline and that all but three coastal counties lost residents in 2021.

One of those counties that actually gained population is Santa Cruz County.

But before you start calling in the growth control police to investigate how this could be with median housing prices soaring past $1.4 million in many areas of the county, these figures deserve a deeper look.

California's population dipped by 117,552 residents last year, a 0.3% decline, bringing the state's total to 39,185,605 as of Jan. 1, 2022, according to a report released this month by the Department of Finance. It was the second consecutive year the state lost population, a trend the DOF says is the result of a slowdown in births and immigration coupled with an increase in deaths (COVID-19) and people leaving the state.

The three counties that gained population were San Luis Obispo, Santa Barbara and Santa Cruz — all of which welcomed back university students during the year, said the DOF.

According to the DOF, the city of Santa Cruz was the fastest growing city in the state, up by 11.3% to 64,075 residents — an increase of 6,481 people. As noted, this could be UC Santa Cruz students, as the county's overall population according to the DOF is 266,564, an increase of only 11 people from Jan. 1, 2021. The other incorporated cities in the county — Capitola, Scotts Valley and Watsonville — all showed declines of about 3% year over year, as did the unincorporated areas of the county, down 3.2% to 129,977 as of Jan. 1, 2022.

But, it's surprising Santa Cruz County didn't show a major decline in population, considering the price and lack of housing. There are still a lot of people — hello, Silicon Valley — who are bringing suitcases full of cash to drive up housing prices in Santa Cruz County, driving working people and young families out.

Which make a new proposal by Democratic State Senate Leader Toni Atkins intriguing. Atkins is proposing the state spend $10 billion to help low- and middle-income households buy homes in California by providing interest-free loans for up to 30% of the purchase price. Backers of this proposal hope to see it included in the next state budget due by June 15. If adopted, it could help 8,000 families a year. The program would be limited in scope to cover only about 2% of home sales to avoid pushing prices higher.

The proposal calls for the state government to share in any appreciation in the value of houses it helps purchase when they are sold and then invest those proceeds back into the fund. Participation would be limited to households making 150% of the median income in an area. The U.S. Census Bureau estimates the median household income in Santa Cruz County in 2020 was about $90,000 a year, which means under the proposal households earning up to $135,000 annually could qualify for assistance.

While we're supportive of using a projected state budget surplus of $68 billion to help families purchase housing, proponents of the assistance program acknowledged in a news report that helping with down payments wouldn't come close to completely addressing California's high housing prices. The problem, they say, is this is a supply side issue, and they're offering a demand-side solution.

Consider, that even with the state Department of Housing and Community Development putting pressure on local governments to accommodate more housing construction, California continues to lag, still far short of the 180,000 units the state says are needed each year, particularly in multi-family rental housing for lowerand moderate-income families.

Santa Cruz County also finds itself in this quandary, with the Association of Monterey

Bay Area governments saying that nearly 13,000 new housing units must be produced by 2031 to meet state goals.

While those figures seem implausible, there has been some progress in the cities of Santa Cruz and Watsonville in approving affordable rental housing projects. And the new mortgage assistance proposal could help some struggling families stay here rather than heading east in search of cheaper solutions.