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Economic impact of declining populations in North Bay

According to the latest estimates, the North Bay’s population shrank during the pandemic after slowing in previous years. Experts trace the underlying causes to challenges the region’s economy faces in attracting and retaining workers and businesses.

Since April 2020, the region has lost 22,000 residents, or 1.5% of the 1.4 million residents in Sonoma, Solano, Marin, Napa, Mendocino and Lake counties, according to an estimate released earlier this month by the California Department of Treasury.

For decades, the area has grown, but at a slower rate each decade. Analysis of the census data shows a regional growth rate of 4.4% in the 2010s, 5.1% in the 2000s, 14.2% in the 1990s, 25% in the 1980s and 30.5% in the 1970s years.

The Treasury Department uses the county numbers — averaged from birth and death statistics and change-of-address data from driver’s license and tax records — to figure out how government money can be distributed to local areas. Urban population estimates are developed using inventory and occupancy statistics.

Within those death numbers lies a sobering statistic — 1,638 deaths have so far been attributed to COVID-19 across the six North Bay counties.

Marin County suffered the region’s largest proportional population decline since March 2020 and the latest estimate in January 2022, a decrease of 2%, or nearly 5,200 residents, the state estimate shows. It was followed by Mendocino (-1.7%, 1,600), Solano (down 1.4%, 6,200), Sonoma (-1.3%, 6,400), Napa (-1.3%, 1,800) and Lake (-1 .1%, 750).

They joined 34 of California’s 58 counties in population loss. On average, inland counties were up while most coastal counties were down, except for San Luis Obispo, Santa Barbara, and Santa Cruz counties, which the Treasury Department says are attributed to returning college students.

That agency attributed the nationwide decline to aging boomers and declining birth rates among younger generations, in addition to federal immigration policies and an increase in residents leaving the state.

The trend of an aging population could also be behind declines in Napa, Marin and Sonoma counties, according to Sonoma State University economist Robert Eyler, with populations over 250,000.

“This aging phenomenon has been exacerbated by the pandemic,” he said.

Whether this aging trend will continue is in question due to the influx of younger professionals from other parts of the Bay Area during the pandemic, Eyler said. Data on demographic changes in North Bay and Bay Area counties over the past two years is slated for release this summer.

The pandemic public health orders have closed many offices across the state, it has led to a surge in remote work for information-related jobs, and a surge in relocations from the Bay Area’s tech clusters to suburban areas like the North Bay, which also has the major vacation spots in California.

What is known is that Marin, Napa and Sonoma counties have faced high real estate prices and challenges that have attracted high-paying businesses, although Napa County remains heavily reliant on its wine and tourism industries, said Eyler, who regularly analyzes data on behalf of several business development groups in the region.

Here’s how much North Bay home prices have risen.

Average home prices in most of North Bay counties have more than doubled since 2015, up 16.5% to 53.5% since the pandemic began, according to data from the California Association of Realtors. In fact, Marin’s median jumped an unprecedented 31% annually to $2.11 million in April.

“It’s a combination of high-end homes trading at very high prices and a lot of demand from San Francisco,” said Tracy McLaughlin, a top-selling agent at real estate brokerage The Agency.

And some of those multimillion-dollar buyers during the pandemic have been young professionals in their late 20s or early 30s with or without small families, she said.

“The demographic is much, much younger – tons of liquidity. They’ve had IPOs, and when you get that kind of tech wealth, it all spills around in a geographic area,” McLaughlin said.

Marin has been particularly appealing to this tech richness during the pandemic because young leaders have been seeking more outdoor experiences that aren’t as readily accessible in an urban setting, like backyard BBQs and mountain biking, she said.

Eyler said the pandemic has also accelerated the exodus of residents following wildfires over the past seven years.

Sonoma County’s population growth had slowed two years before the 2017 Tubbs and other fires destroyed more than 6,000 homes in Sonoma and Napa counties.

But then Sonoma County’s population growth slowed. Eyler observed by Treasury Department estimates. This slump for Sonoma County continued into 2018 and 2019 when the Kincade Fire resulted in the evacuation of two significant population centers, Healdsburg and Windsor.

Mental health experts have told the Business Journal that security threats were a factor in wanting to leave the area.

Eyler noted that wildfires in Northern California’s Butte County had a similar “shadow effect” on the local economy and population after the 2018 campfire that devastated the town of Paradise.

Jeff Quackenbush covers wine, construction and real estate. Before joining Business Journal in 1999, he wrote for the Bay City News Service in San Francisco. You can reach him at [email protected] or 707-521-4256.

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