San Francisco’s population drain may be over. Recently released population estimates from the U. S. Census Bureau show that the population of San Francisco County increased by just over 1,200 people in the year to July 2023.
While the year-over-year growth in San Francisco was just 0.2%, it put The City By The Bay ahead of the other core Bay Area counties, which continued to lose population over the most recent year.
San Francisco’s growth in the past year is modest compared to the size of the exodus that hit the city during the pandemic. According to the Census estimates, San Francisco County lost around 60,000 people in 2021 and another 4,000 in 2022. That’s a total population loss of 7.2%, the highest in California by a wide margin.
The loss of over 7% of its population is a leading cause of San Francisco’s poor real estate performance in recent years.
Many of the people who left San Francisco were young tech workers who took the opportunity offered by remote work to relocate to more affordable locations. As a result, the downtown office vacancy rate increased from under 6% in 2019 to over 30% today.
San Francisco’s multifamily apartment market has also struggled, first with a sharp increase in vacancy, and then with stagnant rent growth. San Francisco is the only major metro in the nation where average apartment rents remain below where they were in 2019.
Moreover, San Francisco’s downtown retail core, based around Union Square, has been hit harder than any other major city, with falling foot traffic causing stores to close. The lack of activity has also impacted tourism in the city, with downtown hotel performance struggling to recover to pre-pandemic occupancy levels.
Suppose high costs were the cause of the population exodus. In that case, the relative decline in rents since 2020 has made San Francisco a more affordable place to live and work, which may have helped the recent recovery in population. San Francisco’s lifestyle and employment opportunities continue to make it a top destination for young adults, which bodes well for the city’s future recovery.
