Growth Projections

Overview

The Center for Continuing Study of the California Economy has produced a draft growth projection for the six-county SACOG region. These projections are based on national and state projections and on current information on the region’s economy and housing. Stephen Levy of the Center for Continuing Study of the California Economy has worked with other large regions in California to refine statewide economic forecast.

SACOG worked with the state Department of Housing and Community Development (HCD) and the Department of Finance (DOF) to refine these forecasts for use in the Metropolitan Transportation Plan/Sustainable Communities Strategy and the Regional Housing Needs Assessment process. The draft population projections for 2020 are 3.9 percent lower than DOF and for 2035 they are 4.7 percent lower. State law allows for a 3 percent difference.

These projections are summarized in Tables 1 through 3 (link below). Detailed documentation of the analysis which underlies the projections will be prepared and distributed soon. The basic process is as follows:

  • The SACOG region job projections were based on projections of U.S. and California job growth and the competitive position of the SACOG region to capture a share of the state and national job growth.
  • The SACOG population projections by age, sex, and ethnic group were developed based on the projected job growth starting with the actual regional population in 2008.
  • The household projections are preliminary and are based on projecting forward the household formation trends of the current population by age and ethnic group. The preliminary household projections are demographic projections and do not yet reflect considerations of housing supply, income, and affordability.
  • State and national trends account for the major differences between the new projections and the ones adopted in the current Metropolitan Transportation Plan. U.S. immigration and total population growth is lower than previously expected. In addition, California is now expected to get a smaller share of U.S. job and population growth than previously projected.
  • The SACOG region’s economy is expected to recover slowly with state budget deficits and gridlock restraining job growth in this major sector over the next decade. However, the SACOG region is still expected to outpace the state and nation in job growth to 2020 and 2035, although the region is expected to have a smaller job growth advantage than was anticipated in the current Metropolitan Transportation Plan.
  • These projections depend on the California budget and governance so that the state can make the investments needed to provide a world-class workforce and infrastructure and local communities can develop great places to live and work. The projected growth also depends on the success of local and regional planning efforts in the SACOG region to provide an attractive environment, quality of life, mobility, and transportation mobility.
  • The number of housing units in these projections is estimated by SACOG staff based on limited available information of the effects of the Great Recession and mortgage crisis. Traditionally, we expect a 5 percent vacancy rate, but it is much higher currently. Households have responded by “doubling up” (more than one household per housing unit). These projections assume that this effect will disappear over the forecast period. In 2008, the vacancy rate was 9 percent, which declines to 7 percent by 2020 and to 5 percent by 2035.

The draft projections are compared to the projections done for the MTP 2035 in Table 4. Both future years, 2020 and 2035, are lower for all four growth indicators, population (Pop), households (HHs), employment (Jobs), and dwelling units (DUs). Also notice the prior projections for 2008 are higher than where we were in 2008, indicating the slower growth we have experienced.