San Diego has experienced population gains in natural increase and net migration (both foreign and domestic) since 1997. This growth has occurred despite regional economic growth having stabilized over the past two years, coming down off the halcyon years that preceded.

San Diego’s economy expanded in the 1997 to 2001 period and has weathered the most recent national economic downturn, principally due to the region’s diverse job base and economy. The California Department of Finance, which uses data (monitored monthly) from the Internal Revenue Service and the California Department of Motor Vehicles, reports positive net migration (people moving to San Diego from other parts of the United States) every year since 1995-96.

Within the overall growth story are some interesting trends.

• The California Department of Finance calculates a positive net domestic migration of about 30,000 people since 1995, meaning more U.S. citizens are moving here than leaving.
  
  
• The negative net domestic growth in 1995-96 came when the region was emerging from a very severe recession. The period that follows best represents the economic demographics of today, a package that includes the addition of an average of 38,000 new jobs and 51,000 new people each year.
  
  
• Foreign migration or immigration as a component of population growth has accounted for an average of slightly more than 16,000 newcomers annually to San Diego since 1995.

Our region is mostly transforming in a good way. We are growing, and most other metropolitan areas are not. Future growth will be owed more to natural increase — births — and less to net migration. The people who do migrate here will have higher paying jobs and will participate in a diverse, resilient economy.

Employment Growth Trends

On the job front, San Diego has been performing remarkably well, despite some reports to the contrary. There seems to be some confusion about job growth over the past two years. A change over the past two years in the way the California Department of Finance collects data has led to reports suggesting that wage and salary employment had decreased. But based on information collected from the region’s most reliable data sources that track commercial real estate absorption, it is safe to say the region will add more than 16,000 new jobs this year. While a tad down from the 17,000 added last year, it is still hard growth in terms of numbers.

It is not surprising that jobs are on the increase as companies in the technology clusters rebound after several bad years. As national economic conditions improve, these businesses also are taking advantage of comparatively inexpensive leasable space by expanding and upgrading.

While well off from the peak years when 38,000 new jobs were added, San Diego may be the only metropolitan region in the United States — outside of Washington, D.C. — experiencing significant job growth.

Is Growth Good?

The media and the environmental community tend to say “no.” Growth causes change and, frankly, most people are uncomfortable with change. Such sentiments are understandable in that most San Diegans have come here from someplace else. People come because they like San Diego and, incidentally, can find local employment. That image of the place they came to becomes a fixed snapshot in our heads. Any deviation from that is uncomfortable.

However, the opposite of growth is bad. Because population growth is a function of economic growth, usually reflected in employment statistics, to suggest a halt to growth is tantamount to asking to shut down the economy.

Shutting down the economy is not an acceptable solution. Ask the folks who have endured just such a phenomenon in the Midwest and Northeast. These folks would love to have San Diego’s growth problems.

San Diego is among the country’s healthiest regional economies. By every reasonable measure of regional economics we are among the top performers during the past several years, despite a sluggish national economy and disasters in metropolitan areas as proximate as San Francisco, which has lost about 120,000 jobs during the past five years. The negative result has dominoed throughout that regional economy in terms of high unemployment, high vacancy rates in commercial office and industrial, loss in retail sales and lowered real estate valuation.

San Diego’s economic diversification, a frequent topic of this column, has been the region’s salvation. With diligence, it will remain an effective buffer.

The trick is to preserve a high quality of life, not a “snapshot” of the way things were when each person arrived. With growth come challenges in meeting transportation requirements, housing needs, public services and infrastructure. Realistic, workable solutions to these issues are available. Together they can transform San Diego into a community with an ever-increasing high quality of life, and with a richness of culture, diversity and economic strength that is the envy of the nation.

Gary H. London is president of The London Group Realty Advisors Inc., providing real estate consulting and economic analysis. Check him out on the Web at www.londongroup.com.