San Diego County gained 29,297 persons between 2004 and 2005, reports the California Department of Finance. The county did not lose 1,728 persons during that time, as suggested by the U.S. Census Bureau and reported widely, perhaps a bit sensationally, by San Diego media, from print to electronic.

How We Grow

In one important growth factor, the two sources of population information are in agreement. More than 45,000 persons were born in the county last year, while about 20,000 died. That is a "natural" growth increase of net 25,000 persons.

The difference lies is in the other factor of growth, net immigration, the number of people who move here from other states and foreign countries, minus those who depart. The state reports that net migration exceeded 2,100 persons, a function of 14,500 new foreigners in our region, while there was a loss of almost 12,400 persons due to "net domestic migration." The U.S. Census suggests there was a loss of almost 26,500 persons because while almost 16,700 persons moved into the region from other nations, more than 43,000 persons moved out of our region, dubbed "net internal migration."

Why is there a discrepancy between the two agencies?

The answer goes to the approach that each takes in compiling the numbers. The census is based on the "long form" survey that is sent to and filled out by one in six persons, neither a particularly representative nor random sample. Moreover, there is no way to track the previous location of first time tax filers, an important source that is relied upon by the U.S. Census Bureau.

While the state uses federal tax returns, it also incorporates Department of Motor Vehicles data and change of address to assess the migration of the working population. Economists and demographers agree that this data source is the most reliable in estimating migration.

Why is this issue of population important? Simply because many conclusions can be drawn from this data, with wide implications to the health of our region.

The Job Effect

If people leave, it must be principally because they are finding jobs elsewhere. However, San Diego County has added 31,000 new jobs annually from 1994 to 2004. It is accurate to say there is a loss of traditional "manufacturing" jobs, which shrank by 18,400 from 2001 to 2004. At the same time, jobs in the service sector grew by 65,400.

The London Group Realty Advisors has completed fresh research demonstrating that these manufacturing sector jobs have left the coastal regions, including San Diego, for out of state, or inland California locations. The principal beneficiaries are Riverside, San Bernardino, Ontario and Bakersfield, which combined have added more than 45,000 manufacturing sector jobs in four years.

In other words, San Diego, Orange and Los Angeles counties are losing brawn jobs for brain jobs.

This is tantamount to an "economic sea change," and is something that has been playing out in San Diego County over the past several years.

Where Folks Live

Many view population changes as a reflection of the health of our housing market. In fact, that was the angle local media took with the data. With the median price of housing now peaking at $561,350, it is suggested that people are leaving because they cannot afford a new home. This is undoubtedly true of those in job-losing sectors. It also is true of first-time buyers, who face more daunting financial obstacles to own their first house. And it is also true of workers in the service sector (retail, hospitality, administrative, etc.) who work at lower pay scales.

But it is not true of the more than 55,000 people who purchased a home in San Diego County last year. The reality is, if you own a house you can buy a house, and you probably eventually will as a move up. This place is just too nice to leave unless you must.

Critical policy implications are inherent in the "upscaling" of our market. That is why builders are turning to density, smaller units in urban, older locations and mixed-use projects to try to address the region’s housing needs in a more affordable way.

Uncle Sam’s Spending

Libertarians suggest that if a region is losing population, its policy makers ought not to present ever-increasing budgets. The theory goes that lower population means smaller demand for public services. This might be true in the theoretical world. The problem lies in the potholes and passed over maintenance issues in the communities where the people who plan to stay actually live. In our region it is fairly evident that government has been underspending in these communities (or perhaps more accurately, misspending) available tax dollars.

History’s Perspective

People have not been leaving San Diego County for six of the last nine years. Any conclusion of an exodus is not only erroneous, but illogical in view of the region’s economic expansion since 1997. The local economy even weathered one national downturn, principally because of its diverse job base in important economic clusters, as well as the strength of the military and tourism sectors.

Each year since 1995 has witnessed positive net migration. In addition, domestic migration -— those moving to San Diego County from another county in California or another state — has been positive until last year. Negative domestic growth did occur in 1995-96 when the region was emerging from a very severe recession.

Foreign Immigration

While economic challenges lie ahead, our region is mostly transforming in a good way. We are growing, and most other metropolitan areas are not. Barring an unanticipated economic event or catastrophe, this region will remain strong and continue to add population.

Much of our future growth — and the San Diego Association of Governments tells us that we will add more than 50,000 persons each year through 2030 — will be owed to natural increase and less to migration.

The people who migrate here will have higher paying jobs and will participate in a diverse, resilient economy.

It also is important to not fixate on domestic migration, foreign migration or immigration matters. The national and local debate on refining immigration laws has enormous implications for the health of our local economy.

It is incorrect to state that more people are leaving San Diego than moving here while all of the other data suggests just the opposite, particularly when we know that San Diego is among the healthiest regional economies in the United States.

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 or e-mail him at glondon@sandiegometro.com.