Bay Watch: A Weekly Look into the Bay Area Economy
July 11th, 2023
Are wealthy people actually leaving the Bay Area in droves?
Short answer: no. However, they are leaving the region at a faster rate than they were before the pandemic, or after the Great Recession. The interactive chart below shows data from the U.S. Census American Community Survey in 2010, 2019 and 2021 to the questions “did you live in this house or apartment 1 year ago” and “where did this person live 1 year ago?” We tracked everyone who said they either moved into or moved out of the Bay Area, and tabulated them by income level to calculate overall trends in migration.
We found that in 2021, every income group experienced negative net migration, including what we call ultra-high income residents (earning $350k or more), which saw a net loss of 4,117 people. There has been a lot of buzz about wealthy residents leaving San Francisco and the Bay Area overall. Using data from the IRS, the San Francisco Chronicle wrote about the city’s declining population and the increase in average incomes of those leaving. However, as the article states, a high average income among people moving away doesn’t necessarily mean most of those migrants are wealthy, postulating that the increase in average incomes could be driven by a small number of very high earners.
While our dataset is a resident survey different from the Chronicle’s, the below chart does confirm a change in migration patterns that have led to a decline in the region’s population of higher income earners. In 2019, 3,340 ultra-high income residents left the region, while 3,626 moved in, for a net increase of 286 residents. In 2021, 7,979 left, and 3,862 moved in, for a net decrease of 4,117. It is critical to note that despite these shifts, net losses are still driven by lower income residents moving out: nearly 75% of the region’s net out-migration is attributable to individuals leaving who earn $100k or less. Therefore, reported increases in average incomes of those who left the region are skewed because of the increase in relatively small numbers of ultra-high income movers.