Why L.A. is struggling while San Francisco is beginning to boom again 44%
By Terry Castleman40%
5/6/2026, 10:00:00 AM
Topics: Economic Recovery, Demographics
BS Summary: This article contains 9 faulty reasoning types, including Post Hoc (False Cause), Optimism Bias, and Biased Writer Voice, with Negativity Bias as the most egregious example at 16% saturation with 157 hits. Analysis detected 528 faulty-reasoning hits from 984 analyzed words, generating a BS Score of 46.8% and a BS Rank of 44% (12,440 of 21,886 articles). This article is better (less manipulative) than 56.80% of the article peer group.
The COVID-19 pandemic brought tough times for both Los Angeles and San Francisco.
Crime briefly rose.
Rising housing prices combined with the opportunity to work remotely led to declines in population.
Concerns over blights and quality of life became political issues.
But now, there are early signs of a postcrisis divergence in fortunes between the two cities.
San Francisco is in the midst of a new tech boom fueled by artificial intelligence that has lured new residents to the city and boosted a downtown economy.
The city netted a small increase in population last year, according to new U.S. census data.
Los Angeles County, by contrast, is still struggling.
Population losses are continuing, and its economy is being hit by several forces including a shrinking Hollywood industry and President Trump's immigration policies that have slowed growth and upended some business sectors.
It will take many more years to see whether this become a larger trend.
Demographers say the San Francisco boost is notable but far from a sign of boom times ahead.
In fact, many experts say high housing prices and other factors continue to make more affordable cities outside California very attractive, especially to younger people.
"Housing is of course at the top of the line for most people who are leaving," said Hans Johnson, a senior fellow at the Public Policy Institute of California.
"San Francisco is experiencing a sort of AI boom even as other components of tech aren't doing as well."
Census data show San Franicsco's population was up 0.62% in 2025, in contrast to statewide numbers that remained mostly flat while L.A.
County recorded a 0.55% decrease.
Another tech center just south of San Francisco — Santa Clara County — saw its population rise 0.33%.
In San Diego County, the population dropped 0.16%.
The percentage changes are not huge, but they offer a snapshot of the regions.
In raw numbers, L.A.
County lost about 54,000 people from July 2024 to July 2025, the largest numeric population decline in the nation, data from the Census Bureau show.
A major factor in 2025's population trends was a sharp drop in net international migration.
As the Trump administration launched an aggressive clampdown on immigration, L.A.
County saw the number of new residents coming in from abroad plummet from 92,000 people in 2024 to 29,000 in 2025.
Silicon Valley and L.A. reported losses similar to those of other states from 2024 to 2025, said Jenna Nobles, a professor of demography at UC Berkeley, but in Santa Clara County, international workers brought to the U.S. by tech companies in Northern California helped stave off population losses to other states.
That was not the case in Los Angeles County, which had a net loss of 105,000 residents because of domestic migration out of the region in 2025, a slight increase from the previous year when the county lost 99,629.
Hollywood is not a huge piece of the Los Angeles County employment.
But it has become a source of major concern, with film and television shooting moving out of the state and job losses topping 45,000 in recent years.
Those and other forces may have played a role in the nearly 40% of office space available in downtown Los Angeles at the end of last year, according to the real estate firm CBRE.
Overall vacancy there climbed from 14% in 2019 to 34% in 2025.
Adding to Southern California's economic struggles, the Eaton and Palisades fires contributed to a net loss of 0.5% in gross domestic product in Los Angeles County in 2025, according to a study by UCLA Anderson School of Management.
Office leasing in San Francisco, meanwhile, rose by 20% in 2024 and reached its highest level since 2019, per the San Francisco Examiner, as AI companies brought in tens of billions of dollars in venture money.
Though office vacancy in San Francisco was at 34.4%, more space was leased than vacated for the first time since 2019, according to the San Francisco Standard.
San Francisco's unemployment rate was 4.1% in January, according to the Federal Reserve Bank of St.
Louis.
In Los Angeles County, it was 5.5%.
Johnson cautions about reading too much into the numbers — at least at this point.
"San Francisco has built a bit of new housing, most of it multiunit housing and large buildings," he said.
In both L.A. and San Francisco, the number of people per household has been going down as births decrease.
San Francisco already had a very low number of children per household, so it has been affected less by the nationwide decline in birth rates, he said.
"Los Angeles has further to fall," Johnson said.
Another difference between the two cities is net migration to other states.
San Francisco's out-migration declined from tens of thousands per year during the pandemic emergency to about 100 people last year, while L.A.
County's net loss was more than 100,000, Johnson said.
Since L.A.
County's population is more than 10 times that of San Francisco County, a net loss of 100,000 Angelenos would be proportionally similar to losing 10,000 San Franciscans.
"The big picture is that neither place's population is changing much population-wise — it's not like San Francisco is taking off," he said, "and it's not like Southern California is having huge declines in population."
"We've moved from this young, growing, booming state to something more like a mature, slow-growing state," Johnson said.
"More like New York than Texas."
The census findings should also affect state planning, he said.
"There's some real challenges there in terms of having enough workers to support an aging population."
If populations stall, tax revenue may follow — especially sales taxes, per an analysis by CalMatters — leading to less spending power for the state as inflation brings costs up.
Times staff writer Jenny Jarvie contributed to this report.
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