LOS ANGELES — California marked its tenth year of population growth below 1% according to official estimates by the state's Department of Finance.

The slow population growth represents challenges for California.

Pedestrians walk past the California State Capitol building in Sacramento, California, U.S.
California's State Capitol in Sacramento. The state's population has reached 39.6 million, according to the state Department of Finance. Bloomberg News

It gives the state time to catch up on a housing crisis it still hasn’t quite put its arms around, though the numbers are in part a byproduct of high costs that are driving residents away.

In the last 10 years, California has built an average of 80,000 homes a year, 100,000 less than the number needed to keep up with population growth, according to the California Department of Housing and Community Development. Housing officials estimate that 1.8 million new housing units will be needed by 2025 based on Department of finance population projections.

The slowed growth has brought concerns in the past about businesses leaving the state. But there has not been widespread evidence of that.

The 301,000 population gain from July 1, 2016 to July 1, 2017, represents a growth rate of 0.77%, according to the finance department's analysis, released Dec. 21.

The annual growth in California since 2010 has varied from 0.65% to 0.97% or, numerically, from just under 253,000 to just over 367,000 over the same period, said H.D. Palmer, a DOF spokesman.

The state expects the slow growth to continue. The DOF has previously estimated the state’s population will hit 50 million by 2025.

“Birth rates have fallen in both the U.S. overall and in California, with both lower than replacement level,” Palmer said. “The Census Bureau’s estimates show 14 states with a natural decrease (more deaths than births) last year (July 2016 – July 2017), while California had a natural increase of 220,000, so we’re not there yet.”

The state has seen more outmigration from people at lower incomes while more highly educated people with higher pay continue to move in, he said.

Most of the growth came in the Bay Area, Los Angeles and counties east of Los Angeles.

Los Angeles County grew by 0.55%, while the Bay Area counties of San Francisco grew 0.91%, Alameda County inched up 0.83%, and Santa Clara County climbed 0.65%. Riverside County east of Los Angeles grew 1.28%.

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