Why L.A. is struggling while San Francisco is beginning to boom again

Salesforce tower, left, Coit Tower, center, and the Transamerica Pyramid building, right, are seen in this general view of downtown San Francisco. (Josh Edelson/For The Times) By Terry Castleman Staff Writer Follow May 6, 2026 3 AM PT 7 min Click here to listen to this article Share via Close extra sharing options Email Facebook X LinkedIn Threads Reddit WhatsApp Copy Link URL Copied! Print 0:00 0:00 1x This is read by an automated voice. Please report any issues or inconsistencies here. 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. The downtown Los Angeles skyline. (Eric Thayer/Los Angeles Times) Advertisement A tale of two citiesSan 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.” AI is booming in San Francisco. (Manuel Orbegozo/For The Times) Migration patterns matterCensus 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. Hollywood production has taken a hit. (Eric Thayer/Los Angeles Times) Bouncing back differentlyThose 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. Los Angeles County lost 54,000 residents from 2024 to 2025, driven by immigration restrictions and continued out-migration to other states. 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 Ang

Why L.A. is struggling while San Francisco is beginning to boom again

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