A few years ago, Placer and El Dorado counties were red hot, flush with Bay Area transplants and drawing more residents each year at a tremendous rate.
Now that trend is cooling.
Both counties grew at a slower pace in the past fiscal year than during any of the previous 35 years, according to population estimates released Wednesday by the California Department of Finance.
Placer County's population rose by 2.1 percent from July 2006 to July 2007. El Dorado County added 1 percent – matching the statewide rate. Both counties saw less than half their dizzying annual growth at the height of the local housing boom.
In the rest of the region, growth remained relatively steady: a little over 1 percent in Sacramento County; about 2 percent in Yuba and Yolo counties; and about 3 percent in Sutter County.
Population growth affects everything from tax revenues to additional retail outlets to housing prices. The slowdown is making local governments more cautious about spending decisions, with some holding vacancies open longer, shrinking operations or mobilizing task forces on cost cutting.
Slowing growth, however, could give the region breathing room for better planning, according to some environmentalists. And many local officials contacted Wednesday downplayed the numbers, saying that lower rates of growth may be healthy.
"It isn't all necessarily bad news," said Gordon Garry, director of research and analysis for the Sacramento Area Council of Governments.
Garry noted that Placer County still grew faster than all but eight other counties in the state. In El Dorado County, he said, a slowdown might help alleviate the current lopsidedness of being "high on houses and low on jobs."
Even so, Placer County hasn't seen a lower rate of population growth since 1971, according to state figures. And El Dorado's hasn't been this low since 1968.
The driver for the change appeared to be a statewide drop in domestic migration – movement from one part of the country to another. Instead, all of California's growth this year came from natural increase – more births than deaths – and immigration from other countries.
El Dorado and Placer counties are heavily dependent on domestic migration. The counties' populations are older and both have historically low immigration rates.
When it comes to domestic migration, about 4,500 more people moved to Placer County this year than left, barely half the net arrivals of five years prior, state figures show, and about 700 more people moved to El Dorado County than left, down by two-thirds in five years.
Changes in the housing market help explain the domestic migration trend, several experts said. With housing prices down everywhere, Bay Area bargain hunters may not have the equity to move or may be able to afford something closer to home.
California's chief economist, Howard Roth, also noted that places like Roseville and Lincoln can't grow forever without expanding their borders.
"Local economies are maturing – building is slowing down," Roth said.
Then there are the foreclosures. California residents who have lost their homes, Roth said, are opting to move out of state.
In all, about 90,000 more people left California than came here from another state this year, and Roth said that trend may be cause for concern.
When more residents leave than arrive, he said, it "often relates to what people think of California. Our economy is slowing down. We had a pretty big housing bubble that burst."
Locally, the slowing growth rate is being felt widely. El Dorado County has reduced its building services division by about a third because construction has slowed so much, particularly in once-booming El Dorado Hills, said Laura Gill, the county's chief administrative officer.
Some projects have been put on hold indefinitely, while other builders have told the county they're finishing homes under way but won't start new ones, Gill said.
"I don't think it's going to turn around next year," she said. "Maybe 2010, but your crystal ball is as good mine."
Call The Bee's Phillip Reese, (916) 321-1137. The Bee's Judy Lin contributed to this report.
