Development restrictions leading to high rent is mentioned in the article. I don't know about the rest of the state, but I constantly hear this mentioned for San Francisco.
Development restrictions don't cause existing housing to disappear. If population were declining, there would be no need for new development.
Housing doesn't need to disappear. If we tried to move everyone in California closer to the center of its major cities, we'd see prices increase dramatically.
International immigration (the article is only talking about state to state moves) and birth rates have kept the population growing.