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Portland:  The City Where Young People Go to Create Businesses . . . And the Future
Strong growth in the urban core
Is Portland really a climate leader?
Portland's Urban Growth Boundary & Housing Costs
An inequitable housing bond measure

Portland:  The City Where Young People Go to Create Businesses . . . And the Future

A recent New York Times magazine article “Keep Portland Broke”, echoed a meme made popular by the satirical television show “Portlandia” asking whether the city will always be a retirement community for the young.

Far from being a retirement venue for the precocious indolent, the city is in fact a beehive of social and cultural innovation and entrepreneurship.

Critics are to be forgiven if they mistake a different set of interests and sometimes values for a disinterest in “traditional” work.

And we’re not talking individually pedigreed free-range chickens or artisanal pickles (although you’ll find those, too).

The truth is the young adults in Portland are disproportionately entrepreneurial.  Among college educated 25 to 34 year olds, fully nine percent are self-employed, a rate half again greater than that of other large metropolitan areas—and ranking Portland third for self-employment among metros with a million or more population.

Among the nation’s 51 largest metro areas—all those with a million or more population, Portland ranks fourth in small businesses per capita, fourth in self-employment, seventh in patents per capita and fourteenth in venture capital per capita.  And true to form, the city shines when it comes to edgy and creative:  according to Forbes, Portland ranked seventh in Bandcamp, third in Kickstarter, and third in Indie-Go-Go among US cities.

And the city is alive with creative endeavors of all kinds.  The city has more than 600 food carts and a vibrant farmer-to-family food system.  The city has an unusually high concentration of musicians, artists and the creative class.

Portland is home to the nation’s leading cluster of athletic and outdoor gear and apparel firms, including the world headquarters of Nike and Columbia Sportswear and the North American headquarters of adidas.  And there are more than 400 other firms in the industry cluster—most of them started locally, and making Portland one of the hottest places on the planet for designers.

Arts and culture.  Indy bands.  A prolific, inventive food scene.  Strong and innovative clusters of software and semiconductor firms.  A robust, world-class athletic gear and apparel cluster.

And, at the end of the day, the claims of indolent retirement fall in the face of simple and compelling data about the region’s unemployment rate.  In 2012, the unemployment rate for 25 to 34 year olds with a four-year degree or higher level of education in Portland was 4.8 percent—a bit higher than the average for large metropolitan areas (4.0%), but the same as Houston, and lower than Atlanta and Chicago (5.2%), Los Angeles (8.3%) Las Vegas (7.2%) and—attention New York Times—New York (5.7%).

This new generation is doing new and different things.  It is keeping Portland weird.  And some of what is happening will seem bizarre or disconcerting to those who’ve grown settled in their ways.  But Oregonians are pretty much oblivious to this kind of derision from outsiders:  we’re content to do what we want because it makes sense to us, not because it passes muster with critics from somewhere else.

There’s actually a long history of that here in Portland.  Back in the 1960s, at a time when adult Americans generally didn’t sweat in public if they could avoid it, people in this area started running and jogging for health.  What was originally odd behavior—grown men and women in shorts and t-shirts out running along public streets—presaged a national and global trend in fitness.  And one guy started a business selling Japanese sneakers to these joggers out of the back of his 1964 Plymouth Valiant station wagon.  The company Phil Knight started—Nike–is today one of the world’s most recognized brands and the global leader in sports apparel.  Not every weird little habit ultimately leads a Fortune 500 company, but a surprising number of successes emerge people were weren’t afraid to be different.

Joe Cortright’s earlier rejoinder to the New York Times article on Portland appears on CityLab.


Strong growth in the urban core

We’ve chronicled the rapid increase in the number of well-educated young adults living in Portland’s close-in urban neighborhoods over the past two decades.  The large and growing workforce in the urban center is having a significant economic impact–firms are increasingly choosing to locate and expand in the downtown area and nearby neighborhoods to hire these workers.  A new report from the Oregon Employment Department’s Christian Kaylor highlights two striking developments.

First, job growth in the City of Portland is sharply outpacing that of the surrounding suburban counties.  Over the past year, employment growth in Multnomah County–which is mostly the City of Portland–has been 2.4%, more than double the growth rate in the two adjacent suburban counties (Clackamas – 0.9% and Washington 1.0%).  This represents a reversal of this historic pattern of job decentralization.

Second, worker incomes in Portland have grown rapidly in the recovery, while they have been stagnant in the suburbs.  Using data from the latest American Community Survey, Kaylor estimates that median incomes, adjusted for inflation, for full-time workers living in Portland have grown from $45,000 to $49,000 since 2010.  They’ve surpassed earnings for two of the three surrounding suburbs.


Source:  Oregon Employment Department, Portland Economic Trends, September 2014




Is Portland really a climate leader?

Portland was one of the first cities to adopt a formal goal of reducing greenhouse gases, and for years its tracked its emissions inventory. And while it has made progress since 2000, the last four years have witnessed a dramatic reversal in emission trends, due almost entirely to increased driving.

Bottom line:  Despite making progress between 2000 and 2010, Portland is now falling further and further behind in its pledge to reduce greenhouse gas emissions, almost entirely because we’re driving more.  The failure to connect the dots–low prices for fuel stimulate more driving–means we’re likely to fall further behind in the years ahead, unless we do something dramatically different.

Portland's Urban Growth Boundary & Housing Costs

Portland’s urban growth boundary, a ring drawn around the metropolitan area to limit sprawl four decades ago, has worked.  Portland is growing more dense, and promoting infill. housing. Some think that the UGB has driven up housing costs, but there’s little evidence for that. Busting the urban growth boundary will do nothing to address housing affordability. Here’s why:

Affordability is about growing up, not out. The economic literature is very clear that the problem is primarily constraints on achieving higher levels of density within existing urban areas: i.e. building more multi-family housing. Rents are rising in Portland (and Seattle and San Francisco) because of the difficulty/constraint on building more density in the center, not expanding the periphery. More housing in the center makes better use of our existing, expensive infrastructure, and lowers transportation costs and pollution. Adding land at the urban edge does little to expand either the supply of housing or, more importantly, the supply of affordable housing. In the last 15 years, the Metro urban growth boundary (or UGB) has been expanded to add more than 32,000 acres of land. Since 2000, those UGB expansion areas have added only 8,500 new housing units, about 7% of new dwellings built since 2000.

The market demand/affordability problem is in the urban core. That message is abundantly clear in the shift in home prices in Portland. All of the price appreciation in the Portland area is focused on the urban core. In 2005 that homes in Portland sold for a $20,000 discount to homes in the suburban counties. Now Portland homes sell for a $27,000 premium to homes in the suburbs. Adding more land on the periphery does very little to influence supply in the center, where the demand is.

An inequitable housing bond measure

Portland’s metro regional government has put to the voters a multi-hundred million dollar bond measure to reduce homelessness.  But the measure has a serious flaw, allocating money to counties based on population, not on need. Because most of the region’s homeless live in Portland–which is already spending more than $50 million a year on homelessness, the measure is actually inequitable.

We’ve computed the estimated allocation of a $250 million per year program based on overall county population, as shown the the following table.  Each county gets the same share of the $250 million total as its share of total population:  Multnomah County gets 44 percent or about $110 million, and the other counties get proportionate amounts.  We’ve also computed the amount that each county gets per homeless person and per unsheltered person. We use the relative size of the unsheltered and homeless population in each county to index the  need, and show how much is available in each county relative to that need.

These data show that on a per homeless person basis, Washington County gets about five to six times as much as Multnomah County, and that Clackamas County gets about two to three times as much as Multnomah County.  Per unsheltered homeless person, Multnomah County gets $54,000; while Washington County gets more than six times as much:  $355,000.

If you’re homeless in the Portland area, it shouldn’t matter what county you live in.  But Metro’s proposed allocation system would provide vastly fewer resources per homeless person in Multnomah County. That’s particularly ironic in light of the fact that most of the persons of color who are homeless in the region live in Multnomah County.  If you’re looking to redress the resource inequities that have worked to the disadvantage of these groups, this approach doesn’t do that.