Portland

Any Port in a Storm?

Posted on by Joe Cortright

Over the past few weeks, there’s been a fair amount of media furor over the slowdown in container traffic handling on the West Coast as dockworkers and shipping companies negotiated the new terms of a labor deal.

You no doubt heard a fair amount of hyper-ventilation about the economic consequences of disruptions to this international supply line. Unsurprisingly, the longshoremen’s union took maximum advantage of its leverage over workflow to drive a hard bargain with the shippers. This is a kind of kabuki show that is repeated whenever these multi-year contracts are up for renewal. And, as almost always happens, the two parties have come to an agreement, and ports, especially the Ports of Los Angeles and Long Beach are working quickly to move the backlogged traffic.

With the prospect of a new wider Panama Canal re-arranging the competitive environment for global shipping, many seacoast cities are giving new thought to how port traffic might influence their future growth prospects.  There’s little question that big “load-center” ports are hubs of commerce, where the economies of scale in shipping seem to be creating a winner-take-all situation.

But how big a deal is container traffic to the typical metropolitan economy? What if your city isn’t the big winner in the container traffic game?  That question is a very live one in Portland. Overshadowed by the furor generated by the coast-wide slowdown was an announcement earlier this month by Korean shipper Hanjin that it was terminating container service to the Port of Portland. Hanjin accounts for three-quarters of Portland’s container traffic.

In a new column in Oregon Business magazine, I examine the economic ramifications of the Portland’s loss of dock-side container service.

For a city whose first name is “port,” the loss of container service seems like an economic body blow. We are constantly being told that Oregon has a “trade-dependent” economy. How will we survive without this iconic connection to the global marketplace?

The answer will surprise you: Just fine.

You can read the rest at OregonBusiness.Com

There’s little doubt that container service is a highly visible icon of any city’s connections to the global economy. It’s the sort of thing that television reporters can stand up in front of a camera and tell visually compelling stories.

But for most city economies, dockside container service has little to do with whether they succeed or fail in the global economy. The ability of cities to compete hinges not on whether they can cheaply move bulk goods, but on whether they can create world-class products. Particularly in high-cost countries like the United States, firms compete on product differentiation and performance, not transportation cost. This is true of the high-value products of advanced industries: everything from commercial jets to computer chips. This is even more true for services–software, motion pictures, financial services–for which physical movement of product is essentially irrelevant.

As we move toward an increasingly intangible, innovation-driven economy, the old metaphors we use to visualize the economy are becoming a less useful guide to thinking about how the world works.

Keeping it Weird:  The Secret to Portland’s Economic Success

Posted on by Joe Cortright

Note: This article appeared originally in the February 13, 2010, edition of The Oregonian. Forgive any anachronistic references.

These are tough economic times. Although economists tell us the recession is officially over, a double-digit unemployment rate tells us something different. The bruising battle over the economic consequences of tax Measures 66 and 67 underscored deep disagreement — and uncertainty — about Oregon’s economic future.

What will we do for a strategy? I think you can find the answer hidden in plain sight. Keep Portland Weird. You’ve seen the bumper sticker around town. It’s funny and controversial. It’s spawned imitators (Keep Portland Beered, Keep Portland Wired) and competitors (Keep Vancouver Normal). But it’s not just a bumper sticker — it’s an economic strategy.

In a turbulent economy, being different and being open to new ideas about how to do things are remarkably important competitive advantages.

The bumper sticker may not be original — apparently the idea was imported from a buy-local campaign in Austin, Texas — but it is popular, with more than 18,000 of the stickers sold. And make no mistake, Portland is weird, at least compared with other major U.S. metropolitan areas.

We developed a weirdness index for the national organization CEOs for Cities that measures the differences in behavior based on 60 different indicators of what people do, watch, read and consume.

We used this data to rank the 50 largest metro areas, based on how closely their patterns tracked the overall national average. Portland ranks 11th of the 50.

The most normal places in the country are in the Midwest. Consumption patterns, attitudes and behaviors in St. Louis, Kansas City, Cincinnati and Columbus almost exactly match national norms.

Trying to summarize weirdness in a single index is, of course, a contradiction in terms. Every weird city is weird in its own unique way. San Francisco and Salt Lake City rank among the weirdest — most different from the U.S. average in attitudes, activities and behaviors –but are nothing alike. So it makes sense to drill down to find out what makes each place distinctive.

In what ways is Portland weird? As you might expect, recreation, environmentalism, and great food and drink figure prominently. Compared with the U.S. average, Portlanders are twice as likely to go camping, 60 percent more likely to go hiking or backpacking and 40 percent more likely to golf or hunt. Portland has the highest per-capita ownership of hybrid vehicles of any city, and more people belong to environmental groups. We also rank above average in consumption of alcohol, coffee and tea.

Another way to track local weirdness is to look at what terms people are searching for on the Internet. According to Google over the past year, Portland ranks first among U.S. metro areas for the search terms “sustainability,” “vegan,” “farmers market,” “cyclocross,” “microbrew” and “dragonboat,” and second — after Seattle — for “espresso.”

But aside from winning bar bets or playing Trivial Pursuit, what’s the economic importance of being weird?

As it turns out, a lot.

When it comes to economic success in today’s economy, the key is to differentiate yourself from your competitors. Harvard Business School’s Michael Porter counsels businesses that “competitive strategy is about being different.” And the late, great urbanist Jane Jacobs told us, “The greatest asset that a city can have is something that’s different from every other place.”

Practical examples of how distinctive local behaviors translate into economic activity are right in our own backyard.

Back in the ’60s, at a time when most adults didn’t sweat in public if they could avoid it, people in Oregon started the trend of jogging and running for health. One guy started selling these people Japanese sneakers out of the back of his station wagon: Phil Knight. The company he founded is a global powerhouse.

A similar story could be told about two avowed ex-hippie home brewers, who as soon as it was legal to do so, started selling kegs of their beer to local restaurants out of the back of their Datsun pickup. Kurt and Rob Widmer, and a host of other amateurs turned entrepreneurs, ignited a trend that is even today reshaping the brewing industry.

The conventional business wisdom of the 1960s or 1970s would never have forecast that Portland would become a hotbed for two industries that were either in steep decline (shoes) or increasingly monopolized by giant corporations (beer). But with local consumers who were willing to take a flier on something new — and whose tastes anticipated a much larger shift in global attitudes — athletic apparel and microbrewing both became signature industry clusters in metropolitan Portland.

True entrepreneurship is about deviant behavior: starting a business that makes a product that no one else has thought of or thinks there’s a market for. Entrepreneurs and open-minded, experimental customers go hand-in-hand.

Openness to change isn’t just about new products or services; it’s about community and government as well. Oregonians’ willingness to test novel or untried ideas of all kinds — urban growth boundaries, modern streetcars, vote-by-mail, death-with-dignity — is both representative of a widely held attitude towards change and a powerful advantage in a fast-moving world.

And in many cases, innovative public policies are essential to growing new industries. Microbrewers owe their early start, in part, to Oregon’s decision to be one of the first states to legalize craft brewing. Many Portland businesses are exporting the knowledge gained from the region’s pioneering work in urban planning, streetcars, green buildings and cycling.

Openness to new ideas also is critical to attracting and retaining mobile, talented young people — the college-educated 25- to 34-year-olds I call the “young and restless.” Our in-depth national study of migration trends showed that over the past decade, Portland has seen a 50 percent increase in this group, the fifth-fastest growth of any large metro area.

Portland’s special character, and the sense that one can live their values and make a mark, are key to this migration. As one interviewee put it: “This place communicates to newcomers that it ‘isn’t done yet’ and that there’s an opportunity for me to contribute to what it will become.”

To be sure, the Keep Portland Weird mantra has spawned detractors and wags: Keep Vancouver Normal. Keep Portland Sanctimonious. We shouldn’t do things just to be different, but we should never be dissuaded from trying something simply because it is different or would make us different from other places.

Decades ago, Gov. Tom McCall understood and gave voice to this sense of Oregon exceptionalism, when he famously said, “Come visit, but don’t stay.” Our pioneering spirit runs deep. Remember, the state’s motto is “She flies with her own wings,” which in today’s parlance would be translated as marching to the beat of a different drum.

Keeping Portland Weird ought to be the theme of our economic strategy. Especially today. As Hunter S. Thompson advised, when the going gets weird, the weird turn pro. We can be reasonably certain that the U.S. and world economies will need to change dramatically to meet the challenges we face in coping with climate change, providing health care and building livable communities. In the days ahead, being weird can be a competitive advantage.

Making weirdness your marketing slogan turns the usual logic of boosterism on its head. The conventional wisdom prescribes emphasizing a “good business climate” — usually consisting of the same things you find everywhere else, just cheaper. Traditional strategies chiefly involve clinging to the past or shamelessly clumsily copying what everyone else is doing.

If one buys into the view that the “world is flat” — the metaphorical reference to a level playing field in a global market — the temptation is to focus on making yourself “flatter.” In reality, the world though smaller and more tightly linked, isn’t flat. There are giant spikes of industry, creativity and inventiveness in particular places. So the key is to understand what your “spikes” are and capitalize on them. The alternative strategy — make Portland flatter — is a recipe for mediocrity and failure in a global knowledge-based economy where the ability to generate new ideas and turn them into businesses and better communities is the only source of sustainable competitive advantage.

No one can predict what will be the industries of the future. They have to be invented and created through trial and error — lots of trials, and almost as many errors. A place that is open to new ideas — especially weird ones — is by its nature better positioned to generate the kinds of trials that lead to these new industries.

How Should Portland Pay for Streets?

Posted on by Joe Cortright

For the past several months, Portland’s City Council has been wrestling with various proposals to raise additional funds to pay for maintaining and improving city streets. After considering a range of ideas, including fees on households and businesses, a progressive income tax, and a kind of Rube Goldberg income tax pro-rated to average gasoline consumption, the council has apparently thrown up its hands on designing its own solution.

The plan now is for the street fee solution to be laid at the feet of Portland voters in the form of a civic multiple choice test: Do you want to pay for streets with a monthly household street fee, a higher gas tax, a property tax, an income tax or something else entirely?

Given voter antipathy of taxes of any kind, it’s likely that “none of the above” would win in a landslide if it’s included as an option on the ballot (not likely).

All of these options have their own merits and problems, and it’s doubtful that there is a majority consensus for any one of them. How, how much, and who pays for streets is a key issue for every city. From an urbanist and public finance perspective, and as a guide to thinking about which—if any—of these approaches Portland should adopt, here are my eight suggested rules for paying for streets:

1. Don’t tax houses to subsidize cars. Despite mythology to the contrary, cars don’t come close to paying for the cost of the transportation system. The Tax Foundation estimates that only 30% of the cost of roads is covered by user fees like the gas tax. Not only do cars get a free ride when it comes to covering the cost of public services—unlike homes, they’re exempt from the property tax—but we tax houses and businesses to pay for car-related costs. Here are three quick examples: While half of storm runoff is from streets, driveways and parking lots, cars aren’t charged anything for stormwater—but houses are. A big share of the fire department’s calls involve responding to car crashes—and cars pay nothing toward fire department costs. Similarly, the police department spends a significant amount of its energy enforcing traffic laws—this cost is borne largely by property taxes—which houses pay, but cars don’t. If we need more money for streets, it ought to be charged on cars.

Adding a further charge on houses to subsidize car travel only worsens a situation  in which those who don’t own cars subsidize those who do. One in seven Portland households doesn’t own a car, and because they generally have lower incomes than car owners, fees tied to housing redistribute income from the poor to the rich.

2. End socialism for private car storage in the public right of way. Except for downtown and a few close-in neighborhoods, we allow cars to convert public property to private use for unlimited free car storage. Not asking those who use this public resource to contribute to the cost of its construction and upkeep makes no sense and ultimately subsidizes car ownership and driving. This subsidy makes traffic worse and unfortunately—but understandably—makes it harder and more expensive to build more housing in the city’s walkable, accessible neighborhoods. If, as parking expert Don Shoup has suggested, we asked those who use the streets for overnight car storage to pay for the privilege, we’d go a long way in reducing the city’s transportation budget shortfall—plus, we’d make the city more livable.  We should learn from the city’s success in reforming handicapped parking that getting the prices right makes the whole system work better.

3. Reward behavior that makes the transportation system work better for everyone. Paying for the transportation system isn’t just about raising revenue—it should be about providing strong incentives for people to live, work and travel in ways that make the transportation system work better and make the city more livable. Those who bike, walk, use transit, and who don’t own cars (or own fewer cars) actually make the street system work better for the people who do own and use cars. We ought to structure our user fee system to encourage these car-free modes of transportation, and provide a financial reward to those who drive less. The problem with a flat-household fee or an income tax is it provides no incentive for people to change their behavior in a way that creates benefits for everyone.

4. Prioritize maintenance. There’s a very strong argument that we shouldn’t let streets deteriorate to the point where they require costly replacement. Filling potholes and periodically re-surfacing existing streets to protect the huge investment we’ve already made should always be the top priority. Sadly, this kind of routine maintenance takes a back seat to politically sexier proposals to expand capacity. We need an ironclad “fix it first” philosophy. Also, we need to guard against “scope creep” in maintenance. There’s a tendency, once a “repair” project gets moving, to opt for the most expensive solution (see bridges: Sellwood, Columbia River Crossing). That’s great if your project gets funded, but a few gold-plated replacements drain money that could produce much more benefit if spread widely.  We need to insist on lean, cost-effective maintenance.

5. Don’t play “bait and switch” by bonding revenue to pay for shiny, big projects. There’s an unfortunate and growing tendency for those in the transportation world to play bait-and-switch with maintenance needs. They’ll tell us about the big maintenance backlog to justify tax and fee increases. Then they bond two or three decades worth of future revenue to pay for a shiny new project; the Sellwood Bridge and the local share of the Portland-Milwaukie light rail have been funded largely by tying up the increase in state gas tax revenue,vehicle registration fees, and flexible federal funds for the next two decades. The state, which routinely financed construction on a pay-as-you-go basis, has also maxed out its credit card: in 2002 ODOT spent less than 2% of its state revenue on debt service; today, it spends 35%. Now it is pleading poverty on highway maintenance. Politically, this makes a huge amount of sense.  You get to build the projects today, and pass the costs into the future. Unfortunately, in practice it leads to a few gold-plated projects now, while jeopardizing the financial viability of the transportation system in the long run.

6. Promote fairness through the “user pays” principle. We all want the system to be “fair.” In the case of general taxes, we often put a priority on progressivity—that taxes ought to be geared toward ability to pay. But for something like transportation (as with water rates, sewer rates, or parking meter charges), fairness is best achieved by tying the cost to the amount of use, or what economists call the “benefit principle.” Charges tied to use are fair for two important reasons: higher income people tend to use (in this case, drive) more than others, and therefore will end up paying more. Also, charges tied to use enable people to lower the amount they pay by changing their behavior.

7. Don’t buy the phony safety card. We’ll hear all about the need to spend money to make our streets safer. The safety argument is an all-purpose smokescreen to justify almost any expenditure, no matter how distantly related to safety. (Ostensibly, the $3.5 billion Columbia River Crossing project was justified as a “safety” project, even though the I-5 bridge had a lower crash rate than the Fremont Bridge). Here’s the key fact of street safety: Smaller, slower streets are safer. Metro’s region-wide analysis of crash data showed that fast-moving, multi-lane arterials are by far the most dangerous streets in the region for cars, cyclists, and pedestrians . The more we get people out of cars, the more crashes and injuries decline. The most effective thing we can do to improve safety turns out to be the cheapest: implement features that slow and calm traffic, and make walking, cycling, and transit more attractive.

Correction:  Commissioner Steve Novick points out correctly  that his proposal contains a specific list of laudable safety projects that he proposes undertaking with street fee proceeds if his proposal is adopted.  These projects don’t fall into the “phony safety” category outlined above.  My apologies if this commentary implied otherwise.  Still, voters should consider two other things.  First, while the proposed list is a good one, it is “preliminary and subject to change” and isn’t binding on future city commissions, and the “safety” category is an elastic one.  Safety projects are defined as those that “reduce the likelihood of a person being killed or injured and address the perception of risk.”  Second, transportation money is very fungible.  Its always possible to re-arrange the budget to tell someone that this “new” money is only being used for good purposes.   The larger question is the overall priorities for the entire transportation budget.  If safety spending out of current revenues is reduced, the net gain could be less than advertised.(Revised, 10.20 PM January 8).

8. Don’t write off the gas tax yet. There’s a widely repeated shibboleth that more fuel-efficient vehicles have made the gas tax obsolete. Despite its shortcomings as a revenue source—chiefly that it bears no relationship to the time of day or roadway that drivers use—there’s nothing wrong with the gas tax as a way to finance street maintenance that a higher tax rate wouldn’t solve. While other methods like a vehicle-miles-traveled fee make a lot of sense, the reason they’re popular with the transportation crowd is because they would be set high enough to raise more money. And there’s the rub: people are opposed to the gas tax not because of what is taxed, but because of how much they have to pay. As an incremental solution to our maintenance funding shortfall, there’s a lot to like about a higher gas tax: it requires no new administrative structure, it’s crudely proportionate to use, and it provides some incentives for better use of streets. So when very serious people gravely intone that the gas tax is “obsolete” or “politically impossible”—you should know what they’re really saying is that people simply don’t want to pay more for streets.

Transportation and urban livability are closely intertwined. Over the past few decades it has become apparent that building our cities to cater to the needs of car traffic have produced lower levels of livability. There are good reasons to believe that throwing more money at the existing system of building and operating streets will do little to make city life better. How we choose to pay for our street system can play an important role in shaping the future of our city. As Portlanders weigh the different proposals for a street fee in the coming months, they should keep that thought at the top of their minds.

Metro’s “Why Bother” Climate Change Strategy

Posted on by Joe Cortright

If you’ve hung around enough espresso joints, you’ve probably heard someone order a “tall, non-fat decaf latte.” This is what baristas often call a “why bother?” That would also be a good alternate description for the Metro Climate Smart Communities Plan.

Framed in glowing rhetoric, the plan purports to be a two-decade long region-wide strategy for meeting our responsibility to address this serious global problem. But in reality it sets goals so low that they actually call for reducing the pace at which we’re reducing driving and greenhouse gas emissions.

This weak plan is all the more surprising given the area’s history. The Portland area has long prided itself on being a forward-looking first mover, when it comes to seriously addressing climate change. More than two decades ago the City of Portland became the nation’s first local government to adopt a greenhouse gas reduction plan.

It’s increasingly apparent that climate change is a serious menace. Now, Portland’s elected regional government is working on a new effort to develop what it calls a “climate smart communities plan.”

Transportation is the region’s single largest source of greenhouse gases, so it makes sense to focus on transportation. Metro’s plan sets a number of targets to guide regional transportation planning that in theory might help the region reduce its carbon emissions from transportation over the next two decades. The key performance measure is “vehicle miles traveled,” or VMT– basically a count of how much driving we do in the region. Right now, the average Portland area resident drives about 19 miles per person per day. There are a lot of ways to measure the transportation system–bike mode share, number of bus hours, total number of transit passengers, counts of pedestrians. But if you have to pick one number that tells you how car-dependent and emissions heavy your transportation system is, it’s VMT. And by the rules of thumb prescribed by transportation engineers, VMT levels translate in a very straightforward way into the “need” for more roads capacity for cars. If VMT goes up, they’ll say, you need more roads. If it goes down, you’ll need less.

Over the past decade, Portland has made good progress in reducing VMT. Since 2006–when we drove about 20.1 miles per person per day, we’ve cut driving at an average annual rate of about 1.7 percent per year. Since 1996–a period that includes an era of much cheaper gas prices–driving has fallen about 1 percent per year. But that was all in the past when we were un-enlightened and pretty un-motivated about the threat of climate change. Now that we’re serious–and we’re “smart” about this issue– we’re really going to get aggressive, right? Not so much.

Metro’s plan is that we reduce driving by a grand total of an additional two miles per person per day between now and 2035, or from a current level of 19 miles per person per day to about 17 miles per person per day. That’s right–over the the next two decades metro’s climate smart plan calls for reducing driving at about 0.4% per year–about one-fourth as fast as we have been reducing driving over the past several years without a climate smart plan. In effect, Metro’s very feeble target for VMT reductions means that they are planning for a world where there’s a lot more private car driving–and demand for roads and expensive road projects–than even current, business-as-usual trends suggest.

Rather than reducing driving, this assumption is likely to lead to an investment strategy that enables or encourages more driving that would otherwise occur if we simply assumed that recent trends continue.

To get an idea of just how feeble this planned reduction is, consider the recent travel demand forecast prepared by the Washington State Department of Transportation. They predict that over the next two decades, per capita vehicle miles traveled will decline about 1.1 percent per year. Keep in mind, this isn’t some rabid environmentalist’s stretch goal: it’s the highway department’s prediction of driving trends, without any regard to climate change. (Even this rate of decline is still only about 60% as fast as the region has managed over the past decade).

WSDOT’s baseline prediction (a decline in per capita VMT of 1.1 percent per year) would suggest that the real trend for regional driving would be a decline to 17 miles per day by 2021, and a further decline to 14 miles per person per day by 2035.

Whatever this is, it should be apparent that it’s nothing resembling bold climate leadership; if anything it is technocratic foot-dragging, providing an opaque statistical rationalization for actually slowing the rate of progress we’ve already made as a region in addressing the problem of climate change.

And there’s one more thing the Metro largely plan overlooks. Reducing VMT doesn’t just reduce carbon emissions. It also saves the region’s households money. Lots of money. Cutting VMT by additional one mile per person per day would save the region’s households roughly $250 million per year, every year, in reduced fuel and auto costs. Setting a more aggressive target for VMT reductions would actually be good for the local economy–because it would mean local consumers have more money to spend on things other than cars and gasoline.

My colleagues working in the education field often talk of the “soft bigotry of low expectations”–that we don’t ask much of students from challenged schools, and that as a result, they have little incentive or motivation to dramatically improve their performance. The Portland region has a proud history of being a risk-taking pioneer in the environmental field, with its original goal of reducing greenhouse gases, implementing an urban growth boundary and cleaning up the Willamette. Arguably, this is the time to be bold. If it were serious, Metro could explore setting a goal of reducing driving to twelve or even ten miles per person per day by 2035. It’s likely that the public savings from lower road construction costs and the household savings from less spending on cars and gasoline would add up into billions of additional resources for the local economy–not to mention lower greenhouse gas emissions.

Climate change may be the most profound existential challenge we’ve ever faced, but the proposed Metro plan sets the bar for progress so low as to be meaningless. There’s certainly nothing in this plan that expresses any ambition to do more than is already baked in the cake. In fact, it does a lot less than we’ve managed with no plan, and a lot less that our neighbors to the North predict will happen, even with no further policy intervention. Paradoxically, it may end up being used to plan for higher levels of driving than can reasonably be forecast to occur if we do nothing. There are a lot of phrases that could be used to describe such a plan, but “climate smart” isn’t one of them.

Why bother?

Parking: The Price is Wrong

Posted on by Joe Cortright

One of the great ironies of urban economies is the wide disparity between the price of parking and the price of housing in cities. Almost everyone acknowledges that we face a growing and severe problem of housing affordability, especially in the more desirable urban neighborhoods of the nation’s largest and most prosperous metropolitna areas.  As we’ve frequently pointed out at City Observatory, much of this affordability problem is self-inflicted, due to the severe limits that local zoning codes put on new development.  In sharp contrast, to the high cost of housing is the low, and mostly zero price we charge for parking in the public right-of-way.  This under-pricing of parking is a central and unacknowledged problem in urban transportation: The price is wrong. Underlying traffic congestion, unaffordable housing, and the shortage of great urban places is the key fact that we charge the wrong price for using roads.

the-carey-price-is-wrong_design

Nowhere are the effects of mispriced roads more apparent than on-street parking. Only for car storage do we regularly allow people to convert a scarce and valuable public space to exclusively private use without paying for the privilege. In neighborhoods that don’t charge for on-street parking, we have have a system that can only be described as socialism for private car storage. The public sector pays for the entire cost of building and maintaining roads, and even in dense urban settings with high demand, we allow cars to occupy those without paying a cent.

As chronicled in painstaking detail by the godfather of parking wonks, UCLA professor Don Shoup, free parking encourages additional driving, reduces the vitality of urban neighborhoods, makes it harder for local retailers to survive and needlessly drives up the cost of housing. A growing number of urbanists are coming to embrace Shoup’s viewpoint, spelled out in his 700-page tome “The High Cost of Free Parking,” but many of us still cling to the outdated illusion that parking is and should forever be “free.”

For the most part, the pitfalls of poorly priced parking go unrecognized and unexamined — we get stuck in congestion and complain about the shortage of parking. But we don’t typically recognize how the wrong price is the root cause of these problems.

Every once in a while though, there’s an event that shines a bright light on the consequences of parking socialism, and demonstrates how getting the prices right can fix things in a hurry. The most recent example is Portland Oregon’s reform of its handicapped parking system.

For years, the rampant abuse of Portland’s generous handicapped parking system was obvious and well-known. On downtown streets, a blue handicapped placard traditionally entitled users to park for free, as long as they liked. In Oregon, all that is required to get a handicapped permit is a note from one’s doctor and a trip to the DMV. As casual visitors to downtown have observed, entire blocks were occupied from early morning until night by rows of cars, each with a deep blue handicapped placard hanging in its rear view mirror.  In an apparent epidemic of frailty, the number of handicapped permits in use in downtown Portland almost doubled between 2007 and 2012. In September 2013, handicapped placard users occupied fully 1,000 of the central city’s 8,000 metered on street spaces.  Portland’s situation is hardly unique, the City of San Francisco reports that 20 percent of its on-street parking spaces are occupied by vehicles with handicapped parking permits.

In July 2014, that all changed. Led by Commissioner Steve Novick (full disclosure: Steve is a long time friend), the city limited free parking to wheelchair users who possessed a special permit. Those with generic handicapped placards can still largely ignore maximum time limits, but they have to pay for the space they use. The city even created special “scratch off” parking tags so that users wouldn’t have to walk to meters to pay:  you can see all the details of the new system here.

Overnight, the parking landscape in downtown Portland changed. Spaces occupied by placard users dropped 70%. Getting the price right freed up 720 parking spots for other, paying users, expanding the effective supply of parking by nearly 10%. The results of the change are described in a report prepared by the Portland Bureau of Transportation.

Press reports of the days following the policy reported an eery abundance of vacant on-street parking spaces.

Two weeks after Portland began charging drivers with disabled placards to park in the city’s metered spots, enforcement officer J.C. Udey says he doesn’t recognize his downtown beat. The days of patrolling block after block — after block — lined with the same cars displaying blue placards appear to be over. “It’s open spaces,” he said. “We have so much more parking.”

Brad Gonzalez of Gresham, who was shopping at the Portland Apple Store on Monday, said he couldn’t remember the last time he found a curbside parking spot in downtown so easily. “I found one right away near the store,” Gonzalez said. “It used to be about circling the block and getting lucky, and getting frustrated. Most of the spots were taken by cars with disabled parking signs. It was obvious that there was a lot of abuse.”

The change is even more remarkable in the heart of the central business district. I looked at the six most central parking beats in the city—for those familiar with Portland, an area bounded by Burnside Street on the north, the Willamette River on the east, Jefferson and Market Streets on the south, and 10th and 11th Avenues on the west. (These are beats 1,2,3,4,6 and 11). This area contains a total of about 1,850 on-street metered parking spaces. A year ago, 450 spaces–nearly a quarter of them–were occupied by vehicles with handicapped placards. That’s fallen to 105 placard users–a reduction of 75 percent from the free-parking era. This is the equivalent of adding about 350 parking spaces to the supply of street parking in the heart of downtown Portland.

Freeing up on-street parking spaces makes the transportation system work better: people don’t circle endlessly searching for a “free” parking space; paying customers eager to make purchases can park closer to their destinations, and local governments can use meter revenue to make improvements to the neighborhood that make it more pleasant for residents.

The city’s new report doesn’t spell out how much additional revenue the city stands to make as a result of the change.  A good rough estimate would be that the city nets about $10 per meter per business day; if so, it would clear an additional $1.4 million per year (700 meters times $10 times 200 business days). Parking meter revenues help pay for street maintenance and improvements, which the city says are badly under-funded—so this change will help reduce that gap.

Portland’s Bureau of Transportation is currently undertaking an effort to study and recommend new parking tools policies for city neighborhoods. Hopefully they recognize the lessons from pricing handicap spaces downtown and apply sensible pricing schemes in other areas to make the city’s neighborhoods even greater.

The larger lesson here should be abundantly clear: charging users for something approaching the value of the public space that they are using produces a transportation system that works better for everyone. When we get the prices right, or even closer to right, good things happen. We can’t solve our parking problems until we admit that when it comes to city streets, the price is wrong.   

Parking: The Price is Wrong

Posted on by Joe Cortright

There is a central and unacknowledged problem in urban transportation: The price is wrong. Underlying traffic congestion, unaffordable housing, and the shortage of great urban places is the key fact that we charge the wrong price for using roads.

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Nowhere are the effects of mispriced roads more apparent than on-street parking. Only for car storage do we regularly allow people to convert a scarce and valuable public space to exclusively private use without paying for the privilege. In neighborhoods that don’t charge for on-street parking, we have have a system that can only be described as socialism for private car storage. The public sector pays for the entire cost of building and maintaining roads, and even in dense urban settings with high demand, we allow cars to occupy those without paying a cent.

As chronicled in painstaking detail by the godfather of parking wonks, UCLA professor Don Shoup, free parking encourages additional driving, reduces the vitality of urban neighborhoods, makes it harder for local retailers to survive and needlessly drives up the cost of housing. A growing number of urbanists are coming to embrace Shoup’s viewpoint, spelled out in his 700-page tome “The High Cost of Free Parking,” but many of us still cling to the outdated illusion that parking is and should forever be “free.”

For the most part, the pitfalls of poorly priced parking go unrecognized and unexamined — we get stuck in congestion and complain about the shortage of parking. But we don’t typically recognize how the wrong price is the root cause of these problems.

Every once in a while though, there’s an event that shines a bright light on the consequences of parking socialism, and demonstrates how getting the prices right can fix things in a hurry. The most recent example is Portland Oregon’s reform of its handicapped parking system.

For years, the rampant abuse of Portland’s generous handicapped parking system was obvious and well-known. On downtown streets, a blue handicapped placard traditionally entitled users to park for free, as long as they liked. In Oregon, all that is required to get a handicapped permit is a note from one’s doctor and a trip to the DMV. As casual visitors to downtown have observed, entire blocks were occupied from early morning until night by rows of cars, each with a deep blue handicapped placard hanging in its rear view mirror.  In an apparent epidemic of frailty, the number of handicapped permits in use in downtown Portland almost doubled between 2007 and 2012. In September 2013, handicapped placard users occupied fully 1,000 of the central city’s 8,000 metered on street spaces.

In July, that all changed. Led by Commissioner Steve Novick (full disclosure: Steve is a long time friend), the city limited free parking to wheelchair users who possessed a special permit. Those with generic handicapped placards can still largely ignore maximum time limits, but they have to pay for the space they use. The city even created special “scratch off” parking tags so that users wouldn’t have to walk to meters to pay:  you can see all the details of the new system here.

Overnight, the parking landscape in downtown Portland changed. Spaces occupied by placard users dropped 70%. Getting the price right freed up 720 parking spots for other, paying users, expanding the effective supply of parking by nearly 10%. The results of the change are described in a new report released by the Portland Bureau of Transportation.

Press reports of the days following the policy reported an eery abundance of vacant on-street parking spaces.

Two weeks after Portland began charging drivers with disabled placards to park in the city’s metered spots, enforcement officer J.C. Udey says he doesn’t recognize his downtown beat. The days of patrolling block after block — after block — lined with the same cars displaying blue placards appear to be over. “It’s open spaces,” he said. “We have so much more parking.”

Brad Gonzalez of Gresham, who was shopping at the Portland Apple Store on Monday, said he couldn’t remember the last time he found a curbside parking spot in downtown so easily. “I found one right away near the store,” Gonzalez said. “It used to be about circling the block and getting lucky, and getting frustrated. Most of the spots were taken by cars with disabled parking signs. It was obvious that there was a lot of abuse.”

The change is even more remarkable in the heart of the central business district. I looked at the six most central parking beats in the city—for those familiar with Portland, an area bounded by Burnside Street on the north, the Willamette River on the east, Jefferson and Market Streets on the south, and 10th and 11th Avenues on the west. (These are beats 1,2,3,4,6 and 11). This area contains a total of about 1,850 on-street metered parking spaces. A year ago, 450 spaces–nearly a quarter of them–were occupied by vehicles with handicapped placards. That’s fallen to 105 placard users–a reduction of 75 percent from the free-parking era. This is the equivalent of adding about 350 parking spaces to the supply of street parking in the heart of downtown Portland.

Freeing up on-street parking spaces makes the transportation system work better: people don’t circle endlessly searching for a “free” parking space; paying customers eager to make purchases can park closer to their destinations, and local governments can use meter revenue to make improvements to the neighborhood that make it more pleasant for residents.

The city’s new report doesn’t spell out how much additional revenue the city stands to make as a result of the change.  A good rough estimate would be that the city nets about $10 per meter per business day; if so, it would clear an additional $1.4 million per year (700 meters times $10 times 200 business days). Parking meter revenues help pay for street maintenance and improvements, which the city says are badly under-funded—so this change will help reduce that gap.

Portland’s Bureau of Transportation is currently undertaking an effort to study and recommend new parking tools policies for city neighborhoods. Hopefully they recognize the lessons from pricing handicap spaces downtown and apply sensible pricing schemes in other areas to make the city’s neighborhoods even greater.

The larger lesson here should be abundantly clear: charging users for something approaching the value of the public space that they are using produces a transportation system that works better for everyone. When we get the prices right, or even closer to right, good things happen. We can’t solve our parking problems until we admit that when it comes to city streets, the price is wrong.   

Is Portland really where young people go to retire?

Posted on by Joe Cortright

Forget the quirky, slacker stereotype, the data show people are coming to Portland to start businesses.

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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, the largest concentration of microbreweries of any large city in the US.

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.

Photo courtesy of Frank Fujimoto at Flickr Creative Commons