Oregon

The Big Moves: Where People Are Moving

Wendell Cox — Fri, 11 Dec 2020 20:29:01 -0500

For decades, New York has been the leading exporter of people to other states, though has been severely challenged since 2000 by California. During five years around the housing bust, more net domestic migrants left California than New York. Then, for a time, California’s annual losses were not quite as severe, but were restored to the largest loss in 2019, according to Census Bureau estimates.

There has been considerable publicity about the net domestic migration losses of from 2010 to 2019: New York (minus 1,380,000), California (minus 912,000), Illinois (minus 866,000) and New Jersey (minus 491,000), and about the many who relocated to the most popular destinations, Florida (1,230,000), Texas (1,146,000), North Carolina (476,000) and Arizona (453,000).

Yet, as the list of the 50 biggest moves below shows, some of the strongest moves are fairly local and not often highlighted. A review of the biggest moves --- the net population migrating between states (and the District of Columbia) reveals that the top 10 such pairs, represent more than one-third of all the 2019 net domestic migration in the nation (about 785,000), according to American Community Survey data. This concentration compares to the overall possible pairs of more than 2,500 (such as Alabama to Arizona and Arizona to Alabama, etc.). The four largest losing states (New York, California, Illinois and New Jersey) are large, ranking first, fourth, sixth and 11th in population. Even so, their net domestic outmigration rates all rank in the top ten (Figure 1).

Among the 10 pairs with the greatest net migration of net migrants (in migration minus out migration), just four states account for all of the largest losses: California (holding 4 positions), New York (3), New Jersey (2) and Illinois (1). The destination states are far more dispersed, with 8 states represented in the top ten. Two states appear twice, the year’s net domestic migration leader Florida, and rather surprisingly Pennsylvania, which has been one of the slowest growing states for decades

Leaving California: The largest interstate move in 2019 was from California to Texas, with a net migration of 45,200 residents. California also sent a net 31,500 residents to Arizona, the third largest loss, 20,900 to Nevada, the sixth largest loss and 20,700 to Oregon, the eighth largest loss. Interestingly, the three of the four largest number of leavers went to the states that border California, while the largest number was attracted by Texas, with its major metropolitan areas more than 1,000 miles away.

The most likely driver of this migration is California’s high cost of living. Each of the recipient states have a lower cost of living than California, with its excessively high housing costs and high taxes. Not surprisingly, better housing affordability (lower house prices relative to incomes) is strongly related to net domestic migration (Figure 2). Housing costs represent more than 85% of the cost of living difference between higher cost metropolitan areas (like in California) and the national average (Figure 3) and housing affordability is strongly related to net domestic migration. Moreover, Arizona also has an advantage with its strong attraction to retirees.

Leaving New York (and New Jersey): Movers from New York to Florida accounted for the second largest volume (38,500). But many New Yorkers are moving to nearby states. The fourth largest number of net migrants left New York for New Jersey (26,700) and the fifth largest number left New York for Pennsylvania (24,000). Another 12,600 New Yorkers relocated to adjoining Connecticut, which ranked 21st among the larger migration pairs. Nearby New Jersey, which gained so many New Yorkers, itself gave up 20,900 residents to Pennsylvania, while Maryland sent 7,300 residents to Pennsylvania (ranked 37th), one county ofwhich is in the Washington-Baltimore combined statistical area (commuting zone or CSA). The keystone state was the somewhat surprising domestic migration winner in the Northeast.

Leaving Illinois: There were strong movements out of Illinois to nearby states, including 19,200 net movers to adjacent Indiana, the 9th largest move. Another 10,400 exited northward to adjacent Wisconsin. This, like the New York area, could be at least partially a pre-pandemic flight away from density, with Chicago CSA core county Cook and its four adjacent counties accounting for nearly 70% of the huge Illinois state outmigration since 2010.

Moving to States in the Northeast: Much of New Jersey and counties both in northeastern Pennsylvania and western Connecticut are within the New York CSA. It seems likely that some of this migration reflects households seeking less dense, and more affordable, surroundings. This is even before the pandemic, with the strong movement reported from denser portions of urban areas to suburbs and exurbs. The city of New York, far and away the nation’s densest urbanization, experienced a net domestic outmigration of 900,000 between 2010 and 2019, accounting for 65% of the state loss (according to Census Bureau estimates).

Big Moves Between Attractor States: Even the states that attract the most domestic migrants can lose migrants to other states. For example, domestic migration leader Florida lost 15,100 residents to Texas (the 12th largest move). Second largest attractor Texas lost 14,100 net residents to Colorado (the 16th largest move). Tennessee, a strong gainer, attracted 7,000 residents from Florida and 5,200 from Texas.North Carolina, which has been the third strongest gainer in this decade lost 6,200 migrants to neighboring South Carolina in 2019 (the 45th largest move).

The Moving Across the Nation and Across the State Line

Net domestic migration continues to be principally to the South, the intermountain West and the Pacific Northwest, with most destinations having a lower cost of living than California or New York. Yet, as indicated above, that is not all the story. There are still strong moves within regions and sub regions, throughout the Northeast and Midwest, as the strong moves to Pennsylvania, Connecticut, Wisconsin, New Jersey and Indiana attest. The big flight may be from New York and California to places like Texas and Florida, but the story is more nuanced and complex than is often supposed.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Mayor Tom Bradley appointed him to three terms on the Los Angeles County Transportation Commission (1977-1985) and Speaker of the House Newt Gingrich appointed him to the Amtrak Reform Council, to complete the unexpired term of New Jersey Governor Christine Todd Whitman (1999-2002). He is author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life and Toward More Prosperous Cities: A Framing Essay on Urban Areas, Transport, Planning and the Dimensions of Sustainability.

Photograph: Moving from New York: Pennsylvania suburbs (Pike County), by author.

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Net Domestic Migration

Top 50 State to State Moves: 2019

Rank	FROM-TO	Net Movers	Rank	FROM-TO	Net Movers
1	California-Texas	45,172	26	Illinois-Wisconsin	10,381
2	New York-Florida	38,512	27	Illinois-Florida	9,891
3	California-Arizona	31,487	28	Illinois-California	9,393
4	New York-New Jersey	26,722	29	Washington-Arizona	9,373
5	New York-Pennsylvania	23,977	30	California-Utah	9,317
6	California-Nevada	20,889	31	New York-Georgia	8,703
7	New Jersey-Pennsylvania	20,850	32	Maryland-North Carolina	7,955
8	California-Oregon	20,662	33	New Mexico-Texas	7,663
9	Illinois-Indiana	19,172	34	Virginia-California	7,512
10	New Jersey-Florida	16,190	35	Maryland-Pennsylvania	7,283
11	Pennsylvania-Florida	15,336	36	New York-South Carolina	7,247
12	Florida-Texas	15,064	37	Maryland-Florida	7,065
13	California-Washington	14,909	38	Massachusetts-New Hampshire	6,992
14	Illinois-Texas	14,641	39	Florida-Tennessee	6,966
15	California-Colorado	14,265	40	Illinois-Colorado	6,698
16	Texas-Colorado	14,106	41	Massachusetts-Florida	6,696
17	Ohio-Florida	13,745	42	New Jersey-Georgia	6,540
18	New York-North Carolina	13,724	43	Missouri-Kansas	6,380
19	California-Idaho	13,350	44	Indiana-Florida	6,249
20	New York-California	13,235	45	North Carolina-South Carolina	6,200
21	New York-Connecticut	12,566	46	Pennsylvania-North Carolina	6,120
22	Oregon-Washington	12,373	47	Illinois-Tennessee	6,089
23	Michigan-Florida	11,727	48	California-Tennessee	6,011
24	New Jersey-North Carolina	11,003	49	California-Florida	5,936
25	Illinois-Georgia	10,828	50	New Jersey-Delaware	5,889
Data Derived from American Community Survey

Low-Density Fire Buffer

Randal OToole — Fri, 25 Jan 2019 00:33:35 -0500

Someone in Bend must be reading this blog, or at least thinking along the same lines. In 2017, after the Wine Country fires had burned homes in Santa Rose, the Antiplanner noted that the problem was the homes were too dense and needed a buffer of low-density homes around them. I made the same point after the Camp Fire burned homes in Paradise.

Now Deschutes County is zoning a buffer between Bend and the national forest for low-density housing. The zone calls for one home every 2.5 acres, which is probably not dense enough — one home every acre would be sufficient and would make it more likely that homeowners would treat their entire properties to minimize fire risk.

The land that Deschutes County is zoning as a fire buffer is outside of Bend’s urban-growth boundary. Under Oregon land-use planning rules, lands outside of but adjacent to the boundary may be zoned “rural residential” with 5- to 10-acre minimum lot sizes. It is likely that the county is going for 2.5-acre lot sizes because it fears it couldn’t get away with one-acre lot sizes.

In addition to the large lot sizes, the new zoning will require homeowners and subdivisions to have “dedicated open space” and “wildfire prevention mitigation plans.” As the Antiplanner noted a decade ago, homes built to “shelter-in-place standards” can survive the worst wildfires. In fact, they are so safe that residents are encouraged to stay in their homes rather than evacuate. This is the type of development Deschutes County should encourage between the national forest and the city.

While many free-marketeers object to zoning of any kind, this is one situation where zoning creates huge positive externalities. If low-density development of a buffer area can protect more conventional Bend neighborhoods from suffering the fate of those in Santa Rosa, the benefits may outweigh the costs. In this particular case, the county is upzoning from the ultra-low-density zoning that preceded it, so the rural landowners benefit as well.

Ironically, after fires failed to harm homes in southern California shelter-in-place neighborhoods, a representative of the California Department of Forestry and Fire Protection criticized developers for building such homes because they encouraged people to live in fire-prone areas. But, as the fires in Santa Rosa, Paradise, Malibu, and elsewhere demonstrated, most of California is fire-prone; the solution is to build low-density fire-proof neighborhoods and use them as a buffer around denser cities.

This piece first appeared on The Antiplanner.

Randal O’Toole (rot@ti.org) is a senior fellow with the Cato Institute and author of the new book, Romance of the Rails: Why the Passenger Trains We Love Are Not the Transportation We Need, which was released by the Cato Institute on October 10.

Photo credit: The National Guard [Public domain], via Wikimedia Commons

By Law, California High Speed Rail May Be Doomed To Fail

Ronald Stein — Wed, 12 Dec 2018 00:33:38 -0500

It has been 10 years since passage of California Proposition 1A the High-Speed Rail Act that approved the $9.95 billion bond, a down payment on a high-speed rail project that was optimistically estimated by proponents at that time to cost $40 billion. Today, the California high-speed rail cost may approach $100 billion. Public enthusiasm is obviously dwindling.

Supporters of the Los Angeles-to-San Francisco high-speed rail line hope that erecting part of the line now will make future governors less likely to abandon the project. The entire 800-mile line is scheduled for completion by 2033. There is no shortage of obstacles to what even the project’s biggest boosters call an ambitious timetable, including the engineering challenge of tunneling through the Tehachapi Mountains, a seismically active barrier between the Central Valley and Los Angeles.

In addition to the continuous cost overruns and schedule delays, by law, the State will not operate the train, nor subsidize its operation. Once built, the State will seek an operator of the completed project, through competitive bidding. State law says that the system MUST OPERATE WITHOUT A TAXPAYER SUBSIDY, but according to a Reason Foundation study, there are more than 100 bullet trains worldwide and except for the one or two that operate profitably, all require subsidies, thus the end results for California’s high speed rail is that it will most likely necessitate taxpayer subsidies or higher fares per mile, or both.

Beginning construction without all of the financing in place represents a strategic gamble by the rail authority, and by Governor Brown, that once enough work is completed, future leaders may be intimidated to abandon the project and leave a landscape of unfinished pillars, viaducts, bridges and track beds. Faced with reduced resources, the authority has altered its plans, and is now focused on finishing a 119-mile stretch of track from Bakersfield to Madera by 2022.

The continued delays and rising costs have fueled criticism that California, perhaps the most prosperous state in the nation, is squandering money on a transportation project that critics describe as a prime example of big government waste in a state controlled by Democrats.

For all the construction, the project faces the ever-present threat that a future governor may decide that state resources would be better used dealing with, to name one example, the housing, homeless and poverty crisis. Governor Jerry Brown, a big proponent, is leaving office at the end of the year.

The coastal elites who support “going to green electricity” at all costs just don’t care that the working poor and struggling middle class living away from California’s coast are bearing the brunt of higher energy costs. “Clean electricity” doesn’t run the military, airports, cruise liners, supertankers, ports, and transportation industries, nor does electricity produce 6,000 products from petroleum that are used by every infrastructure, that are made from the chemicals and by-products that are manufactured from crude oil. The inconvenient truth about AB 32 the Global warming initiative, as well as Cap and Trade and its extension to 2030, is that we now have higher gasoline prices and higher electricity costs.

Since our state has the worst poverty rate in the nation where 1 out of 5 California families are barely hanging on, it’s hard to understand the time and effort being extended on the subject of the emissions crusade that is obviously negatively impacting our poverty and homeless populations.

Driving or flying from a multitude of airports can be done at virtually any time of day, but the inflexibility of how many train departure times would be available from a limited number of trains would impact the convenience factor offered by cars and planes and thus also adversely affect train ridership. The snowballing effect of lower ridership would be higher fares for those that do use the train as there would be no state subsidies available. Lower ridership would further impact the ROI risks for invested capital.

Just like the land line phones that have become obsolete as a result of cell phone technologies, future travel needs may be impacted in the coming decades as a result of the ever growing virtual world for office workers and online classes for students. There is also a rise of alternatives to both private automobiles and public transit, such as Uber and bicycling, and the coming evolution of driverless vehicles.

The latest business plan of completing a high speed rail between San Francisco and Los Angeles that cannot be subsidized by law is essentially a going-out-of-business plan that is discussed in a Reason Foundation Due Diligence Report.

However, once the high speed rail is ever operating, and the realization that subsidizing funds may be required to augment ridership income, future leaders will be loath to walk away from the $100 billion project and you can bet on it that Californians will be further burdened with subsidizing costs, or some form of greenhouse gas offsets paid for by businesses to pay for the trains operation!

This piece originally appeared on CFACT.

Ronald Stein is Founder and Ambassador for Energy & Infrastructure at PTS Advance, a technical staffing agency headquartered in Irvine.

Bridges Boondoggle, Portland Edition

Aaron M. Renn — Sat, 26 Oct 2013 01:38:04 -0400

A couple weeks ago I outlined how the Ohio River Bridges Project in Louisville had gone from tragedy to farce. Basically none of the traffic assumptions from the Environmental Impact Statements that got the project approved are true anymore. According to the investment grade toll study recently performed to set toll rates and sell bonds, total cross river traffic will be 78,000 cars (21.5%) less than projected in the original FEIS. What’s more, tolls badly distort the distribution of traffic that will come such that the I-65 downtown bridge, which is being doubled in capacity, will never carry just what the existing bridge carries right now anytime during the study period, and won’t exceed the design capacity even slightly until 2050. Meanwhile, the I-64 bridge that will remain free will grow in traffic by 55% by 2030, when it will be 34% over capacity.

A nearly identical scenario is playing out in Portland with the $2.75 billion I-5 Columbia River Crossing. Joe Cortright of Impresa consulting unearthed the information through freedom of information requests looking into the investment grade toll study on that is being conducted for that bridge. You can see his report here (there’s also a summary available).

I’ll highlight some of his truly eye-popping findings. Traffic forecasts are inflated, of course. The toll study is suggesting traffic increases of 1.1% to 1.2% per year when over the last decade traffic has actually declined by 0.2% per year on average even though there are no tolls. But it’s the addition of tolls that badly distort cross-river traffic and make a mockery out of the EIS. Here’s the money chart for the I-5 bridge itself:

How is it possible that after building a gigantic multi-billion dollar bridge traffic declines? For the same reason as Louisville: tolling will cause huge amounts of traffic to divert to the I-205 free bridge. By 2016 traffic on I-205 would rise from 140,000 per day to 188,000 – and up to 210,000 by 2022 (full capacity).

This is so eerily similar to the Louisville situation, that someone suggested, only half in jest I suspect, that they must be having “how to” training sessions on this stuff over at AASHTO HQ.

Unlike Louisville, where a docile press is basically in cahoots with the state DOTs pushing the project, Portland’s media started asking questions. And one local paper even caught a civil engineering professor from Georgia serving on the independent review board for the project labeling the tolling scheme “stupid.” (Louisvillians take note).

Oregon DOT director Matt Garrett released a letter in response in which he says, “This work is fundamentally different than the traffic analysis completed for the Final Environmental Impact Statement, and with very different goals in mind.” I agree. The FEIS was performed with the goal of getting this bridge the DOT wanted built approved. The toll study was designed to withstand financial scrutiny on Wall Street and be relied on in selling securities. I’ll let you be the judge of which is more likely to be closer to the truth. What’s more, Cortright addresses this very issue by saying in his report, “Neither federal highway regulations nor federal environmental regulations authorize or direct using multiple, conflicting forecasts for a single project, or using one set of traffic numbers for one purpose, and a different set for another.” I might also add that the DOTs in Louisville have not to the best of my knowledge made similar claims to explain away an identical discrepancy there. Nevertheless, the rest of Garrett’s letter acknowledges that I-5 will see a big traffic drop and there will be diversion from tolling. So he appears to just be doing the bureaucratic equivalent of “pay no attention to that man behind the curtain.”

Again, want to know how it is that we spend so much money on transport infrastructure and get so little value? It’s because far too many of our highway dollars go into boondoggle mega-projects ginned up through political pressure (watch this space as I have another example coming soon) instead of into projects that make transportation sense. It may well be that there are legitimate problems with the existing I-5 river crossing, but these numbers give no confidence that the Oregon DOT has come up with a good or cost-effective plan for dealing with them. Unlike some, I do think we need to build more roads in America. Unfortunately our system is set up to ensure the survival of the unfittest instead of projects that make actual transportation and economic sense.

Aaron M. Renn is an independent writer on urban affairs and the founder of Telestrian, a data analysis and mapping tool. He writes at The Urbanophile, where this piece originally appeared.

Photo of current Columbia River crossing by Jonathan Caves.

Portland Metro's Competitiveness Problem

Wendell Cox — Wed, 29 Sep 2010 23:04:51 -0400

Portland Metro's president, David Bragdon, recently resigned to take a position with New York’s Bloomberg administration. Bragdon was nearing the end of his second elected term and ineligible for another term. Metro is the three county (Clackamas, Multnomah and Washington counties) planning agency that oversees Portland's land use planning and transportation policies, among the most stringent and pro-transit in the nation.

Metro's jurisdiction includes most of the bi-state (Washington and Oregon) Portland area metropolitan area, which also includes the core municipality of Portland and the core Multnomah County.

Local television station KGW (Channel 8) featured Bragdon in its Straight Talk program before he left Portland. Some of his comments may have been surprising, such as his strong criticism of the two state (Washington and Oregon) planning effort to replace the aging Interstate Bridge (I-5) and even more so, his comments on job creation in Portland. He noted "alarming trends below the surface," including the failure to create jobs in the core of Portland "for a long time."

Bragdon was on to something. Metro's three county area suffers growing competitive difficulties, even in contrast to the larger metropolitan area (which includes Clark and Skamania counties in Washington, along with Yamhill and Columbia counties in Oregon). This is despite the fact that one of the most important objectives of Metro's land use and transportation policies is to strengthen the urban core and to discourage suburbanization (a phenomenon urban planning theologians call "sprawl").

Anemic Job Creation: Jobs have simply not been created in Portland's core. Since 2001, downtown employment has declined by 3,000 jobs, according to the Portland Business Alliance. In Multnomah County, Portland's urban core and close-by surrounding communities, 20,000 jobs were lost between 2001 and 2009. Even during the prosperous years of 2000 to 2006, Multnomah County lost jobs. Suburban Washington and Clackamas counties gained jobs, but their contribution fell 12,000 jobs short of making up for Multnomah County's loss. The real story has been Clark County (the county seat is Vancouver), across the I-5 Interstate Bridge in neighboring Washington and outside Metro's jurisdiction. Clark County generated 13,000 net new jobs between 2001 and 2009 (Figure 1).

Domestic Migration: Not only are companies not creating jobs in the three county area, but people are choosing to locate in other parts of the metropolitan area.

Between 2000 and 2009, the three counties – roughly 75% of the region’s total population in 2000 – attracted just one-half of net domestic migration into the metropolitan area. Washington's suburban Clark County, across the Interstate Bridge, added a net 48,000 by domestic migration and has accounted for 40% of the metropolitan area's figure all by itself.

Core Multnomah County, which had nearly double Clark County's 2000 population, added only 4,000 net domestic migrants, at a rate less than 1/20th that of Clark County. Suburban Clackamas and Washington counties did better, but between them achieved barely one-half of the Clark County rate.

Exurban Columbia and Yamhill counties, outside the jurisdiction of Metro but inside the metropolitan area, added nearly 13,000 domestic migrants, more than three times that of Multnomah County, despite their combined population less than one-fifth that of Multnomah's in 2000.

Effects of Pro-Transit Policies: Portland's unintended decentralization has even damaged the much promoted, and subsidized, public transit agencies. Despite Portland's pro-transit policies, the three county transit work trip market share fell from 9.7% in 1980, before the first light rail line was opened, to 7.4% in 2000, after two light rail lines had opened. Two more light rail lines and 9 years later, (2009) the three county transit work trip market share had fallen to 7.4%, despite the boost of higher gasoline prices. The three county transit work trip market share loss from 9.7% in 1980 to 7.4% in 2009 calculates to a near one-quarter market share loss. By contrast, Seattle's three county metropolitan area, without light rail until 2009, experienced a 5% increase in transit work trip market share from 1980 to 2009 (8.3% to 8.7%).

While taxpayer funded transit was attracting less than its share of new commuters out of cars, one mode –unsupported by public funds - was doing very well. Between 1980 and 2009, working at home rose from 2.2% of employment to 6.2%. in the four county area (including Clark County). Thus, nearly as many people worked at home as rode transit to work in 2009 (Note). Already, working at home accounts for a larger share of employment than transit in the larger 7 county metropolitan area. All of this is despite Portland's having spent an extra $5 billion on transit in the last 25 years on light rail expansions and more bus service. (Figure 2).

Why is the Three County Area Doing Less Well? Why have Portland's policies that are designed to help the core failed to draw jobs and people? People who move to the Portland area from other parts of the nation are probably drawn by the lower house prices in Clark County, where less stringent land use regulation has kept houses more affordable. New housing in Clark County is also built on average sized lots, rather than the much smaller lots that have been required by Metro's land use policies. House prices are also lower in the exurban counties outside Metro's jurisdiction.

As Metro has forced urban densities up in the three county area and failed to provide sufficient new roadway capacity, traffic congestion has become much worse. A long segment of Interstate 5 in north Portland seems in a perpetual peak hour gridlock unusual for a medium sized metropolitan area, which is obvious from Google traffic maps that show average conditions by time and day of week. Even more unusual is the gridlock on a long stretch of the US-26 Sunset Highway that serves the suburban Silicon Forest of Washington County. A long overdue expansion will soon provide some relief on US-26. However transportation officials seem in no hurry to provide the additional capacity necessary to reduce both greenhouse gas emissions and excessive travel delays on Interstate 5 in north Portland. People who move to Clark or the exurban counties can avoid these bottlenecks by working closer to home or even in the periphery of the three county area.

Portland has important competitive advantages, such as a temperate climate and marvelous scenery. It also helps to be close to hyper- uncompetitive California, which keeps exporting households to neighboring states. But a higher cost of living driven by policies that have kept prices 40% higher than before the housing bubble (adjusted for household incomes), and increasing traffic congestion make Portland's three county area less competitive and nearby alternatives more attractive.

This is not surprising. More intense regulation deters business attraction and expansion. An economic study by Raven Saks of the Federal Reserve Board concluded that … metropolitan areas with stringent development regulations generate less employment growth. At least part of the reason the Metro region’s diminished competitiveness lies with a failed strategy that appears to be having the exact opposite effect to what has been advertised – and widely celebrated – among planners from coast to coast.

Note: 1980 three county data not available on-line.

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”

Photograph: South Waterfront Condominiums, Portland. Photo by author

Welcome to Ecotopia

Joel Kotkin — Tue, 23 Feb 2010 00:35:39 -0500

In this era of tea-partying revolutionary-era dress-ups, one usually associates secessionism with the far right. But if things turn sour for the present majority in Washington, you should expect a whole new wave of separatism to emerge on the greenish left coast.

In 1975 Ernest Callenbach, an author based in Berkeley, Calif., published a sci-fi novel about enviro-secessionists called Ecotopia; a prequel, Ecotopia Rising, came out in 1981. These two books, which have acquired something of a cult following, chronicle--largely approvingly--the emergence of a future green nation along the country's northwest coast.

Aptly described by Callenbach as "an empire apart," this region is, in real life, among the world's most scenic and blessed by nature. Many in this part of America have long been more enthusiastic about their ties to Asia than those with the rest of the country. It is also home to many fervent ecological, cultural and political activists, who often feel at odds with the less enlightened country that lies beyond their soaring mountains.

Until the election of Barack Obama, the Pacific Northwest certainly was separating from the rest of America--at least in attitude. After George W. Bush's victory the 2004 presidential election, the Seattle weekly The Stranger published an angry editorial about how coastal urbanites needed to reject "heartland values like xenophobia, sexism, racism and homophobia" and places where "people are fatter and dumber and slower."

Such a narrow, cynical view of the rest of the country is in line with Callenbach's Ecotopia novels, in which the bad guys--representatives of American government and corporations--are almost always male, overweight and clueless about everything from technology to tending to the earth.

Of course, would-be Ecotopians have much of which to be proud. The three great cities of the region--San Francisco, Portland and Seattle--easily rank among the most attractive on the continent. They all boast higher-than-average levels of education and--at least around San Francisco and Seattle--some of the world's deepest concentrations of high-tech companies.

Yet for all their promise, the Ecotopian regions cannot claim to have missed the current recession. Downtown Seattle currently suffers a vacancy rate in excess of 20%, the highest in decades; last year apartment rental rates dropped 13.8%, the steepest decline among American metros. Meanwhile vacancies in the Silicon Valley area south of San Francisco have soared to above 20%. By early this year, there was enough unoccupied office space in the Valley to fill 15 Empire State Buildings.

This may seem a bit counter-intuitive for a region that boasts the headquarters of Microsoft, Costco, Amazon, Intel and Apple. But while such companies provide lots of high-wage employment, they are no longer enough to spark much growth across the region's economy. The San Francisco area has actually lost jobs over the past decade and shows little sign of recovering its once prodigious growth rates.

But easily the weakest of the economies has been Portland, which lacks the presence of major anchor firms like those in greater Seattle or the Bay Area. Portland's unemployment rate has been well over 10% since late last year.

A wave of youthful migration has made the city a slacker haven for the past decade and, in turn, exacerbated unemployment figures. Homeless kids now crowd the downtown area, which, although far from destitute, does appear pretty grungy in places.

Yet, like the Ecotopians in the Callenbach novels, Portland residents and politicians seem nonplussed about their anemic economic performance. After all, the city voted heavily--despite solid opposition from the rest of the state--to raise Oregon's taxes on wealthy individuals and corporations, a move likely to deter new in-bound investment.

"You don't have a big focus here on economic development," observes Stephen B. Braun, dean of the School of Management at Portland's Concordia University. "There's much more emphasis on quality of life than on making a living."

The proof: Portland may have high unemployment, but the big idea around city hall is not how to promote jobs but about investing an additional $600 million in bike lanes.

All these places, of course, avidly endorse green jobs even if there's little prospect they could replace the jobs being lost in the fading blue-collar sectors. A growing green job sector needs a vibrant economy that produces things and builds new buildings, notions that have little currency across much of the region.

This anti-growth attitude reflects that of Callenbach's Ecotopia, which favors a "stable state" economy over job or wealth creation. Ecotopian politics explicitly ban both population increases and the private automobile.

While the mayors of Portland, San Francisco and Seattle are hardly that extreme, they could propose policies that would make driving more burdensome. And they certainly seem to do wonders in chasing would-be baby-makers out of the city. All three cities have among the lowest percentages of children of any in the U.S.

Perhaps the toughest issue facing the Ecotopian political economy lies with the issue of class. Callenbach's Ecotopia adopts something of an anarchic socialism; the cities of the real ecotopia have tended toward ever greater class bifurcation.

San Francisco, for example, boasts one of the highest per capita incomes in the nation and remains a favorite destination for inherited wealth, whether among individuals or nested in nonprofits. Yet according to the Public Policy Institute of California, if the cost of living is applied, San Francisco ranks high among urban counties in terms of its concentration of poverty.

It doesn't help that the city's economy has been hemorrhaging corporate headquarters and mid-range middle-class jobs for decades. High-end workers commute to Google and other Valley companies, and others work in the financial or media sectors, but many mid-range jobs have been lost, many of them to more affordable business-friendly locales in places like Colorado.

As middle-class jobs disappear, Ecotopia's cities increasingly resemble restrictive communities that are anything but diverse. As analyst Aaron Renn has pointed out, Portland and Seattle stand as among the whitest big cities in the nation. And San Francisco's once vibrant African-American population has been dropping for decades.

In the coming years this pattern will likely become more pronounced in Seattle and Portland as well. These cities continue to attract many well-educated people, particularly from California, who in turn bring with them both significant accumulated wealth and anti-growth attitudes.

Strict "green" planning regimes are also accelerating the decline of the local middle class by driving housing prices up, greatly diminishing the once wide affordability for the middle class. Seattle's regulatory environment, according to one recent study, has bolstered housing prices in the region by $200,000 since 1989. The percentage of families who could afford a median price home in the area has fallen by more than half.

Many observers see a similar outcome from Portland's widely ballyhooed planning regime. Despite the massive acceptance by planners as something of a model for the restored city, the vast majority of all job and population growth in the region has occurred at the less pricey fringes, including across the river in Vancouver, Wash., which lies outside the fearsome Portland planning regime.

So what is the future for the region, and particularly the eco-cities? If the country starts moving toward the center, and even the right, you can expect Ecotopian sentiment to rise again, perhaps not to the point of secession but expressed in attitude.

But this may not be all bad. As America's population grows and other regions rise, perhaps it's helpful for the various parts of the country to experiment with different systems. Short of civil war, there's something to be said for relentless, even if sometimes daft, experimentation at the local level. The rest of country may not follow all their strictures, but our would-be Ecotopians could produce some interesting and even usable ideas.

This article originally appeared at Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

Atlanta: Ground Zero for the American Dream

Wendell Cox — Fri, 12 Feb 2010 00:24:31 -0500

The Atlanta area has much to be proud of, though it might not be obvious from the attitudes exhibited by many of its most prominent citizens. For years, local planners and business leaders have regularly trekked to planning’s Holy City (Portland) in hopes of replicating its principles in Atlanta. They would be better saving their air fares.

Money Better Spent by Government than People? Most recently, Jay Bookman of the Atlanta Journal Constitution wonders whether taxes are high enough in Georgia and seems envious of the fact that Oregon’s voters approved tax increases in a recession, despite months of having one of the highest unemployment rates in the nation. Perhaps they were naïve enough to believe that the higher taxes would not stand in the way of attracting new business to the state. Or, perhaps the voters believed that, as a neighbor to basket case California, Golden State businesses might still flee to Oregon as an expensive but less congested environment (Note 1).

Portland Transit: Nothing to Emulate: Bookman is also envious of Portland’s transit system with its light rail and commuter rail. Perhaps he is unaware of the “pecking order” of transit. Atlanta’s MARTA is superior to Portland’s MAX light rail in virtually every respect. MARTA a world class Metro. It is fully grade separated and averages about 70% faster than MAX, which is a revival of abandoned streetcar technology. It is thus not surprising that MARTA carries three times as much passenger demand as MAX, despite a total route length approximately the same as in Portland. Despite MARTA’s superiority to MAX, both the Atlanta and Portland transit systems share the transit curse of excessive costs. Atlantans are paying far less to subsidize their transit system than if they had unwisely, like Portland, extended it and taxed residents throughout the suburbs.

Portland’s Embarrassing Commuter Rail Line: And, commuter rail does not appear to be a matter of pride in Portland at this point. Portland’s one commuter rail line celebrated its first year anniversary recently. Before the line opened, Tri-Met transit officials estimated that the line would “have 2,400 riders a day as soon as service begins.” The Wilsonville to Beaverton WES commuter rail line, however, never came close to that number. Daily ridership has been under 1,200. But the relative paucity of riders did not interfere with the transit agency’s spin and the media’s general sheepish agreement. At the one year anniversary a Tri-Met spokeswoman commented that “When you think about having 55,000 jobs lost in the region, that translates into fewer transit riders throughout the system and particularly during rush hour.” However, nowhere near the half of riders that failed to show for WES cannot be blamed on Portland’s high unemployment rate. If Portland were to return to unemployment levels of a year ago, WES would likely add no more than 50 daily riders.

So, recession-ravaged Portland has built a commuter rail line that carries, at best, 0.5% of the capacity of adjacent freeways when it operates. Moreover, it has been costly. The line costs about $60 per passenger, only $2.50 of which is collected in fares. This means that the annual subsidy per passenger is nearly $15,000, almost enough to pay the annual mortgage cost on two median priced Atlanta homes.

Portland Traffic Congestion Worse than Atlanta: Atlanta is renowned for its traffic congestion, which is a direct result of its failure to invest in the type of arterial grid that could provide substantial relief for its less than robust freeway system. Yet, based upon the latest Inrix National Traffic Scorecard, (GPS collected data for 2009), there is less peak period travel delay (as measured by the Travel Time Index) in Atlanta than in Portland, which is a reversal from data earlier in the decade (see note).

Atlanta: Adding a New Zealand: Atlanta has no reason to look to Portland as a model, or anywhere else, for that matter. Coming out of World War II, the Portland metropolitan area was larger than the Atlanta metropolitan area (1950). Since that time, Portland has grown strongly, adding 1.5 million people. Atlanta has added more than three times as many people. The result is an economy that produces at least $150 billion more in wealth every year than Portland. Thus, the difference between Atlanta and Portland is more than the gross domestic product of New Zealand. For at least the last two decades, Atlanta has been the fastest growing large metropolitan area in the high-income world.

Atlanta: Land of Opportunity: But perhaps the biggest draw about Portland for Atlanta leaders is its “growth management” (so-called “smart growth”) land use policies. Portland has drawn an urban growth boundary around its urbanization. Its land regulators commission “sun rises in the West” studies to deny the fact that this rationing of land increases house prices. There is, however, no question of the impact of more restrictive land use policies, from the World Bank to members of central bank boards to decorated economists such as Kat Barker of the Bank of England and Donald Brash, former governor of the Reserve Bank of New Zealand.

The result is superior housing affordability. Late in the year, the median house price in Atlanta was 2.1 times median household incomes (the Median Multiple). By comparison, the Median Multiple in Portland was 4.2, indicating that house prices are twice as high relatively speaking in Portland. In 1990, before Portland implemented its more stringent smart growth policies, housing affordability in Portland was about equal to Atlanta.

But there is more to the story. Portland’s heavy handed planning policies are distorting product offerings so much that only the richest can afford more than a miniature back yard. This is illustrated by the images of new housing developments below in the suburbs of Portland and Atlanta (below). Both pictures are taken from approximately 1,500 feet above the ground.

In the Portland example, virtually on the fringe of the urban area (the next urbanization is at least 10 miles away); houses are stacked in at more than 15 to the acre, with just a few feet between the roof-lines - vaguely reminiscent of third world shantytowns (Note 2). The more traditional suburban development that characterizes most of Portland is also shown on three sides of the overly dense new development.

In the Atlanta example, houses have been recently built at about 4 to the acre, which has been the American suburban norm (except where land use regulations have required larger lots). The emerging sameness of Portland’s housing gives new meaning to the “ticky tack” criticism of suburbanization.

Our 6th Annual Demographia International Housing Affordability Survey found Atlanta to be the second most affordable metropolitan area with more than 1,000,000 residents and the 17th most affordable metropolitan area out of 272 markets in six nations. Portland ranked 180th. Atlanta is truly a land of opportunity for young households and lower middle income households that can never hope of owning their own home in Portland’s pricey, growth management driven market.

Rather than being a shameful example of metropolitan disaster, Atlanta remains one of the diminishing number of American urban areas where the American Dream can still be offered at a price that middle income households can afford. Atlanta has also emerged as one of the world’s best examples of ethnic diversity, not only in the core but also in the suburbs. More than half of the new residents in the suburbs have been non-Anglo since 1990 in Atlanta, about which it can proud. Atlanta is inferior only in the quality of is public relations and self-understanding. It should be a required stop for planners from Portland and beyond, for remedial education on injecting humanity and aspiration back into urbanization.

Note 1: Bookman also notes in his column that Portland’s traffic congestion has not worsened at the rate I predicted in a 1999 Atlanta Constitution oped. I had not anticipated the huge gasoline price increases, which have materially reduced the rate of traffic growth virtually everywhere and made previous congestion increase rates unreliable as predictors of future growth.

Note 2: For example, see the similar rooflines in a Dhaka shantytown near Gulshan at 23:47 North and 90:24 East in Google Earth. The principal difference in roof lines is the Dhaka slum’s lack of streets and cars, both of which seem consistent with the anti-mobility stance of “smart growth” planning.

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”

Photo: hyku

California Disease: Oregon at Risk of Economic Malady

Joel Kotkin and Bill Watkins — Mon, 17 Aug 2009 17:25:07 -0400

California has been exporting people to Oregon for many years, even amid the recession in both states.

Indeed, the 2005 American Community Survey report shows that California-to-Oregon migration was 56,379 in 2005, the sixth-largest interstate flow in the United States. The 2000 census showed a five-year flow of 138,836 people, the eighth-largest over that time period. Until two years ago, Oregon was managing to absorb this population with mixed results, but generally as part of an expanding and diversifying economy. But that pattern has ended, at least for now.

So now what will Oregon do with a suddenly excess population? California, at least, can say its emigres over time will reduce unemployment and reduce out-of-whack property prices. The immediate net benefits for Oregon are harder to discern.

California's massive economic collapse -- which has resulted in 926,700 jobs lost from July 2007 through June 2009 and an unemployment rate of 11.6 percent -- is now becoming Oregon's problem. As Californians, largely for lifestyle and cost reasons, head north across the border, they have helped swell Oregon's ranks of both unemployed and, perhaps equally important, underemployed.

Our analysis of California migrants has shown a gradual reduction in their earnings over what they were earning in the Golden State. There also are less quantifiable impacts. Portland, a city attractive to many unemployed and underemployed younger Californians, could well be becoming the "slacker" capital of the world.

There's another major problem with the continuing California migration. Along with young people, newcomers to the state also include large numbers of the retired and semi-retired. These people generally have little interest in economic growth, whether for longtime state residents or their fellow, often younger emigres. Instead what they bring with them are political attitudes that could slow down the state's economic recovery.

Some might call this California disease. This refers to a chronic inability to make hard decisions as well as a general disregard for business and economic activity.

California's inability to plan or create new public infrastructure affects every part of the state's economy. California was once a leader in building infrastructure, but that was in Pat Brown's gubernatorial administration in the 1960s when California last planned a major infrastructure project.

There are consequences to California's inability to deal with infrastructure. Its freeways are parking lots. Its water problems are threatening the viability of Central Valley agriculture, one of the key drivers of the state's economy. Its electrical system is so bad that every summer brings the fear of interruptions in the supply of electricity. Its universities are in decline. Its prisons are overcrowded.

Another symptom of California disease is regulation and red tape that increases the uncertainty for any project and raises the cost.

California projects can be in planning for years, and at the end of that planning process they may still be denied. The long delays are expensive. And as many would-be California developers will tell you, the uncertainty is a strong detriment to economic activity and development.

We also see symptoms of California disease in tax policy. California no longer has the United States' highest income tax rate. Big deal. With a top income tax rate of 10.3 percent, sales taxes that can reach 10.25 percent and a 33.9 cents-per-gallon gas tax, its total taxes are among the highest in the country.

California's regulatory climate also reflects the disease. Even as the state endures its most brutal recession in decades, it persists in unilaterally imposing new regulation, making the state less competitive with other states.

In short, California is whistling past the graveyard, hoping that its economy will rebound, "because it always has."

Key symptoms of California disease are forgetting that quality of life begins with a job and negative domestic migration.

With all the influx of Californians, it's not surprising that Oregon shows some signs of California disease. It recently increased its tax rates so that Oregon's highest-income taxpayers face marginal tax rates that match Hawaii's for the highest in the nation. Oregon's land-use planning had been extremely centralized for some time. Indeed, Oregon's land-use planning may be the most centralized in the United States. This makes it harder for communities to control their own destinies, whether they want to grow or not.

If Oregon does have California disease, the malady is surely not as advanced as it is in California. Oregon has lower gasoline taxes and lower property taxes than California. Oregon, in contrast with California, enjoys net positive domestic migration. It is also a good sign that a significant percentage of the people moving to Oregon from California are young folks. While it seems to many that the typical California immigrant is a wealthy aging baby boomer, the data show that he (or she) is still most likely a young person in his 20s or 30s, and often married with children. They are people who, if the economy grew, could have something to contribute to the economy as well as the cultural development of the state.

But Oregon's relationship with California remains a double-edged sword. On the one hand, Oregon has benefited from the inflow of cash and skilled workers. On the other hand, Oregon's relationship with California has led to the current situation where at 12.2 percent for the month of June, Oregon has one of the highest unemployment rates in the United States.

Oregon may be at a crossroads. The state is richly endowed with many of the components of a high quality of life. People want to live in Oregon, and they are moving to Oregon even in hard times. Yet as the population swells, there's no concurrent growth in businesses and employment. Over time, this could pose serious problems. Remember, quality of life begins with a job, preferably a rewarding, well-paying job.

However, Oregon must avoid making many decisions that led to California's current situation. The costs of California disease are more than those reflected in the economic statistics. Devastated communities and families, and wasted opportunities, could infect this fair state for years to come.

Joel Kotkin is author of "The City: A Global History." Bill Watkins is director of the Center for Economic Research and Forecasting at California Lutheran University.

Oregon Fail: With Hard Times Ahead for Business and Real Estate, It's Time to Look Small

Joel Kotkin — Tue, 17 Feb 2009 00:03:11 -0500

There is something about Oregon that ignites something close to poetic inspiration, even among the most level-headed types. When I asked Hank Hoell recently about the state, he waxed on about hiking the spectacular Cascades, the dreamy coastal towns and the rich farmlands of the green Willamette Valley.

"Oregon," enthused Hoell, president of LibertyBank, the state's largest privately owned bank, from his office in Eugene, "is America's best-kept secret. If quality of life matters at all, Oregon has it in spades. It is as good as it gets. It's just superb."

As developer Shelly Klapper, a rare skeptic in the Beaver State, reminded me: "This is a state that buys its own hype."

Hype or not, however, Oregon is hurting – something that's clear to even the most self-respecting narcissist. Over the past year, Oregon's economy has fallen off a cliff just about as fast as any state in the union.

A year ago, things seemed very different. Sunbelt boom states like California, Arizona and Nevada were already heading into deep recession, but green Oregon seemed oddly golden. Both its small cites and one big town, Portland, were outperforming the national norms. Oregonians saw their state as better – not only in terms of green and good, but also in terms of basic job growth.

But since last winter, Oregon's unemployment rate has soared from barely 5.5% to well over 8%, the sixth worst in the nation. Indeed, according to a recent projection by the University of California at Santa Barbara (UCSB), Oregon's jobless rate could reach close to 10% by the end of the year.

Well into 2010, Oregon's overall economy will shrink more rapidly than the nation's as a whole, notes UCSB forecaster Bill Watkins. He traces a sharp downturn there to many factors, including one of the toughest regulatory regimes in North America.

In tough times, companies generally expand in localities that are friendly to commerce – say, states like Texas or nearby Idaho. Few would rate Oregon highly in that regard.

"Oregon is mostly a place that focuses on the enjoyment of its space, and that makes [it] very vulnerable in these conditions," Watkins says.

The other big problem has to do with a lack of economic diversity. Oregon has been through tough times before. For much of its history, the state's economy depended largely on harvesting its vast forests. Then, in the 1980s, the state developed a green bug, and decided it shouldn't chop down Mother Nature for a living.

In the ensuing decade, Oregon pioneered tough land-use regulations, curbing industries that relied on forest products and declaring war on suburban sprawl. Its main city, Portland, became the poster child of the "smart growth" movement by forcing up density, building an extensive light-rail system and restoring its urban core.

Although widely praised, these stringent regulations also drove up land prices and, ironically, prompted many middle-class residents to move away, including across the border into Washington. Businesses, rather than cluster in the state's core, continued to migrate to the outer rings; in the relatively healthy year of 2005, for example, barely 10% of Portland's office space growth took place in the central district.

"We give lip service to the economy here," admits Klapper, a longtime Portland entrepreneur and a former official with the Port of Portland. "But, really, business is not a priority here."

For a while, Klapper notes, the tech sector seemed to offer the solution. In the '80s and '90s, chip makers fleeing even higher costs in California flooded into Oregon, which was proudly dubbed the "Silicon Forest." In an unusual move, the state provided tax breaks to the chip makers, which helped. The state's suburbs also proved attractive to tech workers who could afford a far better quality of life there, in terms of schools and housing, than they could in the Golden State.

But as regulations tightened and costs to businesses and families increased, even the high-tech industry began to fade. Always a political bellwether state, Oregon has moved inexorably left, increasingly dominated by both its public sector and the particularly strong green movement. Semiconductor expansion soon started to go south – or in this case, further east (to Idaho) or across the Pacific to Asia.

Only one thing remained to drive the economy: housing. A torrent of Californians were heading north – cashing out of the overpriced Bay Area, Sacramento and Los Angeles – and buying new homes in Oregon. Some sophistos sashayed their way into trendy places like Portland's Pearl District, but many others looked to the charming smaller towns of the Willamette Valley and central Oregon.

"When all else failed, it was people moving here that kept us going," says Klapper, who was a major investor in the Pearl District renaissance. "California became our biggest industry."

This dependence turned into a debilitating addiction. When in 2007, the great California housing bubble collapsed, the inflow of people and dollars dropped off. Meanwhile, the remnants of lumber industry fell victim to the housing bust.

Nowhere are the effects of this clearer than in Bend, a spectacular town of 75,000 located amid volcanic peaks in the center of the state. Californians had considered Bend a favorite spot for second homes and relocation. About a year ago, notes real estate appraiser Steve Pistole, prices were rising 2% a month, while those in Portland were "only" rising 8% a year.

But to visit Bend now is to be in the eye of the housing hurricane, with nearly deserted housing tracts, woefully empty hotels and residential second-home developments. Unemployment in the housing arena, according to the UCSB, could reach 15% next year.

We can also expect a further slide in housing prices. Oregon's bubble, notes analyst Wendell Cox, inflated later than California's, so prices, which have dropped more than 10% in the last year, could fall by that much or more in the next.

Yet despite all these problems, many Oregonians remain optimistic. Some of this seems, at least fundamentally, a reflection of ideology. The inevitable huge surge of "green jobs" promised by the Obama administration has long been an article of faith in the state; it seems something like a story we'd tell our children to put them to sleep. State officials, for example, speak wistfully of replacing a recently shuttered Korean-owned Hynix chip plant with a facility to make solar panels.

The bad news is this: 49 other states – some of which don't pose such strong regulatory challenges – also hope to bring home some of these green jobs. So if business logic applies, the new factories that manufacture wind turbines, propellers or solar panels will end up in states like North Dakota or Texas, which have been the most successful, thus far, at attracting other manufacturing jobs.

So what trail should Oregon blaze now? Pistole, the real estate appraiser, says it may be time to think small. Places like Bend, he notes, already attract former Silicon Valley veterans who like living close to trout streams, hiking trails and golf courses.

"There is no magic bullet for Oregon," says Pistole, who himself moved from California just three years ago. "But there could be lots of onesies, twosies, mom-and-pops. People still want to live here. We have to make it synergistic to live where you want and still make money. That's the way we need to go."

Some entrepreneurs, like 38-year-old Michael Taus, are already setting up such small shops, some of them in their homes. A recent arrival from Los Angeles, Taus made it big as one of the founders of Rent.com, which was sold to eBay in 2005. He's only lived in Bend for a few months, but he has already launched his own start-up and consults for several other local firms.

Taus believes others of his generation will want to establish businesses in Oregon, lured by both its lifestyle and affordability. Some of the new business may be in software, Taus says, but others could sprout in specialty agriculture, wood products and other industries.

"People are here for a reason. There's a good amount of talent, and you can get more here," he says earnestly. "There's a great potential. We just have to get down to business."

This article originally appeared at Forbes.

Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.

Oregon’s Immigration Question: Addressing the Surge in the Face of Recession

Ilie Mitaru — Fri, 30 Jan 2009 00:19:21 -0500

The men huddle outside the trailer, eyeing the passing traffic. Handmade signs stapled to telephone posts speak for them: “Hire a Day Worker!” The site, a fenced-in lot at Northeast MLK and Everett Street, was launched in 2007, a testament both to Oregon’s recent immigration boom and lack of federal reform.

Since then, Obama’s historic campaign, several wars and a global recession have pushed the immigration question from the national headlines. But in Oregon – where the surging migrant population is on a crash course with a withering economy – the issue is bound to reignite.

Oregon’s economic boom, which started later than that in the rest of country, has ended. Unemployment has risen considerably. Oregon’s 9.0 percent unemployment rate was the nation’s 6th worst in December 2008 according to the Bureau of Labor Statistics.

At the eye of the storm have been losses in the construction industry, a major employer of immigrants. The hard times there will put new pressure on local legislators and law officials to “clean out immigrants”. Oregonians should not give in to such misguided temptations. Oregon’s immigrants have played a historic role in enriching the state’s economy and can continue to do so if given the opportunity.

Oregon’s immigration explosion is relatively new. The state’s foreign-born make up 9.5 percent of the population, with more than 60 percent of the immigrant population arriving after 1990, according to 2005 census data.

The influx of Latinos to the state is even more recent. Estimates place 75 percent of Latinos coming between 1995 and 2005. Unlike other immigrants who tend to concentrate to urban and suburban areas, Latinos are dispersing across Oregon. Between 1990 and 2000, the Latino population doubled in 21 of Oregon’s 36 mostly-rural counties. Agriculture employment, cheap housing, and existing Latino communities attract the rural migration.

Within the Portland metro area, the largest concentrations of foreign-born population live in Southeast Portland (Ukrainians, Russians, Romanians), Northeast Portland (Vietnamese, Africans), and Central Portland (Asians, Eastern Europeans), according to a study by the Urban Institute. Notably, more Russians and Ukrainians moved to Oregon’s suburbs between 2000 and 2005 than to any other region in the nation, according to a recent University of Oregon study.

Currently, immigrants total over 11 percent of the state’s labor force, up from 5.4 percent in 1990. Yet native unemployment did not increase during this time period.

One reason for this, argues MIT’s Tamar Jacoby in a recent Foreign Affairs article, is that the immigrant workforce should be viewed as complementary rather than competitive to the native workforce. For example, the business owner who can hire housekeepers and landscapers can devote more time to growing his business, and to leisurely expenditures that support other local businesses.

Oregon’s diverse agricultural industries – ranking third nationally for labor-intensive crops – offer a more concrete example of the complimentary nature of immigrants.

The state is home to a $325 million dairy and cattle milk production industry, a $778 million nursery and greenhouse industry, a $380 million fruit and nut industry, and a $200 million wine industry. All are primarily staffed by immigrants. In this case, immigrant labor allows Oregon’s agricultural sectors to thrive in the face of fierce import competition.

Immigrants have historically had a strong entrepreneurial spirit. Nationwide, 25.3 percent of technology and engineering companies had at least one foreign born key founder, based on a Duke University study. Often with few resources or formal education, immigrant entrepreneurship can foster new kinds of services. The abundance of landscaping businesses and nail salons is a testament to such ingenuity. In 2005, over 6,000 Latino and 400 Slavic entrepreneurs operated throughout the Portland metro area, according to one University of Oregon study.

Beyond providing jobs and fueling local economies, immigrant entrepreneurs bring the benefits of globalization to places like Oregon. They encourage trade and investment from their connections abroad.

Immigrants pay taxes, buy houses, food, cars, and clothes just like native residents. Even illegal immigrants – which many immigration-demagogues label as the real problem – have taxes withheld from their paychecks. They also otherwise bring money to the state through sales taxes on local purchases. A study by the Oregon Center for Public Policy found that undocumented immigrants contribute between $134 million and $187 million in taxes annually to Oregon’s economy. These numbers represent only those coming from undocumented workers and exclude the significant investments made through entrepreneurship, agricultural support and the continual purchase of goods and services.

Yet serious immigration reform is needed. A large portion of immigrants spends only stints working in the states, frequently sending money back home. The consequences of this go beyond the obvious fiscal drain. The stint worker will invest minimally in learning English, will often share rent in decrepit neighborhoods, and spend as little as possible in order to maximize savings for abroad.

The problem facing Oregonians is not immigration per se – or even illegal immigration, which constitutes only 10 percent of the migration to the state. The real problem is stint immigrants, who invest little in the long-term health of their new communities and the economy of the state.

The curious delusion about this point is that current federal legislation includes temporary-worker permits as key to reform. By giving only temporary permits to immigrants who might otherwise be coaxed into permanent stay, Washington is explicitly discouraging acculturation and encouraging capital drains.

In large part, the real solution to the downsides of immigration lies in the permanent integration of Oregon’s new residents. When these residents feel they may be here permanently – without constant threat of deportation – they will be more likely to invest in their new communities and futures.

Even the state’s recent job-shedding should not derail Oregonians’ historic acceptance of foreign residents. Oregon’s immigrants will stabilize agriculture and other service industries by providing cheap labor through hard times.

If the incoming administration manages the recession correctly, Oregon’s economy will soon recover. To rebound quickly, the state will need to employ thousands – natives and immigrants – in the infrastructure and Green packages coming from Washington. Oregon’s post-recession economy, like its pre-recession economy, will depend on immigrant labor.

A comprehensive understanding of Oregon’s immigration question must go beyond viewing the huddle of men on MLK and Everett every morning as mere numbers, bodies for pay.

A true understanding of the issue will surface only by looking beyond the numbers to recognize these men’s potential, resourcefulness and culture as indispensable components that once shaped our nation’s identity and will continue to mold its future.

Ilie Mitaru is the founder and director of WebRoots Campaigns, based in Portland, OR, the company offers web and New Media strategy solutions to non-profits, political campaigns and market-driven clients.