Portland, Oregon: Cash Magnet

Is Portland changing? Ask the tax man.

By Marty Patail January 2, 2014 Published in the January 2014 issue of Portland Monthly

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Image: Nomad

There are two ways to make a city grow. First, pop out babies faster than people die. Easy enough, right? Well, for the past two decades Oregon’s baby-makin’ has hovered right around the so-called “replacement rate”—about 1.98 children per mother. The other way? Throw open the doors and hope people come in. As a frontier town, Portland has always been better at the latter. 

Now people—lots of people—are flocking to Portland. Between 2000 and 2010, the city’s population swelled by 10.3 percent to 583,776, while the entire metro region grew by more than 15 percent. That’s close to the historic norm, says Uma Krishnan, a demographer for the City of Portland. “But the last two years have been really phenomenal,” she notes, saying that the city proper has added 20,000 people, a whopping 3.5 percent.

And that’s just the head count. There’s another way to track humans: follow their money. The Internal Revenue Service collects a trove of data on Americans—among other things, documenting their movements around the country. The IRS info on Portland’s new arrivals depicts an important historic change. In effect, two Portlands are emerging: one drawing diverse, wealthy transplants from across the nation and world; the other, stubbornly Northwest to its core. (Caveat: the numbers only represent people who actually pay taxes.)

Once, Portland lost wealth to the Southwest as retirees (and incomes fattened by investments and pensions) decamped to warmer climes. Whether it’s our real estate, our fine food, or just the historic heat levels parching traditionally sunny states, that pattern has reversed itself in dramatic fashion. Portland now gains $61 million annually in income moving from California, and $6 million from Arizona and New Mexico.

“People move here even during times of higher-than-usual unemployment rates,” says Risa Proehl, an analyst at Portland State University’s Population Research Center. They also tend to move from much larger, arguably more economically dynamic cities: LA, San Francisco, New York (NYC exiles’ economic footprint here has tripled since 2003—bada bing!), Chicago, and Phoenix. (The IRS numbers don’t provide details on where international transplants—who are playing a large role in driving the city’s overall population gain—come here from.) This influx rolled right over the Great Recession, sometimes-dismal employment stats be damned.

These trends suggest a place slowly turning into a pan-American urban hybrid. But then there’s the other Portland lurking in the IRS data: that age-old destination for UO graduates, Boise refugees, and bored Molallans drawn to the “Big City.” A large chunk of our incoming income—about 50 percent—gravitates here from within Oregon. Eugene, Bend, Salem, and Medford play an increasingly significant role in populating Portland. And in another monumental shift, neighboring Clackamas and Washington Counties are the largest contributors, indicating migration from the burbs to the warm, nougatty city center. 

So is Portland becoming a kind of global suburb—a haven for mobile people, their pockets afire with home equity and earnings from bigger, richer places? Or is our fate still bound to our traditional role as Oregon’s economic and cultural engine, the place that ships out the grain, ships in the Subarus, and, for all its flaws, is less boring than Boring?

The answer is probably...both. The creative-class battle cry of “lifestyle über alles!” and the politician mantra of “jobs, jobs, jobs,” are entwined harmonies in our Pied Piper’s tune. “There are a lot of places that have strong labor demand but are unappealing,” says UC Berkeley’s Enrico Moretti, author of The New Geography of Jobs. “There are more jobs than people in North Dakota. Then there are great places to live with no jobs, like Santa Barbara.” 

As we grow, the two groups uprooting themselves (and their W-2s) to Portland will need each other. The well-heeled Californians and New Yorkers bring fresh connections (and better tips). The Oregon natives keep our mossy roots strong—and as long as that is true, we can revel in our new cosmopolitan bloom.

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