The Burnside Blog

Posted By Mike Thelin on 06/05/2008

The economic forecast is rosy says the business advocacy group Greenlight Greater Portland. In its recently published 2008 Greater Portland Prosperity Index, the consortium predicts 88,000 new jobs and a population surge of 8 percent, or 175,000, over the next five years. According to the report, the Portland region will experience the most job growth in four clusters: Design (including architecture), computer software, environmental services, and electronics and alternative energy.

For the type of latent knowledge that exists in Portland, high fuel costs could be an economic advantage. While certainly painful at the pump, oil that trades at $135 per barrel and up is forcing companies to develop new technology and advance agendas for alternative energy. According to the report, Portland’s job base in alternative energy is twice the national average of medium-sized American cities. Gerding Edlen’s own green guru Dennis Wilde recently told me in an interview that he believes our foresight in the areas of green development and alternative energy amounts to the greatest economic opportunity the region has ever faced.

Job growth is good news for the droves of young people moving to Portland, which currently ranks high for its attraction and retention of recent college graduates. In the long run, however, job and population growth can be double edge swords if there’s no preparation. Affordability is one of the most often cited reason for coming to Portland, but unless a concerted effort is made to address the price of housing now, a lot of people could get priced out.

Compared with Seattle and San Francisco, Portland remains a bargain, for now. According to the report, the average one-bedroom apartment rents for $875 in the Portland area, versus $2,031 in San Francisco and $1,434 in Seattle. Of course, income is much higher in these other cities than in Portland, so I did a little math. Once salaries are taken into account, Portlanders spend 19% on housing versus Seattle’s 28% and San Francisco’s 33%. Certainly, Portland has a competitive advantage now, but as cities become more popular, housing prices generally rise.

It seems that the only way to keep housing prices low is to maximize a building’s square footage and build smaller units. But it seems that one of the draws of Portland is the ability to own or rent an Eastside bungalow and have a backyard. Will Portland still seem like a sweet deal if one has to live in 400 square feet?