Posted by: Josh Lehner | June 22, 2018

Fun Friday: Guard the Northern Flank

Previously our office found that the Portland region continues to experience net in-migration among lower-income households. However that does not mean households are not responding to the changing housing market and moving around — either by choice or by (financial) force. As such, our office continues to be on the lookout for spillover impacts of the housing crunch. For one, we know that many displaced households in the Portland area are moving into East Multnomah County. However, if you are willing to paint with broad strokes from a tiny sample size*, we are also seeing long-time migration patterns between Portland and Salem shift as well. This is the first real sign of housing spillovers seen in the data outside the Portland region itself.

*I do mean tiny sample size. We’re talking around 20 individual household responses moving in each direction when it comes to analyzing the ACS microdata here. Some may say this is a data crime and I largely agree. However the data patterns make intuitive sense, and it is Fun Friday. Do take these results with a grain of salt.

Our office’s talking point has been that Oregon used to send it’s natural resources from the rural ares, up the Willamette into Portland and then out into the world. Today those natural resource flows have largely been replaced with human resources (people). Many, young working-age Oregonians do move into the state’s urban areas. And from there many do end up in the Portland region. This includes net migration from the rest of the Willamette Valley into the Portland area. However, that pattern appears to have shifted. For the first time I can remember we are now seeing net migration out of the Portland area and into Salem (Marion County). It is not just the total number of people or households moving either. The migrants into Salem have higher incomes, much higher homeownership rates, and they are buying homes that are about 25% more expensive than what local Salem residents are buying in recent years. But those higher prices are still less than most houses in the Portland area sell for. As such, some of these shifts appear to be housing-related spillover.

Commuting patterns are another way to help gauge the spillover. While we cannot easily answer the Salem to Portland commute question, or at least not with a good enough time series to gauge trends, we do have some information. Examining commuting out of Salem to any and all metro areas — Portland yes, but also Albany, Corvallis, Eugene plus small numbers to other areas — shows that the absolute number reached a record high in 2016. However, when measured as a share of the workforce, these commuters are back to where they were prior to the Great Recession. This data is at least suggestive of spillover effects as well, or at a minimum a more integrated labor market throughout the Willamette Valley.

All told, these patterns may be at least in part driven by affordability problems in the Portland region. But they are also at least in part driven by the benefits and amenities of the Salem area. The Salem economy is booming, experiencing the best economic expansion the region has seen in at least 25 years. The job growth is strong and broad-based across industries. Household incomes are outpacing other Willamette Valley metros. Salem’s downtown is noticeably more vibrant than at any point in the past decade based on foot traffic and building remodeling activity. The region also boasts great demographics.

However, in conversation with Salem residents, realtors, and the like — you’re not going to believe this** — the concern is the relatively new Portland migrants are worsening affordability and changing the character and culture as well. Now, the Salem area is building hardly any new housing units (see slide 17.) The lack of new supply is a major problem, even more so than the return to average levels of demand.  That said, these issues are pretty much universal across the state, and no matter where I go, these housing conversations are always the same, it’s just the name or location of the new residents that changes.

** You will totally believe it.

Note: All of the above uses American Community Survey data through 2016. 2017 data is coming out this fall and our office will update some of this work when available.


  1. I suspect that somewhere between a net migration into Portland and a shift in direction to Salem lies a tipping point that will become more evident with the passage of time. When the growth in the cost of housing so far outstrips the rate of growth of incomes, something has to give. A lack of available land, burdensome building codes and rigid visions of what a home should look like (a yard, 2 car garage, etc.) only exacerbate the problem. Long commutes from more affordable exurbs is a common response, but will likely prove only temporary. At some point, as employers encounter increasing difficulty in finding qualified and affordable employees, they will become more willing to follow the migration of workers already underway. Time will tell, but I foresee a day when the trickle of migration back to smaller communities becomes more of a flood. The fact that this migration may initially favor higher paid workers is not really surprising as advances in technology have enabled many workers to work remotely, with time spent in a physical office only when necessary. Economics may be a primary driver of this shift, but I think people also long for a sense of community that is often hard to find in large urban settings.

    • *nodding head* Thanks Scott for your thoughts! Certainly sounds plausible to me. Will be interesting to see. And I know some of the autonomous vehicle optimists think their impact on resident location choices will be similar. I don’t know how this will all unfold (or not) but will be interesting to watch moving forward.

    • “burdensome building codes” … example?

  2. […] Source: Fun Friday: Guard the Northern Flank | Oregon Office of Economic Analysis […]

  3. […] Last summer our office really dug into the data, looking at migration patterns in the Willamette Valley, incomes, homeownership rates and the like. What it showed was there had been a reversal in long-term migration patterns and at least in 2015 and 2016, the net flows were from Portland to Salem. However the 2017 data released last fall was a reversal of the reversal, or a big return to historical patterns of net flows from Salem to Portland. As someone who follows the data, I was a bit stumped on the issue. […]

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