Posted by: Josh Lehner | May 31, 2016

Life Cycle Housing Costs in Oregon

At a recent House Committee on Human Services and Housing, Representative Taylor asked me whether or not the people moving to Oregon, and Portland in particular, can afford to do so? In other words (my words, not hers), do they know what they are getting into regarding housing costs? I hemmed and hawed like any good economist (on one hand…) but her question stayed with me. So I dug into the underlying Census data to answer it the best I could. It turns out that yes, the new young migrant households moving to Portland can afford the rent. Rather, their incomes are effectively the same as the existing young rental households in Portland. Thus the current residents and the new residents can afford, or not afford, the rent to the same degree. (See the addendum at the end for more.)

However, Representative Taylor’s question brings to mind some recent research I’ve been doing regarding generational differences in Oregon. How do employment rates, educational attainment, and the like for the Millennials compare to previous generations in our state? However this research initially began by looking at housing costs over one’s lifetime and then by age cohort. A California version of the graph below sparked this research project. (Also, Joe Cortright at City Observatory has a great primer on lifecyle effects vs generational effects.)

How you read this graph is that each colored line represents an age or birth cohort. These are really 5 year groups, so the 1960 cohort is people born between 1958 and 1962, for example. As you move from left to right, the graph shows the median housing costs as a share of income for rental households across the state. The higher the line the more income is spent on housing.

lifecyclerent14

While it is true that younger households always spend more on housing than those in their prime-working and peak-earning years, the biggest trend that stands out is each successive generation in Oregon spends a larger and larger share of their income on housing. The same is true for homeowners and this is also true in California. This is entirely due to higher housing costs and not due to lower incomes. The typical rental household headed by a 30 year old in 1980 earned $34,000 adjusted for inflation. In 2010 a similar 30 year old rental household earned $34,800. However moving from the green or gray line (Baby Boomers) to the blue line (young Gen Xers and older Millennials) represents an increase of 6 percentage points of income spent on housing (19% to 25%). This translates into the equivalent of $175 per month increase in rents. The gap so far is even larger for the 1990 cohort thus far into their adult lives, although they are also seeing lower incomes since they came of age during the Great Recession and its aftermath.

Again, this is part of a larger research project I’ve been doing that compares and contrasts both life cycle and generational trends in Oregon over the past 40 years. I find it informative to know where we’ve come from in hopes that we can better understand where we are going regarding some of these big, mostly economic trends. In no way, shape, or form is this intended to be pro or anti any generation, even though I know there is quite a bit of that on the internets, hence my disclaimer.

Addendum: Back to Representative Taylor’s question about whether new residents can actually afford to move and live in Oregon. At the hearing I did mention that we get a mix of those using moving van lines which likely have a job and the DIYers with U-Hauls which probably do not. I also talked about how 20- and 30-somethings in Portland have the same employment rates (EPOP) as the typical large metro in the nation. The local economy is able to absorb and integrate the new residents.

However, in looking at the specific data it turns out that new, young rental households in Portland earn the same amount of income as the existing young, rental households. Thus they can all afford, or not afford, housing to the same degree. However, it is true that folks moving from outside of Oregon do have slightly higher incomes, but they also pay slightly higher rents. If it’s not just due to the margin of error, I think there are clear reasons for these patterns.

First on the rent. People who move are subject to the current market rates for housing, while those who do not move are likely in a better spot either location-wise of financially. If the rent and neighborhood are good, or even acceptable, why move until necessary? Second, one key aspect of migration in recent decades is the fact that higher migration rates are associated with higher levels of educational attainment. The influx of migrants always have more schooling, which typically translates into higher incomes. I suspect this differences in the mix of households is the reason for the higher incomes of migrants.

pdxrent14

Note: I used the 2014 ACS 5 year estimates here to get a larger sample size (n=3,999). The 2014 ACS 1 year estimates showed, broadly, the same patterns but the sample size was just 821. When you start decomposing that into out-of-state migrants, the sample shrinks to just 74 individual households with 15 from California. To the extent that the patterns in 2016 differ from 2014, then these results may not hold of course.

Posted by: Josh Lehner | May 25, 2016

Housing Does Filter

Most new construction in recent years has been at the top end of the market. This is partially due to that’s where the numbers pencil out best for developers but also because that’s where the strongest growth in households has been, in the $100,000 per year and over groups. The majority of the population cannot afford new construction today, but this has largely been the case historically as well.

However, over time housing does become more affordable as it depreciates. This is called filtering and has been a surprisingly contentious topic within the housing discussion lately. The key is that filtering does not happen overnight. It is very much a longer run process. Filtering is also one of the major ways to provide reasonably priced workforce housing for those making in or around the median family income.

To show how filtering works and put some local numbers to it, I have pulled together a couple graphs below, along with borrowing some work from ECONorthwest as well. In recent weeks I have had the opportunity to co-present with both Lorelei Juntunen and Mike Wilkerson from ECO on housing at a planners conference at Metro and the state’s House Committee on Human Services and Housing, respectively.

First, a simple graph showing median rents in the City of Portland and the overall MSA by year of construction. Clearly newer construction is more expensive and housing built in the 1960s and 1970s is the least expensive. Ownership patterns are very similar. Note that the oldest homes are also more expensive. This is largely due to the fact that only a fraction of the homes built 100 years ago remain. Those that do are generally of the best quality, have been remodeled and taken good care of.

PDXRent14

Next is a very useful graphic from ECONorthwest that shows how filtering works. It is important to keep in mind that filtering is a market rate housing process and that the supported environment operates differently. Lorelei also noted that it is not to be expected that new luxury construction filters all the way down to purely affordable housing over time. Luxury housing starts at such a high price point that filtering over a few decades can only lower costs so far. Building at a wider range of price points is also needed.

 

ECOFiltering

So you’re asking yourself, “OK, but can we actually see this in the data?” I’m glad you asked. Yes, yes you can. What I have done is look at apartments built in the 1970s in Clackamas, Multnomah and Washington counties, or the heart of the Portland MSA.

According to the 1980 Census data, these 1970s-built apartments rented at prices about 11% above the overall market. That means the newer construction in 1980 was more expensive than 2/3rds of all rentals, which makes sense because new construction is almost always more expensive. Fast forward to 2014 (the latest available ACS data). Those same 1970s-built apartments now rent at prices 6% below the overall market. That means they are priced higher than about 40% of the market today. Clearly the 1970s-built apartments have filtered down within the housing market over the past 30+ years.

FilteringBar

A key question is whether or not filtering is enough to achieve better affordability overall. The answer is no, or at least not when we are facing a supply shortage of housing. Filtering does certainly work and it does help. However, to the extent that housing is under-built relative to population growth and demand, filtering will be slower and take longer because there are not enough units to go around. That is why one linchpin to the filtering process is to continuously add housing supply, particularly in popular and growing cities and regions.

Lastly, I would like to highlight some research being done right now at the University of Oregon. Two economic students are working in a community issues capstone class to put a number to the filtering process in Eugene (Lane County) where there has been a big increase in new multifamily construction in recent years, mostly for students. How are all these new, more expensive units going to impact the overall market in the coming years and decades? When that work is finished, I will share the results because it is very interesting and timely research.

Posted by: Josh Lehner | May 19, 2016

Willamette Valley Beer Production

It’s American Craft Beer week right now so I thought I’d show a few graphs of beer production in the Willamette Valley. The data comes from OLCC reports which show only beer produced and sold in Oregon. Out-of-state sales/distributions from Oregon breweries are excluded. This has an impact on the largest brewery trends, but hardly any for the majority of the state’s breweries.

Probably the biggest trend that stands out is that the growth in recent years is entirely due to the newer start-ups. At some point a brewery effectively saturates the local market and it is hard to increase sales and distribution within the state simply because a given brewery’s product is in every store and on tap in nearly every bar or restaurant. This is most easily seen in the state’s legacy breweries like a Deschutes or a Widmer. Outside of, maybe, the specialty stores and taprooms, when was the last time you went into an eating or drinking establishment and didn’t see Deschutes or Widmer on tap? While considerably younger, this same situation applies to Ninkasi as well. After years and years of nearly exponential growth, Oregon production and sales for Ninkasi have slowed.

OK. Onto the graphs. Let’s first start with the biggest breweries in the Willamette Valley. One thing to note here is the scale used in the graph. Hop Valley produces as much beer for Oregon sales as every other brewery in the Valley combined, other than Ninkasi of course. Ninkasi itself is more than 50 percent larger than Hop Valley. So these breweries dominate regional beer production (and are among the biggest/most successful in the state as well).

LaneBeerBig15

The second graph shows the other Eugene or Lane County breweries. Here the growth due to the recent start-ups is very apparent.

LaneBeer15

Heading north, Mid-Valley beer production shows a more steady increase over the past decade. A new brewery opens about every 1-2 years and drives regional production and sales higher.

MidValleyBeer15

Further north, the Salem regional production is shown below. There are a few notes about the Salem data. First, Gilgamesh is the largest Willamette Valley brewery outside of those first three Eugene ones, and continues to grow and expand. Second, Seven Brides disappeared in the data over the past year. As far as I can tell this is a data issue only, but does skew/mislead the overall regional trends.

SalemBeer15

As slow progress continues to be made on our office’s start-up brewery report, additional regional graphs like this will follow in the coming months. The big picture trends are evident across the state. Start-ups are driving the growth. Larger breweries are growing their sales into other states and even internationally. As such, brewing is increasingly a traded-sector industry with a wide geographic footprint within the state. While Bend, Eugene and Portland may be best-known for their breweries, every region of the state has award-winning breweries and growing production and sales.

Posted by: Josh Lehner | May 12, 2016

Map of the Week: Migration

People have been moving to Oregon in droves ever since Lewis and Clark. Migration is a key driver to our economic growth and the Northwest more broadly. That is one reason our office regularly studies and discusses migration, demographics and population growth. The Pacific Northwest Regional Economic Conference (PNREC) is today and tomorrow in Vancouver, WA. I am presenting our office’s previous report on young, college-educated migration patterns (report here, state comparison summary here). For the talk I updated the following map from a couple years ago for the latest ACS data and to fix the red-green colorblindness issues.

Note that each color on the map represents approximately 1/10th of all U.S. counties. Places that are the darkest red are more than 50% migrant, while those that are the darkest blue have hardly any migrants.

StateBornMap2014

Nationally, 67% of Americans currently live in the state in which they were born (this is excluding foreign born and naturalized citizens), however in Oregon only about 50% of our population was born in the state and its even lower in our southern counties. In fact, in places like Bend, Coos Bay, Eugene, Klamath Falls, Medford, Roseburg, and many others there is a better than 50-50 chance that the next person you see was not born in Oregon. Similar patterns are seen throughout nearly all of the smaller western states.

However, across much of the U.S. people usually do not move, or at least not vary far. In the Midwest and South, the map indicates that people move one or two counties cover, which is readily apparent along state borders. Another issue along the borders is that some counties do not have hospitals. So even if your family lives in one state and you were raised there, you might have been born in a different state given that the next town over with a hospital happened to be across a state line. This does happen here in Oregon too down in Curry County on the South Coast, based on feedback from Annette Shelton-Tiderman from the Oregon Employment Department (thanks Annette).

The next map I want to create along these lines is looking at the mix of where Oregon-born, or Colorado-born, etc individuals actually live. Do most Oregonians stay in the state and our redness in the map above due to the influx of migrants? Which states have the highest or lowest rates in folks staying in place, and how do these patterns match up with in-migration trends? Stay tuned in the coming weeks for that.

Posted by: Josh Lehner | May 3, 2016

Oregon and the Business Cycle

Raise your hand if you’ve heard that Oregon lags the business cycle? Or worse yet, that Oregon falls first and recovers last? Something along these lines really does seem to be the conventional wisdom. In this case, the conventional wisdom is wrong.

While the NBER has a business cycle dating committee for U.S. recessions, no such entity exists for local or regional recessions. In the past I have used University of Oregon professor Jeremy Piger’s dating algorithm to try and gauge this. Today I want to focus just on employment, one of the only really good indicators available at the local level.

First, a quick look at employment growth in recent decades. This graph is always included in our office’s presentations as it clearly shows how Oregon fares over the business cycle.

TradAdv0216

Clearly Oregon is more volatile than the U.S. overall. We fall further in recession but grow quicker in expansion. In the good times we call this our traditional advantage. Much of the volatility comes from the state’s industrial structure (natural resources and manufacturing are very pro-cyclical) and our population growth (migration ebbs and flows with the cycle). Given that the economy spends many more years in expansion than in recession, Oregon comes out ahead over the full cycle.

This next graph shows how Oregon fares over the entire cycle relative to the U.S. by measuring employment change from one business cycle peak to the next business cycle peak.

PeakPeak2016

In most cycles since World War II, Oregon comes out ahead. This is true today as well. Right now Oregon employment is 4.9% above pre-Great Recession levels while the U.S. is 3.9% above.

There are a couple of exceptions however. In the 1980s, Oregon’s full business cycle was weaker than the U.S. due to the timber industry restructuring in the early 1980s. At the time, Oregon lost 12% of its jobs while the U.S. only lost 3% of its jobs. Another exception is during the Asian Financial Crisis in the late 1990s. While Oregon’s growth in the 1990s was stronger than the U.S., those last few years did see slower job gains (see the first graph where the dark blue line drops below the light blue line).

Ok, but how does our regional business cycle line up with the nation’s? The table below compares the month when Oregon employment peaks relative to when U.S. employment peaks for each recession since 1960.

CycleDates2016

The big takeaway here for me is that there are not many differences at all. In fact, if you average these figures, Oregon actually leads the national employment cycle both entering and exiting a recession. Oregon does not lag. Personally I would not make too much out of a couple months here or there based on the data. But the point is clear that Oregon’s business cycle is very much in sync with the U.S. cycle and Oregon does come out ahead over the full cycle.

Posted by: Josh Lehner | May 2, 2016

Oregon Manufacturing in Perspective

Just a quick update on Oregon manufacturing and the recovery. A lot of pixels have been written about the so-called manufacturing renaissance and also the growth seen in the oil patch across the nation. Our office included. However, as the oil boom has turned to bust, the regional economies are suffering losses. At least among the goods producing industries in these regions. For example, overall employment trends are still largely positive in Texas, even as the energy sector and related industries contract.

Relative to the start of the Great Recession, manufacturing in the oil patch has outperformed the rest of the nation. However job losses are mounting over the past year. The rest of the nation continues to see continued job gains, although these states have only regained about 1/3 of their recessionary losses.

Then there’s Oregon. We have regained more than half, and nearly 2/3 of our manufacturing job losses. In fact Oregon’s manufacturing sector was adding jobs at a 4 percent pace in recent years. Furthermore, the state’s manufacturing sector is in the same relative position as the oil patch states today.

ORMfgUpdate0316

What’s driving our positive trends in recent years? Well, pretty much every subsector in manufacturing. It is a broad based manufacturing recovery in Oregon. However only food manufacturing is currently at an all-time high. Most other subsectors, while growing, have yet to fully regain their Great Recession losses.

Goods16q1

All of this is certainly good news for the Oregon economy. However, a couple of notes of caution. The overall outlook remains less bright with the strong dollar and slower global economy. Furthermore manufacturing wages outside of high-tech no longer pay wages substantially above the rate of other industries. However Oregon remains a state that produces goods. Even as manufacturing jobs as a share of the all jobs continues to fall over time, Oregon manufacturing continues to make up a larger and larger share of U.S. manufacturing jobs. This business cycle is no exception.

Posted by: Josh Lehner | April 26, 2016

Portland Affordability in Comparison

This morning I am presenting some new research that compares the 100 largest MSAs in the country at the Multifamily NW Apartment Report release. The work covers how cities face tradeoffs between economic strength, quality of life and housing affordability. A city can achieve success on two but not all three dimensions at the same time. This represents what I am calling the Housing Trilemma. In advance of releasing all the material, I want to first focus on just the affordability measures.

When discussing Portland’s housing affordability, the most common way is to point out prices in other major West Coast metropolitan areas. For example, according to Census figures, Portland home values are 17% below Seattle, 39% below San Diego and 58% below San Francisco. Monthly rents show similar patterns, albeit with slightly smaller differences. So while many admit Portland’s prices are high, they’re still a bargain compared to these other locales. And this is certainly true, so far as it goes. However, adjusting housing costs by local incomes, something I would argue is a better way to measure it, Portland’s affordability looks considerably lower.

To help put Portland’s housing affordability in perspective, below I detail each of the three housing measures I used in the new research. A quick refresher on box plots, or box and whisker graphs. The box itself shows the middle 50% of all values. In this case it means the middle 50 MSAs, with 25 having lower values than the box and 25 having higher values. The middle line represents the median where half of the MSAs have higher values and half have lower values. The extended lines, or whiskers, show the minimum and maximum values across all 100 MSAs.

Price to Income Ratio

The first metric tries to gauge and compare ownership affordability across metros. Specifically this is the ratio of median home value to median household income. The longstanding rule of thumb for affordability is roughly 3 to 1 ratio. The median across the nation’s largest metros is 3.3. However Portland ranks 15th highest (or 86th lowest), just a notch below our neighbor to the north. Portland is also considerably higher than the box part of the graph, or the middle 50 metros in the country.

PriceIncBox

Going back to how we typically discuss affordability. Based on the Census figures, 13 MSAs have higher home values than Portland. 12 of those 13 also have higher household incomes. The 1 that does not – Sacramento – trails Portland by $200.

However, comparing Portland to metros with similar income levels reveals a different pattern. 31 MSAs have median household incomes that are +/-10% of Portland’s income. 28 out of these 31 metros have lower home values than Portland.

PriceIncScatter

Cost Burdened Renters

The second metric is the share of rental households that spend 30% of their income on rent, or more. This is the classic measure of being housing cost burdened. It is an imperfect measure, but is also fairly well understood and regularly used. If a household has to spend an outsized share of their income on housing, it leaves less money to pay for everything else. Here, Portland ranks 26th highest. That is, the share of rental households in Portland that spend at least 30% of their incomes on rent is higher than 74 of the 100 largest MSAs in the nation.

CostBurdenBox

The differences may not seem to be large, a couple percentage points, for example. However in practice this represents a lot of households. If, for whatever magical reason, Portland’s share dropped from its current rate to the median 51%, that would mean 10,000 fewer households that were cost burdened. Declining to Seattle’s percentage would mean 17,000 fewer households that were cost burdened.

Vacancy Rate

Portland’s vacancy rate – the share of housing units that are not occupied, after adjusting for second homes and migrant worker housing – is the 5th lowest in the nation. This encompasses both owner and rental properties.

VacancyBox

The low vacancy rate gets to the heart of the current market. There are too few units given the strong, and growing demand. In such a market, anything available at a remotely reasonable price and/or location, is gone instantaneously. The lack of supply drives prices higher, everything else equal.

Now, Portland has always had a lower vacancy rate, however the issue is much more pressing today. The region is effectively one year behind in terms of new construction relative to the population gains. A couple years back, Trulia did some work examining vacancy rates across metros. Only 13 of the 100 largest saw their vacancy rates decline from 2000 to 2013. Portland was one of those 13. Nearly everywhere else saw increasing vacancies due to the housing bubble bursting and foreclosure crisis. Portland experienced those as well, of course, however vacancies quickly declined as the economy rebounded and household formation returned.

Vacancy9014

Your mileage may vary on the specific measures used here. There are myriad alternates available. However, I think these three metrics do a good job of summarizing both housing affordability and comparing metropolitan areas across the country. The full Housing Trilemma work will be out soon, where you can pick any of the 100 MSAs and see how they compare across economic strength, quality of life and housing affordability.

Posted by: Josh Lehner | April 21, 2016

Oregon High-Tech (and Intel)

High-technology is an integral part of Oregon’s economy. It accounts for roughly 5% of statewide employment but a considerably higher share of overall wages. The sector’s average wage is more than twice the statewide average, $103,900 in tech compared to $48,300 for all industries. The sector is particularly productive and drives much of the state GDP figures, which is measured on a value-added basis. When you start with essentially raw materials and end with a semiconductor, the value-added over that process is huge.

TechShares2015

As I was updating our office’s high-tech work, the news broke that Intel, Oregon’s largest private employer, will be laying off some 12,000 workers overall. We do not know the local impact yet, but it is important to keep a few things in mind.

First, Oregon’s tech legacy and comparative advantage is on the hardware side. However this is no longer an employment growth sector. It has not added jobs since the technology bust back in the early 2000s. Specifically, our office’s outlook for computer and electronic product manufacturing was no job growth over the next decade. That was our outlook before the recent announcement. We did, however, expect the number of these highly-productive, well-paying jobs to be stable moving forward, albeit with no further growth.

Second, we still do not know the local impact of the losses. When we do we will discuss with our advisory groups and adjust our forecast accordingly. No doubt, the losses will hurt and be felt in the regional economy. However, in a way, now is a good time for terrible news. The economic winds are at our back. The state is adding 4-5,000 jobs per months in recent years and the Portland MSA (including Vancouver) is adding 3,000 jobs per month. The economy is as strong as it has been at any point in the past 15 years, both statewide and in the Portland Metro. These gains will help ease the pain.

334vOther2015

Third, over the years, being a major hub of the semiconductor industry has served the state and regional economy very well. While employment trends are flat to down locally, the rest of the country has seen losses 2-3 times as large. The hub generally outperforms the spokes.

Fourth, all of the high-tech growth in the past decade is on the software side of the industry. Most of these gains are in Multnomah County and many are associated with outposts for companies headquartered elsewhere, such as the Bay Area. This is one reason our office has some concerns about the recent software growth. Given the hardware experience over the past couple of decades, being the spoke or outpost, does increase potential losses during the next downturn or technology cycle.

Overall, high-tech is a growing and important sector in Oregon’s economy. It provides nearly 100,000 very well-paying jobs. So far the industry is successfully diversifying from our historical strength in hardware manufacturing to software. While risks remain to any industry outlook, the tech sector gains have been very encouraging.

Finally, a full set of slides are below for those interested.

Posted by: Josh Lehner | April 19, 2016

Oregon’s Total Employment Gap, March 2016

Last week’s employment report brought continued good news regarding Oregon’s labor market. The most commonly reported figure was an all-time record low unemployment rate in the state’s history. Or at least back to the 1970s when the good data begins. The only time period in Oregon’s history where our unemployment rate has been below 5% was a brief 11 month stretch in 1994-1995. That is until 2016, at least based on the initial data. Regardless of where revisions will take the data, we know Oregon’s labor market is doing quite well.

The combination of Oregon’s ongoing economic strength and dwindling, but still existent, skepticism about the data, I just wanted to take the opportunity to update our Total Employment Gap measure of the state. We first released this measure back at the beginning of 2015. The biggest benefit of this measure is it takes into account many of the common criticisms of the unemployment rate itself. The Total Employment Gap includes those working part-time but want full-time work, and it takes into account individuals who gave up looking for a job during or following the Great Recession. All told, Oregon’s Total Employment Gap is closing quickly. Currently, at around 1%, it is as small as the state has experienced since the dotcom bust back in 2001.

EmpGapTotal0316

The graphs below show each of the three individual components and their evolution over the past 15-20 years. A note about each:

  • If you are wondering how the unemployment gap can be negative, it is because the current unemployment rate is below the estimate of the natural rate of unemployment in the state. This, of course, is a rough gauge but we adjust the Congressional Budget Office’s national figure to create an Oregon version based on historical patterns.
  • Underemployment in Oregon is back to pre-Great Recession levels and rates. Both the number of and share of the workforce that is working part-time but want full-time work is back to the same numbers seen in 2005-2007.
  • The Particiaption Gap is closing. While the LFPR has rebounded strongly in recent months, it remains the largest component here. The trends are improving and the economy is pulling workers into the labor force. Yet participation remains considerably lower today than the aging demographics alone suggest.

 

EmpGap0316

When you add each of these components together, you get a better or more clear picture of the labor market. It is true that the standard unemployment rate today has lost some meaning (not all, but some) given the severity of the Great Recession and its impact on the participation rate. That is why our office uses the Total Employment Gap to gauge the strength of Oregon’s labor market. The fact that the good employment numbers are translating into stronger wages too is very encouraging.

Posted by: Josh Lehner | April 15, 2016

Suburbs Have Jobs Too

There is no question that America’s largest metropolitan areas are outperforming the rest of the nation. Job growth over the past decade is significantly stronger than small and medium sized metros and rural areas. Furthermore, much has been made of the so-called urban renaissance. Population growth has returned to cities’ urban cores, as well as the bulk of the job gains. There is a very lively debate among demographers, economists, planners, urbanists and the like over why and how these shifts are occurring. The research is fascinating and very important for policy and future economic growth. However, the simple fact that most people do not live in the urban core is lost among many of these debates. Suburbs are people too. Yesterday in Part One we examined population growth in Portland. Today in Part Two we take a look at job growth.

As with population, the relative pattern of job growth in the region is different today than during the housing boom. It is true that Multnomah County is not adding jobs at an appreciable faster rate than the suburban counties combined. However, Multnomah is growing faster today than last decade while the suburban counties are growing slower. Nationally, job growth in the city centers is surging in recent years as well, based on a City Observatory report last year.

pdxgrowthrates

Multnomah County is the region’s boardroom, the opposite of a bedroom community. Many more workers commute into the city to work. As such, thr largest increases in jobs are in Multnomah County. This is true even as a number of Portlanders themselves are reverse commuting, particularly to Washington County. In a fascinating presentation, Employment Department economist Christian Kaylor details job and income trends for individuals living in the City of Portland, regardless of where they work. Christian also covers a lot of ground along the demographics of who is moving to or living in Portland proper. (The presentation made it to Reddit, which, is pretty cool! Do watch it if you have the time. About 45 mins.)

pdxemplevels0216

In percentage terms Clark County and Washington County have seen the largest job gains. Both are significantly above their pre-Great Recession employment levels. Clark County has been particularly strong relative to the conventional wisdom which tends to focus more on the Oregon portion of the metro area. I am guilty of this as well, of course. For comparison purposes, the U.S. is 3.6% above pre-recession levels and Oregon is 4.2% above. The Portland MSA has outperformed both the nation and the state, as have most other large metropolitan areas.

PDXEmpPercent0216

The rest of the metro area has seen somewhat mixed results over the past decade. Yamhill’s growth has been strong. Clackamas experienced hardly any job growth for a number of years but recently joined the recovery. Columbia and Skamania remain considerably below their housing boom era peaks today. Within the metro area, I think the same story of housing and government applies to the more rural or bedroom communities, just as it does to the state’s second tier metros and rural economies.

As always, the differences between levels (actual numbers) and growth rates (how fast things change) is a big deal. Understanding both is important. The point of these two posts is the highlight how the narrative can and does change depending upon which aspect you focus on.

Data note: I completely agree with City Observatory’s Joe Cortright that county level data is not the best way to examine urban cores and suburbs. Many counties include urban and rural portions. However in the Portland MSA it works pretty well. The City of Portland is roughly 80% of Multnomah County’s population and a minisucle portion of Clackamas and Washington counties’. According to Christian’s presentation, the City of Portland is more like 88% of Multnomah County’s jobs.

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