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While California Cities Suffer, Portland Thrives

Aug 7, 2008
"Everything in the world here is under construction."

So said my wife as we attempted to maneuver through downtown Portland recently. It seems that you can't walk more than a few blocks in the central part of Portland without encountering temporary construction fencing, cranes, pile drivers and hordes of steelworkers.

Apparently, these people don't realize there's a real estate recession going on.

Central Portland continues to thrive in ways that like-size California cities namely, Sacramento, Fresno, Long Beach and Oakland can only dream about. Mid- and high-rise mixed-use projects are going up all over downtown Portland and adjacent districts, often within site of condos or adaptive reuse projects that themselves are relatively new. Ten thousand housing units have been built in the 3,000-acre central Portland planning area since 1988, and another 7,000 units are either under construction or in the planning pipeline, according to a Central Portland Plan assessment released a few months ago. While new condos appear to be selling in the range of $400 to $500 per square foot, 59% of all central area housing units are available to households earning 60% of median income.

Sacramento, Long Beach and Oakland count new central area housing units by the hundreds not the thousands. Fresno needs only the digits on a couple of hands. The housing slowdown that has stalled or killed dozens of central city housing projects in California appears to be having little impact on central Portland. In fact, prices are rising modestly in Portland's core area.

Ridership on the regional MAX light rail system, which is concentrated in central Portland, has increased twice as fast as population, and about one-quarter of east-west commuters to the central area ride MAX. Bicycles make up 10% of vehicles on the four primary bridges across the Willamette River.

It's true that plenty of people drive in central Portland; however, especially in downtown, around the university and in the Pearl District, it sure seems like more people get around via light rail, the streetcar, bicycles and their feet. The four California cities I mention above have nothing like Portland's rail system, nor the huge numbers of people who commute and run errands on their bicycles.

I've written before about how Portland far exceeds Sacramento as a city. Recent visits to both cities only confirmed my earlier observations. Downtown Portland throbs with life day and night, weekday and weekend. Public gathering spaces, streetcars and sidewalks are jammed all the time. The only California city that can match Portland's urban vibe is San Francisco. Compared with Portland, downtown San Jose and Los Angeles are nighttime and weekend ghost towns.

In some ways, Portland is blessed with decisions made long ago. The central area has an extremely tight grid with many blocks only 200 feet long. The tight grid makes walking easy and inviting. Compare this with downtown L.A., where walking three blocks can take 10 minutes. A public university (Portland State) campus is integrated into downtown and the cultural district. Compare that to Sacramento, Long Beach and Fresno, cities where the CSU campus is isolated in a suburban area. In the early 1970s, retired painting contractor Walter Powell decided to open a downtown bookstore; it grew into the largest bookstore in the English-speaking world. Compare that with Tower, Sacramento's homegrown chain of music stores that no longer exists.

One might argue that with these sorts of building blocks, Portland planners have had it easy. Plus, they had public support for urban growth boundaries that limited the sort of low-density sprawl that has funneled capital and energy away from downtowns in Sacramento and Fresno.

Still, Portland has the reputation of being the city that planners built. That makes the Central Portland Plan update that commenced earlier this year intriguing.

When the current Central Portland Plan was adopted in 1988, the city's goal was to bring 5,000 new housing units and 50,000 additional jobs to the core area, explained Stephen Iwata, project manager for the plan update. In 1995, the city updated those goals to 15,000 housing units and 75,000 jobs.

The housing units have arrived. But the number of jobs in the central area has remained flat at about 122,000 for two decades, suggesting that Portland planners gasp! failed in one area. What went wrong? Iwata said bank consolidations have cost downtown several bank headquarters, and the dot-com bust of earlier this decade turned out the lights in numerous offices. Plus, the suburbs still have room for new Class A office space with abundant surface parking. Central Portland office development means going up or down, and that's expensive. In addition, the retail vacancy rate in the core area is surprisingly high at about 12%.

Naturally, Portland wants to tackle the jobs issue with planning tools. For example, the city is behind a 6 1/2-mile extension of the light rail line that will connect downtown, Portland State, a new campus of the Oregon Health and Science University, the Oregon Museum of Science and Industry, and Portland Community College. The system extension will use a new bridge over the Willamette that provides for light rail, streetcars, bicycles and pedestrians but not cars. The idea is to employ transit and mobility to capitalize on existing assets and create an education and tech corridor.

It's the sort of bold idea you expect to see in Portland. Would any California city be so brave?

Paul Shigley
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