Report: Portland growth slows, suburbs speed up

Suburbs grew 1.8 percent compared to 1.4 percent for cities

Although construction of new homes stalled at the Villebois development in Wilsonville during the recession, it is now almost complete. (Josh Kulla/Pamplin Media Group)

PORTLAND, Ore. (PORTLAND TRIBUNE) — For years urban planners have been saying that Americans are moving to cities — especially since living far away from jobs, shopping and entertainment proved to be a bad idea during the Great Recession.

So, it may be hard to believe that from 2015 to 2016, suburbs grew faster than cities in this country — including those in the Portland-Vancouver-Hillsboro metropolitan area. At least, that’s what happened according to a May analysis of U.S. Census data by the Brookings Institution.

“Within the nation’s major metropolitan areas, the suburban population is growing faster than their cities; and nearly two-thirds of the nation’s largest cities showed a drop-off in growth during the last year,” wrote William Frey, a senior fellow with the institute’s Metropolitan Policy Program.

According to the analysis, in the Portland metro area, suburbs grew 1.8 percent compared to 1.4 percent for cities. That may not sound like much, but it’s bigger than the national difference, which was .89 percent for suburbs and .82 percent for cities.

The Orchards apartment complex in location in Orenco Station in Hillsboro, which blurs the line between cities and suburbs. (Christopher Oretell/Pamplin Media Group)

But both are a reversal of a national trend that’s been going on for the past decade, when cities began growing faster than suburbs for the first time since the end of World War II.

“These patterns do not necessarily imply the end of city attractiveness, but they do signal a shift away from the city growth dominance that was heralded three or four years ago,” Frey wrote in a May 30 online article titled, “City growth dips below suburban growth, Census shows.”

The slack issue

Local economist Joe Cortright, a nationally recognized expert on cities, isn’t convinced. He believes the census data does not accurately separate cities from suburbs in metropolitan areas. But Cortright also says the growth in some cities has slowed recently because land for additional housing is limited — and that includes Portland.

“I think the ‘slack’ issue is a key one for Portland: We’re not building housing fast enough to keep up with demand. For the first few years after the recession, we could grow mostly by reducing vacancy (filling empty housing), but now with vacancy rates very low, population growth depends on building more, and within the city we’re bumping up against that limit,” Cortright emailed the Tribune in response to questions about Frey’s analysis.

Another nationally recognized expert on cities is more convinced by the analysis. University of Toronto professor Richard Florida cites the increasing cost of housing as a major reason for the reversal in a Sept. 1 opinion piece in the New York Times — and singles out Portland for mention.

“The most desirable cities have become incredibly expensive places to live. In the Bay Area and Los Angeles, the average home costs more than 10 times the average income; in New York, Washington, Seattle, Denver, Miami and Portland, Ore., it’s more than five times,” Florida wrote in a piece headlined, “The Urban Revival is Over.” He previously predicted the growth of cities in his 2002 book, “The Rise of the Creative Class.”

In August, the national rental tracking firm Abodo also documented the high cost of living in Portland in a report on national rental costs.

“We found that in Portland, more than 45.4 percent of Millennials are spending at least 30 percent of their income on rent. And 41.0 percent of Gen Xers and 50.4 percent of Baby Boomers are doing the same,” wrote Senior Communication Manager Sam Radbil.

Given all the visible apartment construction in Portland, it’s easy to wonder where else people are finding homes in the region. But real estate professionals say that within the past few years, new home construction outside the city has increased, with new or expanded subdivisions being completed in many areas, including Clark County, Happy Valley in East Multnomah County, and North Bethany in North Washington County.

“From 2008 to 2011, we were in the mortgage crisis and nothing was being built. Some developers went out of business. But others held onto the land they have already acquired and waited for the market to turn around, which it began to do around 2012. It takes a few years to get permits and start development, so it makes sense that more homes started to get built in 2014, 2014 and 2015,” says Brigitte Pascutoi, principal broker at the John L. Scott office in the Sunset Corridor.

City or suburb?

But, as Cortright notes, some of the most popular new developments blur the differences between cities and suburbs. For example, several new apartment buildings have been completed in the dense Orenco Station planned community along the MAX light rail line in Hillsboro in recent years. And some of the new subdivisions include multifamily housing buildings and retail centers, like the ones in Villebois at the end of the WES line in Wilsonville.

Frey admits that one year’s worth of data is not nearly enough to prove a new trend has started. But he says new census data released earlier this year suggests that the Millennials who once favored cities are now moving to the suburbs as they grow older, get married and start families.

“These new numbers suggest that suburbs are, again, becoming attractive to this group and to others. But it is only a one-year data point. Thus, the jury is still out as to whether or not the 2010s will be the ‘decade of the city,'” Frey wrote.

The Portland Tribune is a KOIN media partner.