Growing Pains
Carla Axtman
Many readers may be familiar with the old urban legend having to do with signs placed at the state's borders by Oregon Governor Tom McCall. The story goes that in his fervor to keep Oregon a liveable state, McCall's border signs said "Welcome to Oregon. Now Go Home". This legend may have been perpetuated by a rather infamous comment McCall made to CBS News' Terry Drinkwater in 1971 when he said, "Come visit us again and again. This is a state of excitement. But for heaven's sake, don't come here to live."
A new study by Fodor & Associates shows that McCall may have been on to something.
The study, released this month, shows that personal incomes are lower and decline more rapidly for residents in regions with higher growth in metro areas in the U.S. Conversely, the study also showed that residents in the slowest growing areas had higher personal income and the city had fewer people living in poverty. Fodor examined the 100 largest metro areas (representing 66% of the total U.S. population).
Startlingly, Fodor demonstrates a decline of almost $2,500 in per capita income for each 1% increase in growth rate. Further, Fodor finds that metro areas which grew faster from 2000 to 2009 tend to have greater declines in personal income during the recent recession. Declines for slower growing areas are much less steep.
In addition, unemployment rates in faster growing metro areas tend to not have lower unemployment rates, while not improving faster than slower growing areas.
Add this data to this morning's story in the Oregonian by Jeff Manning, and the Fodor study looks even more credible. Manning's piece reports on a meeting of the Home Builders Association of Metropolitan Portland. The builders are anxious about the housing prospects in the region, seeing little relief in 2011. But the money quote is at the end of the piece, brought to us courtesy of Tim Sullivan of John Burns Real Estate Consulting. From Manning's story:
It could be far worse in Oregon, Sullivan added, if not for the state's strict land-use laws. Oregon avoided Las Vegas-style overbuilding because of the land-use laws frequently assailed by the Home Builders political wing.
"It's because of your urban growth boundary," Sullivan said. "You're the antithesis of Phoenix, where you can build anything, anywhere at any time."
Like I said, maybe McCall was on to something.
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8:40 p.m.
Dec 13, '10
"On its current course, Oregon is literally on a death spiral," Kitzhaber told about 1,000 business, political and community leaders at the annual Oregon Business Summit.
8:41 p.m.
Dec 13, '10
Um... duh? People with high incomes tend to not move from the place that gives them high incomes. The people who move are those who are lacking in resource. Migrant workers, fresh college kids, people chasing the 'maybe' of a job... But really, is population growth even the correct measurement to be looking at? How about job creation vs. median income (are we making lots of low-paying jobs or are people becoming better off?) Or living cost vs. income levels (something, I am certain, Oregon fairs fairly poorly at).
...after all, if we have a bajillion people, all with minimum-wage jobs, is it really a good place to live?
9:14 p.m.
Dec 13, '10
Jason: What is your evidence that people with high incomes tend to not move from "the place that gives them high incomes"? They might stay in a VOCATION that gives them a higher income, but geography? Show me.
12:24 p.m.
Dec 14, '10
They also bail on the places where they earned that high income, selling out, cashing in and inflating values elsewhere. Exactly what we have seen in Oregon for four decades now. Well, um, until recently.
1:50 p.m.
Dec 14, '10
Look at the list of cities with high growth and those with low growth. While there are some cities that don't fit the model, the low growth cities include the New York's and San Francisco's that are expensive to live in and already packed with people. The poor cannot afford to live their and tend to move away to....places like Las Vegas and Phoenix which grew like fire until they stopped.
8:42 a.m.
Dec 15, '10
It's specifically because they don't fit the model of New York and San Francisco that the study holds more weight. If it were the case that all low growth cities were just too expensive to move there, that would be one thing. But clearly, that's not the case.
11:14 a.m.
Dec 14, '10
Can we just implant this post on the smartphones and bedtime go-to-sleep sound machines of every single Board and senior staff member of Washington County, Metro, Westside Economic Alliance, NAIOP, Portland Association of Realtors and HomeBuilders, programmed to play whenever the owner says--or even thinks--the words "growth" or "jobs"?
12:22 p.m.
Dec 14, '10
As I recollect the Tom McCall saying, it was "You are welcome to visit, but please don't move here."
An interesting quote from the Mapes piece is "During the bubble of the past decade, the ratio of home price to household income reached as high as 4.7-to-1 nationally and 5.4-to-1 in Oregon." I attribute this effect in Oregon to the heavy in-migration from California and its much wealthier residents. Southern Oregon was hit by this wave long before it started lapping up into the Willamette Valley.
The Fodor study is suspect, evidenced by the four references it cites. It looks to me like a premise in search of support rather than a true research study.