How Portland's business challenges ripple across Oregon
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Illustration: Annelise Capossela/Axios
Portland's business reputation is at a crossroads. While many residents see the city as livable and vibrant as ever, entrepreneurs and companies often report growing concerns about safety, cost and competitiveness.
Why it matters: The Portland metro area generates more than half of Oregon's economic output. So when business confidence shifts here, the effects are felt statewide — from job growth to tax revenue that funds education, transportation and health care.
- "The speed in which the data shows Portland's economic fundamentals deteriorating is highly alarming," Jon Isaacs, a Portland Metro Chamber spokesperson, told Axios.
Catch up quick: Before the pandemic, the Portland metro area had one of the fastest-growing economies in the country. Then came COVID. "That's when our economic draw really took a hit," Isaacs said.
- Violent crime spiked (but has since been dropping), the homelessness crisis intensified, hybrid work left downtown with more than 10 million square feet of vacant office space, and new local taxes increased the cost of living and doing business.
- While downtown foot traffic has nearly recovered to pre-pandemic levels and optimism among business owners there has improved, Multnomah County still remains 18,000 jobs short six years after the pandemic began.
Plus: Small businesses continue to report repeated break-ins and open-air drug use outside storefronts — conditions they say make it harder to operate.
Follow the money: New local taxes on businesses — like Metro's Supportive Housing Services, Multnomah County's Preschool for All, and Portland's Clean Energy surcharge — rose 82% from 2019 to 2023, according to a report from Gov. Tina Kotek's Central City Task Force.
- These levies are driving more and more wealthy people out of town.
Case in point: The city's general fund is heavily dependent on personal and business income taxes and has faced a multimillion-dollar budget deficit several years in a row.
- Meanwhile, specialty programs funded by voter-approved taxes are flush with cash.
What they're saying: Mayor Keith Wilson told Axios via an emailed statement that Portland's challenges don't "exist in isolation," and his administration has taken coordinated steps to boost competitiveness over the last year.
- Wilson pointed to the consolidation and reorganization of the city's permitting system, code amendments, temporary fee waivers for housing projects, the launch of his economic advisory group, as well as a proposal to increase tax breaks for small businesses.
- Portland also has "something rare" for companies looking to grow: "high‑quality office space at competitive rates," he said.
Zoom out: Look across the Columbia and you'll see a different picture playing out.
- The tax savings a business or individual would get by moving to Clark County from Multnomah County is roughly 16%, according to a 2023 Metro Chamber report.
- Combine that with lower housing costs, fewer overlapping taxes (but the addition of sales tax), active waterfront and downtown developments, and a concerted effort by officials to embrace growth, and the county's recent boom makes sense.
- "All of those things create economic vitality in an area that then starts to lead to investment," Isaacs said.
The bottom line: Making the city an attractive place to do business again may be key to keeping businesses here from looking elsewhere, he said.
- "When you're talking about an economy that's in crisis, you start by restoring your foundation."