Portland the next San Francisco?
Like people in Seattle, people in Portland are going: How do we make sure we don't become the next San Francisco? Jon Bilous/Shutterstock

The first thing I learned from the Portland Monthly is that Portland, Oregon fears that it could become another San Francisco, which, as everyone knows, is one of the most expensive cities in the US. (This concern is indeed also in the mind of our city.)

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The reason for Portland's fear is not unreasonable. Though there's a construction boom in much of that city, it also has, like SF, very strict zoning laws in the historic districts of its core. As the economist Edward Glaeser points in his book Triumph of the City, if you restrict development, then the value of the existing and preserved stock will shoot through the roof (pun unintended). This is San Francisco in a nutshell.

Seattle is a little different, however. The recent sharp increases in this city's living costs must first be attributed to the fact that it did better than other places after the crash of 2008. Why is this important? Well, most people tend think that the rich simply lost money in the crash, but what mainly happened is they withdrew it from circulation and stuffed it into safe places—for example, US government bonds. The recession was a strike by the rich.

But money sitting doing nothing is not a good thing because inflation erodes its value, and government bonds don't offer great protection from this erosion because everyone is buying them for safety, and this high demand lowers their yield. What the rich are desperately looking for as the smoke of a crash clears are dependable investments with high yields, and Seattle's property market looked pretty safe because the city performed better than most cities during the Great Recession. This attracted yield-hungry investment, and the hot money ignited the current boom. According to a report by the Urban Land Institute and Pricewaterhouse Coopers:

Seattle is one of the top capital destinations outside the major core markets... and as such is attractive to institutional and local investors alike.

Here are the other things I discovered in the Portland Monthly post: As a whole, the suburbs of Portland are considerably more dense than the city's core—the latter has "six to 10 units of housing per acre" and the former an astounding "18 to 30 units per acre."

This oddity finally explains why some urban theorists and writers, like Matthew Stadler, have argued that the solution to the city is the suburbs. From the perspective of Portland, the suburbs actually are indeed more urban than the city center, and as a consequence, the German theory of Zwischenstadt ("in-between cities" or, better yet, "cities without cities") makes sense in that unique context.

Lastly, Seattle is denser than Oakland, almost twice as dense as Portland, almost as dense as Los Angeles, and nowhere near as dense as San Francisco.