Portland’s latest attempt to centrally plan transportation patterns is backfiring

By Jessica Miller

Portland has a longstanding history of attempting to socially engineer people’s transportation patterns, and the “Better Naito” project is no different.

In 2015, a group of students from Portland State University created the idea of “Better Naito” as their capstone project. From April 28th until September 30th each year, Portland planners intend to enhance the lives of pedestrians and bikers along the Waterfront by reducing car capacity from two lanes to one on SW Naito Parkway and transforming one lane into an open area for walkers and bikers. The project was implemented and paid for by the Portland Bureau of Transportation (PBOT), Portland State University (PSU), Better Block PDX, and $350,000 from the Portland City Council.

Advocates of “Better Naito” claim that “[f]eedback from the public was very positive,” but there is more to the story. After receiving copious amounts of negative feedback from business owners who see fewer shoppers, employees who experience longer commutes, and shoppers who can’t reach desired downtown destinations, the Portland Businesses Alliance created a petition to the Portland City Council in opposition to “Better Naito.” They claim the project is “harmful to our city’s economy and extremely disruptive to commuters.”

It’s no surprise Portland’s latest attempt to centrally plan commuters’ lives is backfiring, but that hasn’t stopped advocates from making the project annual. To voice your opinion on “Better Naito,” visit the Portland Business Alliance’s online petition.


Jessica Miller is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

 

Oregon’s new minimum wage law will hurt the people it aims to help

By Lydia White

Just prior to Oregon’s July 1 minimum wage* increase from $9.75 to $11.25 (Portland Metro Area), a team of researchers from the University of Washington produced a study, published by the National Bureau of Economic Research, that measures the effects of Seattle’s $13 minimum wage. In just nine months, Seattle wages rose substantially, from $9.47 in 2014, to $11 in 2015, to $13 in 2016 (an increase of 37.3%), and again to $15 on the first of this year.†

Unique to this study is a data set collected by Washington’s Employment Security Department which tracks hours worked in addition to earnings, making this particular study the first of its kind. Washington and Oregon are among four states that track these data.

The study‡ found that the city’s mandates resulted in 5,000 fewer jobs around Seattle. The average low-wage employee saw 3% higher hourly wages, but 9% fewer hours worked, resulting in a net loss of $125 per month. For low-income households especially, an annual loss of $1,500 is significant.

Jacob Vigdor, one of the study’s authors, said, “Traditionally, a high proportion of workers in the low-wage market are not experienced at all: teens with their first jobs, immigrants with their first jobs here.”

Wages are prices, or market signals, that indicate the value of labor productivity employees create. Low-skilled, low-paying jobs provide the opportunity to acquire knowledge and experience they were previously without, setting up workers for their next, potentially higher paying jobs. Henry Hazlitt, author of Economics in One Lesson, wrote:

“The more the individual produces, the more his services are worth to consumers, and hence to employers. And the more he is worth to employers, the more he will be paid. Real wages come out of production, not out of government decrees.”

The least skilled are further disadvantaged when artificially high price floors are implemented. As described in the UW study, when the cost of employing a worker exceeds the value that worker creates, employers are forced to reduce hours or eliminate positions within their business by laying off employees, who are often replaced by automation. These alternatives harm low-wage employees.

Additionally, employers are less likely to take a chance by hiring an unskilled worker and instead will search for only the most qualified candidates. Since teenagers are naturally less skilled due to lack of work experience, these policies create higher youth unemployment. A study last December by Cascade Policy Institute examined these and other “unintended consequences” of the minimum wage on youth.

Instead of, or in addition to, cutting costs of labor, employers increase prices of their goods or services. Consumers may choose to forgo such products or reduce their levels of consumption, in turn decreasing the need for labor. When the price of goods inevitably catches up to the employee’s higher wages, they find the purchasing power of their earnings has diminished.

Furthermore, large businesses can more easily absorb wage increases by operating within thinner profit margins or relocating to a region with a lower minimum wage. Local mom-and-pop stores don’t enjoy that same flexibility and must close their doors. With less competition, larger businesses have more power to raise prices.

When economists warn against the costs associated with the minimum wage, it’s not to protect greedy capitalists; it’s to protect both the worker and the small business owner from being priced out of the market.

For the benefit of all Oregonians, political leaders should learn from our northern neighbors and create an environment that doesn’t punish low-wage workers and the businesses that employ them. They can start by repealing the state’s onerous minimum wage law.


*Oregon’s and Washington’s minimum wages vary depending on region, population, benefits, tips, and business size. The minimum wages discussed here refer to those of Seattle and the Portland Metro Area.

†The latest 2017 increase was not included due to incomplete data.

‡The study used a “relatively conservative” $19 per hour low-wage threshold to account for the spillover effect of “miscoding jobs lost when they have really been promoted to higher wage levels….”


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article originally appeared in The Coos Bay World on July 10, 2017.

The Greatest Challenge to Traffic Safety? It’s Not Residential Speed Limits

By John A. Charles, Jr.

Earlier this week the Oregon House of Representatives passed HB 2682, which will allow Portland to lower traffic speeds on residential streets from 25 MPH to 20 MPH. This was hailed as an important step towards reaching the city’s goal of zero traffic fatalities by 2025, but in reality the bill is mostly symbolic.

First, HB 2682 only affects residential streets. Most traffic fatalities occur on higher-speed arterials.

Second, reducing travel speed is just one of many factors in traffic safety, and not always the most important. According to the 2015 Portland Traffic Safety Report, 54% of fatal crashes involve alcohol or drugs. When pedestrians are involved, 30% of fatalities involve either an intoxicated walker or driver.

Traffic speed is a factor, but 80% of Portland’s fatalities and serious injuries occur on the 19% of roadways that are posted at 30 MPH or higher. None of those roads will be affected by HB 2682.

The ubiquitous use of digital devices by motorists, cyclists, and pedestrians represents the greatest new challenge to traffic safety. Unfortunately, people who would rather text than watch the road are unlikely to be helped by a law that reduces speeds in quiet neighborhoods from slow to slower.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

How Portland’s Inclusionary Zoning Policy Makes Development Less Affordable

By Lydia White

The City of Portland’s inclusionary zoning* requirements have turned a once-gushing housing development market into sludge. This was predicted by nearly everyone outside the central planning bureaucratic bubble.

In a rush to beat a February 1st deadline, developers submitted permits for 7,000 units in less than two months. Since then, that number has dropped by 1033%. Combined with other onerous mandates, inclusionary zoning has pushed developers to build in Portland’s surrounding suburbs. Developers aren’t doing so out of greed; they cannot feasibly finance projects within city limits.

Incentives provided by the city aren’t enough to supplement the costs of inclusionary zoning units. Portland-based Urban Development + Partners estimates that an “affordable rate” building costs over $300,000 more than its value, which is the primary number banks and investors use to determine a project’s viability. Eric Cress, a principal with Urban Development + Partners, says, “You can’t finance that [inclusionary zoning projects]. The financing world does not accept anything that costs more than its value.”

The unfortunate, yet not unforeseen, consequence of inclusionary zoning is that some low-income households benefit, while the policy serves as an informal gentrification program suffered by other residents. If Portland’s city planners want to help people afford housing, they should repeal inclusionary zoning requirements and let developers increase housing supply in a free and open housing market.

*Portland’s inclusionary zoning policy requires developers with 20 units or more to make 20% of units “affordable” at 80% of median family income, or 10% “affordable” at 60% median family income.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Money

Will the PUC Make Oregon’s Solar Energy Incentives Equitable?

By Lydia White

In accordance with House Bill 2941, the Public Utilities Commission (PUC) is making recommendations to the Oregon State Legislature to ensure Oregon’s solar energy incentives are equitable, efficient, and effective.

One recommendation is to modify the compensation method for solar energy, net metering. Under net metering, solar owners consume energy their panels produce. When energy produced is insufficient, solar owners purchase additional energy from traditional sources. When excess energy is produced, solar owners sell energy. Solar owners are compensated at above-market rates and are exempt from paying their portion of incurred costs. Such costs include operation and maintenance of the grid and “spinning reserves,” the alternative power source utility companies run continuously in case solar produces less energy than projected. The state’s incentive structure shifts costs from solar owners to non-solar ratepayers. As the number of solar owners increases, ratepayers bear higher costs. The PUC is recommending these costs instead be shifted to taxpayers. While the PUC proposal’s efforts to alleviate inequity are commendable, their proposed recommendations still constrain Oregonians.

Although solar owners are double-dipping into the taxpayer pot—once when receiving heavily subsidized (and therefore low-cost) solar systems and again when receiving above-market compensation—the solar community is vehemently protesting. Despite the outcries, the PUC should pursue its recommendation to transition from net metering while also rejecting subsidies from ratepayers and taxpayers alike. By doing so, the PUC’s recommendations could relieve Oregon’s ratepayers from substantial burden.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

“Beyond Traffic” Has a Different Meaning in Portland

Portland is one of seven cities still in the running for a $50 million grant as part of the “Beyond Traffic” challenge sponsored by the federal Department of Transportation.

While the idea of solving traffic congestion sounds great, that is not an actual goal of Portland planners. In fact, local officials are trying to make traffic worse, by downsizing roads and lowering traffic speeds. As part of this campaign, a northbound travel lane on Naito Parkway was recently removed, and later this year two lanes on Foster Road will be eliminated.

Portland planners think we drive too much, so they want $50 million in federal funds to develop new data collection systems to encourage people to travel by bus, train, or bike. Since most people prefer a car, this will be a big waste of public money.

The transportation challenge for Portland is the need for an expanded highway system. Experimenting with technologies such as electronic tolling as a way of paying for that expansion might have been a useful grant application. But Portland planners don’t want to grow the system; they’d rather keep it small and congested, then use fancy technology to entice a few people onto a slow bus.

This is not a plan that will move us “beyond traffic.”

Updated as of 6/22: According to The Oregonian, the U.S. Department of Transportation has selected Columbus, Ohio as the winner of the federal “Smart City-Beyond Traffic” competition.

With this distraction out of the way, perhaps city planners can turn their attention to something more useful, such as finding ways to actually reduce traffic congestion in Portland.

Earning Their Keep: Do Elected Officials in the Portland Region Show up for Meetings?

By Nick Pangares and John A. Charles, Jr.

Most elected officials who serve on school boards or city councils do not get paid for service. However, for at least five governing jurisdictions in the Portland metro region, councilors do receive compensation. Those jurisdictions are: the Commissions for Multnomah, Clackamas, and Washington Counties; the Portland City Council; and the Metro Council.

This research examined the attendance records for all regularly scheduled meetings for the five jurisdictions during 2014 and 2015. In some cases, there were also “board briefings” or “work sessions” to attend.

In general, most elected officials attended a high percentage of meetings, either by being present or by participating via telephone. Group participation rates usually exceeded 85%, on average.

Washington County Commissioner Greg Malinowski had the best attendance record of all elected officials over the two-year period – 100% for both years. Multnomah County Commissioner Judy Shiprack had the worst two-year record – 70% for board briefings, and 80% for board meetings. She is termed-out and not running for re-election.

Summaries of the attendance records for all elected officials are below. The numbers indicate the percent of meetings where the officials participated.

 

Clackamas County Commission

Regular Commission Meetings

 

Ludlow Savas Schrader Smith Bernard
2014 98% 100% 82% 89% 89%
2015 98% 95% 93% 93% 89%

 

 

Multnomah County Commission

Regular Commission Meetings

 

Madrigal Kafoury McKeel Wendt Baily Smith Shiprack
2014 100% 98% 88% 98% 86% 90% 83%
2015 n/a 92% 97% n/a 89% 95% 77%

 

 

Multnomah County Commission

Regular Briefings

 

  Madrigal Kafoury McKeel Wendt Baily Smith Shiprack
               
2014 100% 93% 83% 97% 94% 90% 70%
2015 n/a 100% 100% n/a 65% 90% 70%

 

 

Washington County Commission

Regular Commission Meetings

 

  Duyck Malinowski Schouten Rogers Terry
           
2014 94% 100% 87% 87% 94%
2015 91% 100% 91% 88% 85%

 

 

Portland City Council

Regular Meetings

 

  Hales Fish Fritz Novick Saltzman
           
2014 92% 83% 92% 94% 85%
2015 97% 92% 97% 92% 85%

 

 

Metro Council

Regular Meetings

 

  Hughes Chase Craddick Harrington Stacey Collette Dirksen
               
2014 84% 97% 95% 97% 97% 97% 89%
2015 93% 98% 95% 98% 100% 98% 93%

 

 

Metro Council

Regular Work Sessions

 

  Hughes Chase Craddick Harrington Stacey Collette Dirksen
               
2014 85% 94% 96% 96% 96% 96% 94%
2015 89% 93% 93% 95% 98% 91% 91%

 

While taxpayers probably expect officials to show up, does attendance really matter? That depends. Strictly speaking, yes. Each body must have a quorum of members present to conduct business. If too many officials skip meetings, decisions can’t be made. So even if individual commissioners are ineffective, a minimum number of them are needed at any given meeting.

Moreover, at most public meetings where agenda items will be voted on, public testimony will be taken. Constituents have a right to expect that when they take the trouble to show up with prepared testimony, elected officials will be there to listen.

However, attendance has little to do with influence or effectiveness. Public meetings are a form of street theatre; all the key decisions have been made ahead of time behind closed doors. So an elected official with a spotty attendance record could easily be the most important member of the body – it’s just that the heavy lifting is being done out of sight.

For example, Portland City Commissioner Dan Saltzman had the lowest two-year record of attendance among all City Commissioners, but few observers would consider him ineffective. To the contrary, he may be the most influential member of the Council, especially with a Mayor who is not running for re-election.

Metro Presiding Officer Tom Hughes also had the worst attendance record among his peers. Yet any Council member hoping to advance new policy would hardly consider Councilor Hughes unimportant.

There are also extenuating circumstances. What we see may not reflect the whole story. According to Commissioner Malinowski:

“The issue of absences turns out to be apples and oranges most of the time. This is partially because 4 out of the 5 commissioners are part time, and most of the time the reason Commissioners miss meeting is because of prior obligations regarding outside County business. If you compare absences with the schedule of each commissioner, this is usually the case. However, meeting attendance and communication is critical, particularly when technical questions about County business need to be answered.”

When asked if there should be a required minimum participation rate for meetings, Commissioner Malinowski responded:

“Overall the honor system of attendance is working, and I don’t see a need for a minimum attendance rate requirement. Many times what happens is the Commission will cancel meetings if two or more Commissioners are going to be absent. This usually happens on Tuesday evening meetings.”

The value of attendance is ultimately determined by voters. Those who are satisfied with the performance of their representative may overlook a mediocre participation rate.

However, voters should remember two things. First, for the five jurisdictions featured in this report, elected officials get paid to show up. They are not volunteers.

Second, attendance does matter. If everyone takes a night off, no business gets transacted. And running a government entity is a business.

About the authors: Nick Pangares is a research associate at Cascade Policy Institute. John A. Charles, Jr. is President and CEO of Cascade Policy Institute and also serves on the board of a rural water district in Clackamas County. Volunteer Bob Ludlum assisted with data gathering for this report.

Portland Chases Another Dream

The U.S. Department of Transportation announced this week that Portland is one of seven cities still in the running for a $50 million grant as part of DOT’s “Smart Cities” challenge. Portland is proposing to build “smarter streets” that talk to self-driving cars and to develop an app that will decrease reliance on private automobiles.

This is not a joke, and it’s not another episode of Portlandia. There are actually federal bureaucrats who think that putting sensors in streets to talk with computerized cars is important, and that Portland is capable of running such a system.

Apparently, they are unaware that Portland’s street system is so run down that the city could be the film location for a Mad Max movie.

And given the region’s obsession with 19th century street cars that move more slowly than pedestrians, why would anyone think Portland is capable of being a national leader in 21st century roads?

This is a city that tried to prevent car-sharing companies such as Uber and Lyft from legally operating here last year. No fancy street sensors were required; the necessary smart phones were already in the hands of potential customers. All the City Council needed to do was get out of the way, and even that was too complicated for them.

We should let Google worry about autonomous cars. Portland should stick to something simple, like filling potholes.

Does PCC-Sylvania Need a Light Rail Tunnel?

By Emma Newman

Metro and TriMet are jointly considering an expansion of the light rail system to PCC-Sylvania in SW Portland, by building a tunnel to the campus from Barbur Boulevard. The tunneling would have a significant impact on the surrounding neighborhood, forcing many homeowners to move away while still requiring PCC students to make a long walk to their classes.

Currently, 84 percent of PCC students drive to school, even with the campus being served by both shuttles and busses. If this tunnel plan is chosen, Oregon taxpayers will be saddled with paying half of the two billion dollar cost.

When asked at what point the costs of building new transit outweigh the benefits, a Metro spokesperson responded that “transportation planning is more an art than a science.”

An alternative plan under consideration is a rapid bus line which would also service PCC-Sylvania. While this would be about half the cost and much less inconvenient than digging a rail tunnel, it still would be a response to a need that doesn’t exist.

Despite the low ridership of current transit options, transportation officials continue to follow the mantra of “if you build it they will come,” rather than follow the laws of supply and demand.

Emma Newman is a research associate at Cascade Policy Institute, Oregon’s free market think tank. She is a student at George Fox University, where she is studying Economics and Computer Science.

Why Do City Leaders Keep Portland in the “Transportation Dark Ages?”

In November, Beaverton, Gresham, Hillsboro, and Tigard joined Vancouver, Washington in welcoming ridesharing juggernaut Uber to operate legally in their cities. Last weekend, Uber began operating in Portland without permission, in effect daring the authorities to stop it. While the City has issued a cease-and-desist order against Uber, more than 10,000 people have signed an online petition asking Mayor Hales to let the company operate in Portland.

Until now, most major cities have granted virtual monopolies to a few taxicab companies on the assumption that government must protect both the livelihoods of drivers and the safety and convenience of passengers within their jurisdictions. But in a truly free economy, we should celebrate the technological innovation that allows people with cars to make money by giving rides to people who want them.

The “sharing economy” stems from the realization that all of us own assets that we may not use all the time, whether it’s a spare bedroom in your home (think Airbnb), or an automobile that sits in your driveway for hours a day. It’s time for Portland to live up to its hype and let young (and not so young) creatives do what they do best—create services that the rest of us want and need. It’s time to legalize transit freedom and bring Portland out of the Transportation Dark Ages.

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