Urban Renewal at what Cost?


Recently the Portland City Council approved a $51 million dollar extension of the Central Eastside Urban Renewal District. Public money for this project will be used for road improvements, seismic upgrades, and a new Portland Streetcar loop. Perhaps these improvements sound like good ideas, but what is the cost of Urban Renewal?

Lewis & Clark Law School professor and local blogger Jack Bogdanski, reported that a recent city auditor’s study of the Portland Development Commission found that it had to “invest” $544,681 per job added in five urban renewal districts from 1996 to 2004. Even worse, “control areas” just outside those districts had better job growth without any government investment.

In its quest to eliminate “blight” from the city, the PDC will spend over $200 million dollars this year. In order to do this, the PDC will strangle local governments by implementing tax-increment financing and siphoning off local revenue for its Urban Renewal projects. Urban Renewal comes at the high cost of citywide maintenance for things like roads, jails, and schools.

Central planning rarely produces optimal outcomes for anyone but a select few. Most PDC projects are not sustainable on the open market, and the commission routinely lines the pockets of rent-seeking developers.

If Urban Renewal sounds like a good idea, think again.

Scott McCormick is a research associate at Cascade Policy Institute, a Portland, Oregon based think tank.

© 2006, Cascade Policy Institute. All rights reserved. Permission to reprint in whole or in part is hereby granted, provided the author and Cascade Policy Institute are cited. Contact Cascade at (503) 242-0900 to arrange print or broadcast interviews on this topic. For more topics visit the QuickPoint! archive.

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