Work: It's a part of life for most of us. If we're lucky.
The good news for greater Portland: At the moment people are finding work, and most industries are creating jobs, helping fuel our continuing climb out of the Great Recession – even if that climb is beginning to slow a bit.
But there's a stubborn challenge holding us back. All over greater Portland, thousands of properties sit vacant or underused because of pollution from past uses. These could be places for businesses to grow, people to live or nature to thrive. But instead these properties – known as "brownfields" – are a drag on the region's communities and economy.
What does this story mean for you and your community? Here are a few things to know about greater Portland's job market today – and how brownfields can hold it back.
1. Our economy continues to grow.
The Portland metropolitan area has stood out from the nation for its robust recovery from the Great Recession. Indeed, most of the measures experts look at to evaluate our economy paint a positive picture of the region’s prospects.
The Portland metro unemployment rate for 2016 was just 4.7 percent – the lowest it has been since 2000.
Educated, working-age people continue to migrate here in increasing numbers, providing local employers with a steady pool of skilled workers while also attracting employers in other regions to consider locating here. And with a strong 4.6 percent increase in a measure of regional economic activity called gross domestic product (GDP), greater Portland had the 10th-fastest growing economy out of the nation’s 100 largest metro areas in 2015, the most recent year data was available.
2. More than a quarter of greater Portland's economic output comes from the manufacturing sector.
That's 26 percent of our region's economic activity from making things. Nationally, manufacturing accounts for less than half that – just 12 percent of the nation’s total economy. But economic activity doesn't always equal jobs: Manufacturing accounts for just over a tenth of greater Portland’s jobs.
Thanks largely to production of high-value products such semiconductors and electronics, the manufacturing sector contributes an oversized amount to the regional economy relative to its share of the workforce.
But despite its strong contribution to the region’s economy, jobs in the manufacturing sector stagnated in 2016 – by December, the industry lost 1.4 percent of its Portland-area jobs relative to the year before.
Still, the large profit margins of the region’s high-tech manufacturing exports means that the sector’s earnings are substantial, even as the size of the manufacturing workforce is somewhat stagnant.
4. Construction jobs are booming again.
Different industries drove job growth in 2016 than in the previous year.
Construction was the fastest-growing major industry by far, in large part reflecting a region-wide scramble to match population growth with new housing. Commercial building has also been contributing construction jobs. Specialty trade contractors, such as concrete workers, plumbers and electricians, added the most new jobs in this sector while residential builders showed the biggest percentage gain from the previous year.
Regional economist Amy Vander Vliet with the Oregon Employment Department suggests that residential construction employers may have been playing catch-up. Construction was hit hard during the Recession and work was scarce. During and after the recession, it’s likely that many of those workers took jobs in other fields, left the region in search of work or retired.
When construction boomed in the past few years, the industry was no longer short of work. Available labor was snapped up as building resumed until employers hit the roadblock of labor shortage. 2016 has seen a balancing of the supply of construction workers to meet the demand.
4. Our quick growth could be settling down a bit.
However, economists have noted some signs that greater Portland’s fast rate of job growth may be leveling out. Although the metro area has historically outperformed the state during economic expansions, the past year has seen job growth rates in the rest of Oregon surpass greater Portland by a growing margin. Some areas, like Bend, grew employment almost twice as quickly.
A second thing to watch is a flatlining of hiring by temporary staffing agencies, mirroring a national trend. This sector is considered to be an early bellwether of a slowdown in the labor market because, as the Wall Street Journal explained earlier this year, “Cautious firms tend to first hire temps when an expansion begins and dismiss those nonpermanent workers when they sense the economy is faltering.”
Neither of these two trends are currently cause for alarm, but they are signs that change may be on the horizon. On the whole, the local economy is continuing to improve.
5. Brownfields are a drag on the region’s potential.
In Oregon, we treat land like the limited resource it is. To protect irreplaceable forests and farmlands, state law requires cities to focus growth within urban growth boundaries, in places that already have connections to roads, pipes and other utilities before building expensive new infrastructure from scratch on rural land. It’s efficient; it’s economical.
But polluted properties called brownfields sap the Portland region's efficiency.
Brownfields are properties whose environmental problems – confirmed or suspected – make development more difficult. Environmental problems can include pollution to the land, water or air, or the presence of hazardous materials at the site – think asbestos in building materials or drums of hazardous waste stored on-site. And because federal law can hold property owners responsible for their cleanup, many of these sites sit idle, underused or even abandoned by their previous owners.
Meanwhile, the need for new commercial and industrial spaces like these mounts pressure to develop farm and forest lands beyond the urban growth boundary.
Brownfields come in many sizes and with different backstories, but together they are a major challenge for the Portland region.
Most brownfields are small commercial sites, like gas stations or dry cleaners. But most brownfield acreage is in large industrial sites.
6. Brownfields take up a lot of land that greater Portland needs but cannot fully use.
The Oregon Department of Environmental Quality lists 580 brownfield sites within the greater Portland area.
The real number is estimated to be much higher, however. Because owning a property with known contamination comes with legal and financial liabilities, many property owners are reluctant to report possible problems.
The 2012 Metro Brownfields Scoping Report estimated that there may be as many as 2,300 brownfield properties in the Metro region, covering approximately 6,300 acres of land – an area bigger than Oregon City or Tualatin. These sites constitute about 7 percent of the land in the region that could be put to use for jobs and businesses.
Interactive map: Portland-area brownfields
Many of these brownfields are also located in the region’s most desirable locations for businesses: neighborhood and town centers and along main commercial corridors with easy access to highways, transit, railroads and airports.
As the Daily Journal of Commerce reported earlier this year, companies like Amazon, Bunzl Distribution, and UPS have been snapping up spaces in areas like these because the rise of online shopping has created a need for distribution centers close to consumers. With rental costs rising and vacancy rates for industrial properties falling to just 4.3 percent in the third quarter of 2016, there is an increasing demand for properties that brownfields have effectively taken off the market.
To get them working again, they need to be properly assessed and cleaned up – and that takes time.
7. Brownfields hurt more than the region's economy.
Inefficient land use isn’t the only way that brownfields hurt the regional economy. Properties that sit vacant or underused don’t contribute to local budgets as much as they could and even hurt neighbors’ property values. That adds up to less revenue for local schools, parks and services.
Communities lose opportunities to build new housing that could take pressure off of the region’s increasingly unaffordable market or business opportunities that could create new jobs in places that already have good services and infrastructure.
And of course there are effects that are very real but harder to quantify. Pollution can cause persistent environmental degradation that takes decades to reverse.
Brownfields' toll on human health and decreased quality of life is harder to measure, though those impacts aren’t evenly spread. The most vulnerable members of our region are disproportionately bearing the impacts of these hazards.
Brownfields are three times as likely to be located in an underserved community as defined by the Metro Equity Composite.
8. Cleaning up brownfields could add up to big economic gains.
The good news is that a brownfield doesn’t have to stay a brownfield forever. Most brownfield sites are capable of being cleaned up and returned to productive use in their community. And while cleaning these properties up is important for human health, the environment and social equity, there’s often a much more basic motivation.
The primary motivator for people who had or were currently conducting cleanups is economic, according to a 2014 study conducted for the Oregon Business Development Department.
But while a developer who remediates and redevelops a brownfield can make a tidy profit, the surrounding community could benefit more, a 2012 report for Metro showed. Some of the highlights:
Communities clearly have a strong interest in seeing brownfields redeveloped. Recognizing this, the state has developed several programs providing funding and technical assistance to help property owners and developers clean up brownfields. These include the Oregon Brownfields Redevelopment Fund, administered by Business Oregon, which provides low-interest loans; programs at the Oregon Department of Environmental Quality that reduce a developer's liability; and a variety of local programs that can provide grants, loans or tax breaks to help make cleanup happen.
And the returns for public investment could be big.
For every $1 the state invested into these programs, the private sector invested $15 into redevelopment.
That's according to the 2014 Oregon Business Development Department study.
So the benefits of brownfield cleanup are known and there’s even money and assistance available to help a developer along. Yet, the region still has more than 2,300 known and potential brownfields.
What’s keeping the region from cleaning these up and putting this land back to work?
9. Brownfield redevelopment: It's complicated.
A brownfield redevelopment is essentially two complex processes rolled into one: a real estate project and an environmental cleanup. Each brings its own hurdles that a developer must clear before the project can be completed – or more commonly, before the project can even get started.
A developer working with a brownfield property faces all of the same challenges as a typical real estate project: market conditions, financing, permits, design reviews and managing construction once the project is approved, to name just a few. These challenges alone hold up or stop plenty of projects every year.
But properties with known or suspected contamination bring all of these challenges and then some.
Here's a look:
Finally, cleanup usually happens through the state’s regulatory process. At nearly every step of the cleanup process, developers must coordinate actions with the Department of Environmental Quality, or DEQ.
DEQ is responsible for approving cleanup plans, issuing permits, evaluating results, and issuing the final letter of No Further Action - the document which assures owners (and their lenders) that the property is clean enough to be safe for the intended redevelopment.
All that takes time, and it’s never exactly clear at the start how long it will take. According to a 2016 survey conducted by the Oregon Brownfield Coalition, people involved in brownfield redevelopment listed the length and uncertainty of the regulatory process as one of the top challenges to brownfield redevelopment.
10. There's hope for brownfields.
But brownfields are starting to get some help.
In 2014, a diverse group of individuals and organizations including public agencies, private developers, nonprofits, state economic development groups, environmental advocacy groups and community-based organizations from across Oregon came together to talk about brownfields. Although the members’ motivations varied, they shared a common goal: Turn these liabilities back into community assets, quickly and equitably. They agreed to work collaboratively to meet this challenge.
The Oregon Brownfield Coalition was formed.
And thanks in part to the breadth of the coalition, this group's efforts have been very successful. They were instrumental in getting the State Brownfields Redevelopment Fund re-capitalized with $7 million in new funding in 2015. They have also introduced and supported legislation that created new policy tools that cities and counties can use to incentivize property owners and developers to start cleanups, creating new opportunities for partnerships between the public and private sectors.
The graphic below shows some of the Oregon Brownfield Coalition's recent accomplishments.
In the next section of this Regional Snapshot, we take a look at five stories of brownfield cleanup and renewal – creating new places to work, live, gather and breathe.