November 20, 2001

Cities Online: Urban Development and the Internet

Part 2: Portland

Introduction

Portland prides itself as a center of manufacturing for high-tech goods and an entrepreneurial city where independent-minded people find a receptive climate for starting new businesses.  Portland also has a strong sense of identity as a community, with a passion for environmental protection and a strong ethic of managing growth throughout the region. City government is actively trying to balance the area’s desire for technology-driven growth with an equally strong preference for maintaining Portland’s livability, and it is using the Internet to do it.

In terms of business development, Portland’s most notable innovation has been its “creative services initiative,” a policy designed to support the growth of emerging multimedia industries while directing this growth to the city’s center.  Containing dense development downtown, thereby protecting rural areas on the city’s outskirts, has been an article of faith in Portland since 1980, when it established an “urban growth boundary.”  This has created lots of pressure as the region has grown, and Portland has become a very fashionable place to move to in recent years.  Money Magazine rated it the best place in America to live in 2000, and the city’s location between Silicon Valley and Seattle, with a lower cost of living than either, has added to Portland’s allure for Internet entrepreneurs.  A number of Internet companies, such as Lucy.com and 800.com, call Portland home.

In the wider community, Portland has a long tradition of organized neighborhood involvement in city affairs.  In 1974, Mayor Neil Goldschmidt established the Office of Neighborhood Associations—now called the Office of Neighborhood Involvement (ONI)—to facilitate communication between neighborhoods and city government.  Today, neighborhood associations in Portland are fairly well wired; associations representing neighborhoods of varying income levels and demographic characteristics generally have Web pages. 

The Internet and the Community

Portland’s active citizenry and city work force means that there are a number of people willing and able to think of ways to use the Internet as a tool in civic affairs.  This has resulted in efforts to bring the Internet to low-income people, programs by city government to use the Internet to improve delivery of affordable housing services, and the use of email listservs to participate in city planning debates.

i.        The Portland Area Housing Clearinghouse (PAHC)

On the strength of a $480,000 grant from the U.S. Department of Commerce’s Technology Opportunities Program, Portland’s Bureau of Housing and Community Development (BHCD) is creating a Web-based system to improve housing and other services for Portland citizens.  The BHCD proposal addresses an enormous information gap facing low-income residents when they seek social services.  In a survey of low-income people in the region, BHDC asked clients which agency they would turn to if they were evicted from housing, needed help in finding housing, had a problem with a landlord, or felt they were facing discrimination.  In each case, about two-thirds of respondents said they did not know; four out of five (79%) said they would not know where to turn to find housing.  Given that half of the respondents change housing status in a given year, awareness of city housing services could help low-income individuals in Portland significantly.

The BHDC project, called the Portland Area Housing Clearinghouse (PAHC), is ambitious. First, since low-income people say they lack information on where to find affordable housing, the PAHC will provide a single data base with housing listings.  As with the Cleveland Housing Network—a similar model that BHDC has studied—housing providers will have strong incentives to keep the data base current so as to rent inventory and minimize unwanted inquiries about already-rented properties.  Second, the system should mitigate the negative effects of high staff turnover in social services agencies. With an up-to-date data base of services, for example, new workers will be able to see a history of services provided to clients.  Finally, BHDC plans to have much of the housing data available publicly on the Internet so users can search on their own.  This will include information on which documents to bring when signing up for social services—a major stumbling block at present.

As BHDC manager Andy Miller puts it, the objective of PAHC is to allow low-income people to receive the kind of service from social workers that airline travelers receive from travel agents when planning a trip.  A travel agent not only has flight information available for customers, but also can make hotel or car rental reservations.  As one example, Miller describes a client coming into a Legal Services office to find out how to fight an eviction notice.  If the intake interview reveals that the client needs a new place to live, a Legal Services staff person with access to PAHC can quickly find what is available and direct the client to a new unit.  With an error rate of close to 80 percent for inquiries to Portland social services agencies (meaning that agencies tell clients 80 percent of the time that they have called the wrong agency), the “travel agent model” has enormous potential to improve efficiency for agencies and the people they serve.

ii.     The Neighborhood Pride Team

Portland’s oldest and most active community computing initiative is the Neighborhood Pride Team (NPT), a community development corporation in outer southeast Portland that has taken a bottom-up approach to providing computer and Internet training.  NPT was initially founded as a community revitalization effort with a special commitment to the empowerment of women; the neighborhood has a substantial number of female-headed households and a high incidence of domestic violence.  An early survey found that residents wanted NPT to be a place where they could build job skills; two-thirds of respondents specifically said they wanted NPT to provide computer training. 

From one computer and some electric typewriters in 1995, NPT’s Skills Center has grown to 20 computers and two full-time instructors for computer and Internet courses.  Over 1,200 students passed through NPT’s Web and computer skills classes in 2000, and NPT recently contracted with a company called TechforAll that uses the Internet to build people’s Internet and computer skills.  Using a DSL connection to NPT, TechforAll allows NPT students to log onto a server that contains educational versions of Microsoft Word, Excel, and Access.  This greatly economizes on software expenditures for NPT, thereby enabling it to devote more resources to hardware and training classes.

NPT’s Internet and computer training programs are not ends in themselves. They serve a broader goal of promoting leadership development in outer southeast Portland.   Cooley says NPT’s goal is for two or three dozen community leaders to emerge out of the 1,200 students it has trained.  NPT’s motto is “Each One, Teach One” to convey the idea that students are expected to pass on skills to others in the neighborhood.

NPT’s computer training program has energized the community in ways that individuals taking computer classes at a community college could not, according to Cooley and her staff. The social atmosphere fostered at NPT has enhanced the learning environment for those coming to NPT for Internet training and access, and in a neighborhood isolated from the rest of Portland, NPT has been a catalyst for people to make new connections.

By providing an entrée to the Internet and computer skills, NPT gives its students greater economic opportunity and broader access to information. In some cases, this has led to small-scale entrepreneurship.  As an example, Cooley said one neighborhood resident had intermittently run a candlemaking business out of her home for years.  The woman took as many Web classes at NPT as she could and revived her business by creating a Web site for it.  In another case, a woman with a history of mental illness discovered she had a knack for Web page design as she worked her way through NPT’s classes.  In two years, she has gone from being a welfare recipient to a successful independent Web page designer, and she now mentors others in developing Internet and design skills. 

On a larger scale, NPT has formed the Trillium Artisans program, which matches another NPT initiative, its Sewing Program, with the Web.  Several women in the Sewing Program thought that their work in transforming reclaimed material into handmade products would appeal to the environmental consciousness of people in Portland and beyond. They  set up a Web site, www.trilliumartisans.org, to post photographs of their work, and their wares were available for purchase online starting in the 1999 holiday season.  Over 50 women have participated in Trillium Artisans.

Box 1

Mapping Portland’s Community Computing Projects

Portland’s NPT may be its preeminent neighborhood computing project, but it is not the only one.  Researchers at Portland State University have charted the publicly available computer labs in the city and surveyed users of the labs to ask how effective they are.  Using a student class project, a team of researchers led by Portland State Professor Meg Merrick administered a survey to 149 users of 11 community-computing sites in Portland.  The project also entered the sites into a geographical information system (GIS).

Like other surveys of users of community computing centers (e.g. Children’s Partnership), the Portland State report shows that respondents were predominantly women (73%), heavily African American (27%), and older (48% over age 55).  The computer labs were also a supplementary means of access for users; 75% had computer access elsewhere and 55% had access at home.  This suggests that the social dimension of the computer labs is an important attraction for users.  Based on follow-up interviews with users, researchers concluded that the “comfort level” provided by the labs as a learning environment was a reason why users came to them. Moreover, 40% of users said they had heard of the lab through a family or friend, about twice the number who had heard about it directly through the community organization hosting the lab.

Portland State’s use of GIS technology is part of a broader movement among community activists to improve communities by cataloging their assets.  John Kretzman and John McKnight have pioneered an approach to community development that focuses on appreciating the assets that exist in any neighborhood in terms of individuals, associations and enterprises instead of listing the community’s deficits, the traditional tool for evaluating low-income areas.6 Arguing for an “internally focused” outlook on community development, Kretzman and McKnight believe that looking at the upside in communities—which typically draws attention to important relationships among people and institutions in a neighborhood—is indispensable to renewing low-income areas.  Technology does not play a prominent role in Kretzman and McKnight’s underlying philosophy, but the growth of the Internet and GIS software has given activists a new tool for mapping community assets.  By giving local decision-makers a way to visualize assets via online maps, activists hope to focus greater attention on communities and increase the pace at which outside resources are directed to distressed areas.

Portland State is not the only entity trying to call attention to community computing in Portland.  The director of Portland’s cable access TV station, Rob Skelton, has undertaken two initiatives to increase Internet availability in his community.  The first is to offer Internet training and assistance in Web page development to the staff of “mom and pop” nonprofit organizations, such as community development corporations.  Skelton is also using the power of cable television to publicize Internet training programs in Portland.  Working with the Sabin Community Development Corporation, which has 15 computers available to the community with Web access, Skelton cablecasts Sabin’s training classes on one of Portland’s access channels.  Skelton believes that showing training classes as they occur will diminish people’s hesitancy about coming in to get computer training, as they see how non-threatening the Internet really is. 

iii.        A Neighborhood Listserv and the Southwest Community Plan

Portland’s high level of community activism, its tradition of careful planning, and its tech-savvy citizenry combined in the late 1990s to stymie a community planning initiative in southwest Portland.  When it established its urban growth boundary in 1980, Portland also set in place a planning process by which communities throughout the city periodically develop a community plan in conjunction with the Portland Bureau of Planning.  In 1996, the Planning Bureau circulated the Southwest Community Plan (SWCP), including a map outlining proposed zoning changes.  A number of the changes permitted more dense development in some neighborhoods in southwest Portland.  This was in keeping with the philosophy underlying the urban growth boundary.  But in the minds of some residents of southwest Portland, the proposals threatened the streams running through the area as well as the character of southwest Portland itself.

In 1996, email was the primary means of communications among neighborhood leaders who had concerns about the Planning Bureau’s proposal.  The number of people on the email list grew, and in April 1997, a listserv was established to the handle the volume of traffic.  Eventually 100 people in southwest Portland subscribed to the list.

The listserv served an analytical as well as informational function for participants.  In particular, it allowed activists to talk through the technical issues surrounding the Planning Bureau’s proposal, such as the threat to steelhead trout in the area’s streams.  The listserv allowed neighborhood leaders to sharpen their thinking and coordinate strategy for delivering their response.  This could have been done in neighborhood meetings, said the listserv’s founder, Jere Retzer, but the listserv was invaluable because it permitted frequent exchanges that would have been impossible at weekly or monthly meetings.  Moreover, the listserv forced participants to commit ideas to writing, improving the technical quality of the community’s response to the Planning Bureau.

Metro officials credit the listserv with hastening the demise of the original plan, which was shelved in 1998 after years of hearings and debate. By July 2000, the Planning Bureau had produced a new plan that it hoped would be acceptable to the eighteen neighborhood groups that comprise southwest Portland. 

The listserv is not as active today as it was at the height of the SWCP controversy.  However, where slow home Internet connections and relatively antiquated computers made anything other than text-based communication difficult in 1997 and 1998, today’s home computers make it easier for many residents to exchange planning maps more easily. As the debate over the SWCP continues, the listserv will be an important forum for the community’s discussions of the plan.

The Internet and Portland’s Economy

Portland’s economy has undergone a transition in past decades from a resource-based economy relying on logging to a center of high-tech manufacturing that has been dubbed the “Silicon Forest.”  Today, Intel is the largest private-sector employer in the region, along with a significant cluster of computer-display and other electronics manufacturers.  Many of these are spin-offs of Tektronix, a maker of testing, measuring, and monitoring equipment for the electronics industry, whose employment topped out at 27,000 in the 1980s but is down to about 5,000 people today.  As the company downsized, a large number of former employees started their own small technology firms in the Portland area.  To keep the economic momentum going in the New Economy, Portland is trying to develop a place for innovation to thrive, a pool of investment capital to fund business start-ups, and the bandwidth that will deliver multimedia content to residents of Portland and beyond.

i.        The Creative Services Initiative

Creative services refers to a cluster of industries whose missions are to design and produce content that is delivered over a variety of electronic media, such as CD-ROMs or, increasingly, the Internet.  A public relations firm is an example of a creative services business, as are the film and advertising industries.  As a general rule, creative service firms are small (often with a single proprietor), value flexibility, need high-speed data connections, and integrate technical expertise and artistic talent in their work. 

Portland already boasts more than 800 creative service firms employing approximately 13,500 people and between 1,400 and 2,000 sole proprietorships.  The sector has experienced twice the job growth rate of the Portland economy in recent years, 9 percent annually from 1992 to 1997 versus 4.4 percent for the Portland region.  It is also a high-wage industry; creative service employees average $44,000 per year ($55,000 for freelancers) compared with a regional average of $31,240.  The location of choice for Portland’s creative service companies is the Central City, where creative service firms account for 1 job in every 10.  Although creative service businesses serve local clients, a distinguishing feature of the sector is that it exports a lot of its output.  This means that bandwidth and Internet connectivity are indispensable.

The country’s large media and technology centers, such as New York, Los Angeles, Chicago, San Francisco, and Boston, dominate the creative service industry, but smaller cities such as Seattle, Denver, Minneapolis, and Salt Lake City also have significant creative service clusters.  Portland sees itself as competing with the second set of cities, and worries that it might be seen as a poor suburban imitator of Seattle.  To address Portland’s competitive disadvantages and capitalize on its existing strengths, business and civic leaders have undertaken a major initiative to promote creative services in downtown Portland.

The cornerstone of the initiative is the $6 million renovation of a building in northwest Portland to house creative service businesses.  The building is in Portland’s Pearl District, an area adjacent to downtown with many empty warehouses that was once a center of industrial activity.  The Pearl District is quickly being transformed into a more vibrant urban scene with multi-use buildings that have retail on the ground floor and lofts on the upper floors.  The Portland real estate market is driving the changes in the Pearl District; downtown is densely developed, the urban growth boundary discourages suburban growth, so turning to an area near downtown is natural.  The Pearl District also has a thriving arts community. It hosts a number of film and recording companies, and it is headquarters for the advertising firm Weiden and Kennedy, whose top client is Nike. 

By developing a space for creative service entrepreneurs, Portland development officials want to tap into the “funky factor” that they feel must be present for creative services to thrive.  This means that the building will have exposed brick walls, hardwood floors, and “offbeat” lighting.  With lots of open space within the building, developers hope to provide an environment that nurtures creativity among tenants.  Bandwidth is the final ingredient to the creative services center; the building will be wired to accommodate the most advanced communications systems a business may have.  This will not only facilitate exporting creative services products, it will also enable creative service firms to communicate with subcontractors in Portland (or elsewhere) that may operate out of their homes. 

Predicting the return of the city’s $6 million investment in the building is difficult, especially in light of the dot-com downturn, which lessens the demand for creative services.  However, the Pearl District enjoys development momentum independent of any city initiative, and its emerging trendiness suggests that the building will attract tenants.  The city is also embarking on a $50,000 national ad campaign to promote Portland as hub for creative services.  City officials hope that by providing a combination of amenities, the Pearl District building will attract the young minds that will sustain high wage job growth in Portland.

ii.     Promoting Entrepreneurship and Networks of Financiers

Although Portland has a well-developed base of technology companies, it lags other cities in the availability of venture capital.  In a recent study of 14 high-technology centers done for the Brookings Institution, Portland State’s Joseph Cortright found that Portland accounted for 0.8 percent of total venture capital investment nationally and only 1.8 percent of the venture capital invested among this elite group of cities, which account for nearly half of all venture capital investments in the United States. Businesses are taking steps to address the problem through the Oregon Entrepreneurs Forum and the Portland Angel Network.

The Oregon Entrepreneurs Forum (OEF) was established in 1991 as one of 18 worldwide Enterprise Forums founded by the Massachusetts Institute of Technology.  Since 1997, when it merged with the Oregon Young Entrepreneurs Association, its membership has grown from 100 to over 1,200 members.  Much of that growth has come from the Portland area.  To promote local entrepreneurial activity, the OEF holds between 35 and 40 events per year. Many are networking opportunities, but a number are designed to match entrepreneurs’ ideas with business expertise and investors.  OEF’s Venture Oregon and Angel Oregon conference is a yearly chance for entrepreneurs to come together with venture capitalists and wealthy investors to make deals. Companies have 10 minutes to make a presentation to a panel of financiers, pitching ideas to them like writers pitching movie ideas to Hollywood producers.  In 2000, two dozen companies made business pitches for $139 million in funding; financiers committed $20 million to the competition.  Not all the companies seeking funding are Internet companies, but 12 out of 16 business plans highlighted in a Portland Oregonian article relied on the Internet to carry out the business plan. 

The Portland Angel Network (PAN) is a less formal vehicle that brings together successful Portland business people who have an interest in financing promising start-ups, and it also reaches into the business community to try to increase the supply of angel financiers.  Many wealthy investors prefer to keep a low profile about their business investments, and many established business people have been hesitant to invest in New Economy companies, lacking the expertise to make informed judgments about a business plan’s prospects in this sector.  By bringing successful technology entrepreneurs together with “old economy” business people, PAN has broadened Portland’s base of angel investors.

iii.   Telehotels and Competitive Access Providers

In trying to spur investment in high-speed Internet infrastructure, Portland is fiercely protective of local prerogatives, which sometimes places it at odds with the city’s desire to be a New Economy hub.  The city gained a national reputation in its battle for open access for Internet service providers to cable systems that offer Internet service.  This legal battle may have, in the short term, lessened incentives for investment in bandwidth in the Portland area.  The city has also been beset by telehotels, several of which have been proposed for the downtown area.  Telehotels fill buildings with telecom equipment rather than people, and this conflicts with Portland’s desire for a densely packed downtown filled with people and jobs.  Yet there is clear demand for the high-speed data connections that telehotels provide.

The open access issue turned on whether the Mt. Hood Cable Regulatory Commission—the regional authority in the Portland area that regulates cable TV—could compel AT&T to allow any Internet service provider to connect to AT&T’s cable system.  The litigation gained Portland the reputation as “the mouse that roared” over whether local authorities could exert control over the Internet and the new communications infrastructure.  Industry actively opposed Portland’s lawsuit, and the Federal Communications Commission declined to intervene on Portland’s behalf.  But Portland persisted for two reasons.  First, the recommendation for open access came from a grassroots panel that advises Metro government on cable policy.  Second, Portland is home to many independent ISPs, making the suit a cause on behalf of small businesses in Portland. 

The city lost the battle but won the war.  A federal judge ruled that the city had no authority to dictate open access provisions, but that cable companies were common carriers for the purposes of providing Internet access over cable infrastructure, meaning the Federal Communications Commission had authority to impose open access on all cable companies—something it has since done.

It is difficult to know whether Portland’s lawsuit delayed the rollout of broadband in Portland or elsewhere.  But city officials were clearly concerned about this possibility.  To address this, they asked the telecommunications industry to come up with plans for a citywide broadband network.  In exchange for moving quickly on franchise negotiations, city officials sought to ensure that the provider would wire all neighborhoods with broadband, not just high-income areas where demand would appear earliest.  Two companies, RCN and Winstar, agreed to build their broadband network throughout the city.

The other telecom infrastructure issue that has created difficulties for Portland is telehotels.  Telehotels are a vital link in providing high-speed Internet access.  They are like boarding gates at the airport for loading and discharging passengers; if data do not have an efficient way to get on the high-speed Internet trunk lines, an inefficient bottleneck slows down the delivery system.  Technically, the best way to avoid the bottleneck is to locate the Internet boarding gates near customers—generally in central city business districts (see Box 2).  But in Portland’s highly developed downtown, telehotels and creative service firms are  competing for space, and creative services bring people downtown while telehotels do not.  One proposed telehotel, the Pittock Block, illustrates the conundrum nicely.  This huge old office building on the northern edge of southwest Portland is located near the Pearl District, making it equally valuable for housing creative service firms or the telecommunications equipment they need to get on the Internet. 

From a policy perspective, the city cannot coerce the developer of the Pittock Block to abandon its plans for a telehotel or develop it elsewhere.  The only ordinance on the books about telehotels in Portland requires that the first floors of buildings in Central City have space for retail businesses.  At this point, city officials hope that the creative services center in the Pearl District will be adequate incentive for telehotel developers to search for sites in that more spacious section of Portland.  For now, Portland will monitor plans for telehotel development.  With the cooling of the Internet economy, the proliferation of telehotels may subside on its own.

The Internet and Social Capital in Portland

The breadth and intensity of interest in the Internet is the most striking feature of how institutions throughout Portland are engaging with the Internet.  A youthful, educated, and entrepreneurial population has prompted an ambitious range of Internet-related activity.  From the Neighborhood Pride Team’s computer classes to the Metro cable commission’s efforts to shape national telecommunications policy, Portlanders are sophisticated activists when it comes to exploiting the Internet’s opportunities. 

A remarkable part of Portland’s adaptation to the Internet has been the focus on content.  Several initiatives began explicitly to develop content. The Portland Area Housing Clearinghouse is aimed at creating and aggregating local Internet content to improve service for low-income people, and the Southwest Community Plan used the Internet to deliver high-quality information to elected officials.  The Trillium Artisans site is a direct outgrowth of the Neighborhood Pride Team, and the number of neighborhood residents developing Web pages for home-based businesses shows that individuals are actively engaged in creating Internet content for entrepreneurial reasons. The creative services initiative also focuses on content; it is intended as a place where multimedia firms can create content.  Portland’s focus on content may be no accident; the city, after all, pioneered the “open access” lawsuit whose objective was to preserve the Internet as a place where information would be available across all systems.

Portland’s energetic approach to the Internet sometimes comes at the cost of lack of coordination and awareness, at least at the community level.  Different segments of the community have embarked upon community computing programs at different times; with better coordination, newcomers could learn best practice from places like the Neighborhood Pride Team and avoid costly mistakes.  Greater coordination could also give community-computing activists a stronger voice when seeking city funding.  The lesson from the SWCP is instructive here; the voice of residents there was strengthened by the coordinated public campaign that the listserv greatly facilitated.  So far, no coherent voice has developed to advocate on behalf of community computing initiatives.

  1. John P. Kretzman and John L. McKnight, Building Communities from the Inside Out: A Path Toward Finding and Mobilizing a Community’s Assets. Chicago: ACTA Publications, 1993.