What makes Portland not ‘Business Friendly’ and how can we change that?

For decades, Portland, Oregon was one of the most attractive cities in America for entrepreneurs and employers. It offered a talented workforce, no sales tax, a strategic West Coast location, and a quality of life that drew creative thinkers from around the country.

But over the last several years, Portland’s reputation as a business-friendly city has eroded.

Companies are expanding elsewhere. Small businesses are struggling. Commercial vacancies are rising. While Portland still has enormous strengths, many business owners believe the city has become one of the most challenging places in the Pacific Northwest to start, grow, and sustain a business.

Here’s why.

1. High Tax Burden

Portland businesses face a growing stack of taxes and fees, including:

• City and county business income taxes

• The Metro Supportive Housing Tax

• Oregon Corporate Activity Tax (CAT)

• State corporate and personal income taxes

• Local permitting and regulatory fees

For small and mid-sized companies, these taxes reduce profitability and discourage reinvestment.

The Problem

When businesses compare Portland to nearby cities like Vancouver, Washington or Boise, Idaho, Portland often appears significantly more expensive.

A company owner who can relocate just across the river to Vancouver can avoid Oregon income tax entirely.

2. Lengthy Permitting and Bureaucracy

Obtaining permits for construction, tenant improvements, signage, or land use approvals can take months.

Business owners often cite:

• Slow response times

• Inconsistent interpretations of code

• Multiple departments with overlapping authority

• High permit fees

The Impact

Delays increase project costs and create uncertainty. For entrepreneurs operating on tight budgets, a delayed permit can mean the difference between opening and shutting down.

3. Public Safety Concerns

Crime, vandalism, and property damage remain major concerns for businesses, particularly in the central city.

Retailers and restaurant owners report issues such as:

• Shoplifting

• Graffiti

• Broken windows

• Employee safety concerns

The Economic Effect

Higher insurance costs, private security expenses, and lost customers all reduce profitability.

4. Downtown Recovery Has Been Slow

Since the pandemic, downtown Portland has struggled to regain office occupancy and foot traffic.

This has led to:

• Lower retail sales

• Reduced transit ridership

• Higher vacancy rates

• Declining property values

Businesses that depend on a thriving urban core continue to face headwinds.

5. Competitive Alternatives Are Nearby

Portland is no longer competing with distant cities only.

Nearby alternatives include:

• Vancouver, Washington

• Salem, Oregon

• Bend, Oregon

• Boise, Idaho

• Salt Lake City, Utah

These markets often offer lower taxes, faster permitting, and a more pro-business regulatory environment.

Portland’s Competitive Advantages

Despite these challenges, Portland still has significant strengths:

• No state sales tax

• Access to major transportation corridors

• A highly educated workforce

• Strong manufacturing and technology sectors

• Excellent quality of life and outdoor amenities

• Major employers like Nike, Intel, and Columbia Sportswear

The city remains a desirable place to live and work. The challenge is translating those strengths into a more predictable and supportive business climate.

Solutions to Make Portland More Business Friendly

1. Simplify the Tax Structure

City and regional leaders should evaluate overlapping taxes and seek ways to reduce complexity and lower effective rates.

Potential reforms:

• Consolidate local business taxes

• Increase exemptions for small businesses

• Offer tax credits for job creation and capital investment

2. Accelerate Permitting

The City of Portland could set firm timelines for permit reviews and expand expedited options.

Ideas include:

• Guaranteed review deadlines

• Dedicated project managers

• Online permit tracking

• Fee refunds if deadlines are missed

3. Improve Public Safety

Investing in police staffing, community policing, and targeted enforcement would help restore confidence among employers and customers.

Clean, safe commercial districts are fundamental to economic vitality.

4. Revitalize Downtown

Strategies to attract workers, residents, and visitors include:

• Incentives for office-to-residential conversions

• Public events and programming

• Streetscape improvements

• Enhanced transit safety

Notable anchors such as Pioneer Courthouse Square and the Portland Saturday Market can help drive activity.

5. Market Portland’s Strengths

Economic development organizations should aggressively promote Portland’s assets to prospective employers.

The Bottom Line

Portland remains one of the most naturally attractive and strategically located cities in the United States. It has world-class talent, iconic brands, and a strong entrepreneurial culture.

However, high taxes, regulatory complexity, public safety concerns, and slow permitting have weakened its competitiveness.

The good news is that these are solvable problems.

With focused leadership and a commitment to reducing barriers, Portland can rebuild its reputation as one of the best places in the country to start and grow a business.

The city has all the ingredients for success. It simply needs a policy environment that allows businesses to thrive.