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I’m new to Portland area and need advise from you all about buying a house in the west side of Portland. It just happens that the area that I’m interested in could be in a different area combination:
a. Portland city, Multnomah County
b. Portland city, Washington County
c. Beaverton city, Washington County
I’m trying to figure out which area that I should choose, related to the future of the city. I’m leaning toward Beaverton city, Washington County but the house that I like is located at Portland city, Washington County. What worries me is the future of Portland city and if property owner would be responsible monetarily on city debt. I will explain my reasoning below.
1. Multnomah or Washington County?
A friend suggested that I should buy a house in Washington County. His reason: Washington County is fiscally is more responsible (tax less) and has better school district.
First example, between 2003 to 2005, Multnomah County had income tax 1.25% to fund its school district (Ref 1)
Another example is that Multnomah County spends twice as much money per resident on its library as the national average. Also, Multnomah County hasn’t audited the library’s performance since 2004. (Ref 2). I do not know how frequent should it be audited but I believe the GASB should happen annually or every other year.
Property tax rate in Washington County is also 15% cheaper than Multnomah County property tax rate(Ref 3)
Students in Washington County public schools generally have better scores than their counterpart in Multnomah County (Ref 4)
Would you agree with my friend’s assessment?
2. Portland or Beaverton city?
Another friend pointed out to me about the possibility that Portland city could go bankrupt (Ref 5). The point of concern: police-fire-disability-retirement pension system. I did some research on the duality of county and city government (Ref 6 and Ref 7) and found out that Portland city (not Multnomah or Washington county) is the one who responsible for police and fire department retirement.
Ref 8 and 9 do not put Portland city in a good light. “Portland, Oregon, had virtually no assets to offset unfunded liabilities of $2.3 billion in fiscal year 2009 in its pension and disability plan for police and firefighters hired before 2007. Meanwhile, the plan covering the rest of Portland’s employees was estimated at 86 percent funded, with unfunded liabilities of $453 million. Portland funds the retirement costs of police and firefighters hired before 2007 on a pay-as-you-go basis, meaning the city relies on property taxes each year to pay benefits and does not attempt to set aside money for the future to meet those liabilities”.
This unfunded liability combines $2.75 billion (according to PEW report or $2.9 billion according to Portland city audit 2013) represents 229% of Portland city revenue in 2012 ($1.6 billion). This is in addition to Portland city debt $3.2 billion (or $5,496 per resident).
Other things that concern me are in Ref 10, 11, and 12.
Will Portland property owner responsible in the event of Portland city Chapter 9 bankruptcy (Ref 13 does not rule it out that possibility from Oregon law perspective)
Any advice?
Just to be clear, there's really only a small sliver on the western edge of the City of Portland in Washington county, just as there's a small piece of Portland in Clackamas County near Lake Oswego. However, there are a lot of street addresses in Washington County (particularly unincorporated Washington County, but also some cities like Tigard) where the official USPS address is "Portland, OR." These areas are not in the Portland City limits.
So odds are, if you're in City of Portland you are in Multnomah County, and if you are in Washington County you are not within the boundaries of the City of Portland. I know, clear as mud.
Anyway, I don't think Portland will go bankrupt, but the property taxes if you are in City of Portland are quite a bit higher than WashCo. Partly because property values are so much higher, but there are other things like levies that bump up the bill in MultCo as well.
I think PortlandMaps gives you the most recent few property tax bills for a particular property if you want to look some things up. There's also a mapping application for the Washington County Assessor that does the same thing.
on #1 I agree with your friend. I used to live in SW Portland (washington county - Garden Home neighborhood). Along with the Portland (multnomah vs washington) comparisons, I'd have to check the high school ratings but I believe that the HS on the western edge of Portland in Multnomah County (Wilson HS) is better than Beaverton HS, which is the HS for the Portland/Washington Co boundary area. I don't know much about the city of Beaverton itself, other than the traffic can be awful depending on where you are going.
Unofficially, I use this map to determine which county and which city the house is at. Multnomah County - Oregon Zip Code Boundary Map (OR)
It uses USPS zip address.
Also, I depend on the house MLS listing to determine the city (Portland or Beaverton), but yes, PortlandMaps will have the official information.
It is kind of confusing.
Take this hospital address: 9205 SW Barnes Road, Portland, OR 97225.
Also this school: 4200 NW 185th Ave, Portland, OR 97229
According to PortlandMaps, they are located at Washington county and Portland city.
My understanding, the west border of Portland city is on NW 185th Ave. There is this US26 exit 185th Ave that intersect three cities. Northeast side of that exit belongs to Portland. Southeast side of that exit belongs to Beaverton. And West side of that exit belongs to Hillsboro.
How do you know if it really belongs to Portland city or not? If not USPS address, where could I get an official information?
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The fears of City of Portland going bankrupt are like the old Jewish joke:
A man comes to his rabbi and asks
"Rabbi, is there going to be a war?"
"No, there will be no war. But there will be such a struggle for peace that a single stone won't be left standing"
Portland will not go bankrupt in the foreseeable future. But the effects of the financial mismanagement are already felt by the taxpayers (that is everybody who lives here, whether they pay the property tax directly, or indirectly through rents), and are likely to get worse as the time goes on, due to some of the factors you've mentioned.
Good homework BTW, but you forgot to mention the "Sustainable" money sink, another example of mistaking wishful thinking for reality.
Property taxes in Multnomah County are already 30 to 50% higher than in the surrounding Washington and Clackamas Counties. I think the 15% figure you quote in ref 3 is misleading because it compares apples to oranges. Property tax rate in Oregon is strongly influenced by the age of the house, the older, the lower rate. City of Portland is full of old, decrepit houses. Washington and Clackamas Counties have a lot of new or newer construction. If you compare the tax rate for houses of similar age (as I did when house-shopping), the difference is closer to my figures.
And what you, the taxpayer, get out of those higher taxes? Rhetorical question, because you answered yourself already.
In conclusion: don't buy in Portland (or Multnomah County). Almost anywhere in Wash-Co or Clackamas-Co is fine, as long as you take your commute in consideration (typically even worse than PDX proper).
But you knew that, right, and asked your questions already knowing the answer, just like Ludwig Siebkron from John Le Carre "A small town in Germany" (one of the best spy novels ever written, 2 classes better than anything by Tom Clancy).
Leave Portland to hipsters to fund the city mismanagement through their inflated rents, while they delude themselves with "walk-able neighborhood" (and hour-long work commute).
PS. I am personally impressed by Washington County. I think the taxpayers here get a great deal for their $$. It is a civilized place, with well-developed infrastructure and good services, yet the property tax rate is very reasonable. I am also impressed with the WashCo "bureaucracy". In my various dealings with them they were efficient and helpful, even though they did not have to be in one case (when I messed-up something).
Last edited by skiffrace; 09-17-2013 at 09:00 AM..
How do you know if it really belongs to Portland city or not? If not USPS address, where could I get an official information?
When you enter the address into Portland Maps, it gives you the jurisdiction at the top left, just below the "PortlandMaps" header. So for your address on SW Barnes, Portland Maps reads, "9205 SW BARNES RD - WASHINGTON COUNTY" indicating that the address is in unincorporated Washington County. Same with the SW 185th address.
Contrast that with this address: 501 SE Hawthorne Blvd. For this one, Portland Maps reads, "501 SE HAWTHORNE BLVD - BUCKMAN - PORTLAND" giving the neighborhood (Buckman) and the city (Portland). Or this address: 10380 SW Crestwood Dr. in Portland Maps reads "10380 SW CRESTWOOD DR - BEAVERTON" so this one is in the city of Beaverton.
Again, I'm guessing there may be a couple dozen (at the most--maybe far fewer) Washington County addresses in the West Hills that are actually in the City of Portland jurisdiction, so the odds that you would be looking at one of those properties is virtually zero. So the bottom line--if you are looking in Washington County, with very few exceptions you can pretty much ignore the "Portland, OR" part of the USPS address.
Portland Maps is not the best place to get information about Washington County addresses though. Try InterMap for more information. This site lists the jurisdiction very clearly when you go to the "Districts Overlay Information" link.
Skiffrace,
Actually I like Portland city and its residents. Buying a house is a big and long commitment and I want to be sure that in 20 years there would not be any surprise in the city finance.
Jjpop,
you really open my eyes on this matter. Something that I did not expect to find out. Appreciate your help.
This is what I found out:
FAQ on Portland City Arts Tax (Ref 14) has the important info:
How do I know if my address is in Portland?
If you are in Multnomah County, you can easily check your address in Portland Maps to see if you are within the city limits of Portland. Go to www.portlandmaps.comand enter your address. Click on the "Assessor" link towards the top of the page. Check your Tax Districts within the "Property Description" section. Tax District 130 is the City of Portland. If your address has this tax district, you reside within the City of Portland.
If you are in Washington County, you can check your address at Tax Statements. If your property tax statement indicates that you have been assessed property taxes by the City of Portland (City - Portland), then you are considered a Portland resident.
So I compared the property tax sheet of three addresses:
House A. Portland City, Multnomah County. It has Tax District 130 (City of Portland), Multnomah County, Port-Portland. It does not have info on Fire Dept tax code.
House B. Portland City, Washington County: has Code Area 051.50. Tax Coll-Portland, Washington-County, Port-Portland, Fire-TV Fire and Rescue. There is no City row (interesting, may be because it is in unincorporated city).
House C. Beaverton city, Washington County: has Code Area 051.51. Tax Coll-Portland, Washington County, Port-Portland, City-Beaverton, Fire-TV Fire and Rescue.
Based on this information, I understand that House B (USPS address = Portland OR 97225) is not part of Portland City because its property is not taxed by City of Portland (tax district 130) and the occupant does not need to pay Portland City Arts Tax (I verified this with a friend who lives in this area).
One other thing that concerns me is the possibility of annexation of that area (House B) by Portland City (example Ref 15). Hopefully it will not happen because of strong neighborhood voice.
One other thing that concerns me is the possibility of annexation of that area (House B) by Portland City (example Ref 15). Hopefully it will not happen because of strong neighborhood voice.
The link you provided is Hayden Island - well within Portland's rights to annex as half of the island is already "City of Portland." The other half is a wild life preserve which for most people is a reason to resist the annexation in the first place.
The area House B is in won't be annexed anytime soon as it is in the Urban Growth Boundary and unincorporated Washington County. Portland would have to submit a request to Metro (the regional governing body,) to start proceedings to remove that land from the UGB. Then they'd have to actually annex it before any other City in the region got to it. The odds of it being pulled from the UGB are pretty low as only something like 10,000 acres a year (or maybe two years,) can be pulled and it has to be approved by a pretty wide selection of people and all the cities in the area.
Ronpdx, thanks for an interesting thread. If you "want to be sure that in 20 years there would not be any surprise in the city finance" this raises questions beyond 2013 rates of taxation and states of finance. Now you're looking at questions regarding the resilience of Portland, Beaverton, and the surrounding areas in the face of an evolving, much wider economy. I share these concerns about the future of our economy, and they are also attracting me to specific areas in and around Portland.
I don't want to misdirect the subject of this thread with economic modeling. Let it suffice to say that our economies are beginning a long period of change, the final result of which will be that rates of growth can no longer be used as a measure of success. This is an enormous, fundamental change and will not come easy for many. Luckily for us, the Portland metro area has already culturally embraced some of the resilience and sustainability traits that will help business and society move forward in the face of such an economic change. How resilience and sustainability are defined during our current fossil fuel-driven, highly automated, consumerist economy will evolve somewhat in future, but the fundamentals will remain the same.
All this to say, if you are thinking about twenty years into the future I would consider areas with strong walk scores, near community markets (as opposed to grocery stores), near medical facilities, and for a single family home rather than a condo - one with a fair-sized lot, south-facing roof space, and an enclosed garage attached to the house. Such factors are possible in a number of areas now.
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