Oregon used to be something of a bargain.
The state was a rare find on the West Coast, a place where homes were cheap by national standards, household products like groceries were relatively inexpensive and utility rates were the envy of many other parts of the country.
No longer. Oregon is now the nation’s 12th most expensive state, according to an annual federal survey that tallies the cost of housing, utilities and retail goods. Portland, Corvallis and Bend all rank among the most expensive metro areas in the U.S.
That’s a big issue for families all over the state who are trying to stretch their dollars to cover rents, mortgages, power bills and put food on the table. It’s also a big issue for Oregon itself, which is struggling to overcome years of stagnant population growth and can no longer cast itself as a good buy relative to other states.
The U.S. Bureau of Economic Analysis tallies regional costs every year using an index called “regional price parity.” It assigns a score of 100 to the average national cost of living and then compares those scores across states and cities.
(The index doesn’t account for variations in income among states. Oregon incomes are about 4% below the national average.)
Back in 2008, Oregon’s price index was 97.8. That meant costs were about 2% below the national average. Oregon ranked No. 23 among the most expensive states in the U.S., right in the middle of the pack.
Costs began climbing in the middle of the last decade and were 3% above the national average by 2024, according to the latest data. That made Oregon the 12th most expensive state.
What changed? Two things, primarily.
The first is housing costs.
Oregon homes were a little cheaper than average back in 2008. Now they’re 9% more expensive and a lot more expensive in some places. Housing costs in the Portland area, for example, are 25% higher than the national average.
The dramatic surge in the cost of housing resulted from the state’s failure to add new homes as the population grew during the 2010s, creating a chronic shortfall Oregon hasn’t made significant progress in addressing.
The second big change is utility prices.
Oregon utility rates were far below the national average back in 2010. Today, utility customers pay 7% more than the national average — an 18-point jump in little more than a decade.
Electricity rates have soared over the past decade as utilities have spent heavily on upgrading transmission lines and other parts of their aging systems and invested in wildfire mitigation. The utilities ultimately pass those costs on to customers.
The effect has been dramatic. Portland General Electric’s rates are up 65% in the past decade, for example, climbing twice as fast as inflation.
Affordability figures to be a major issue in this fall’s elections, both nationally and in Oregon.
Democratic Gov. Tina Kotek has been championing her work to bring down housing costs by expanding the supply of buildable land and promoting construction, though the state has made modest progress in the face of elevated interest rates and slow population growth — both of which reduce developers’ incentives to build.
The governor’s Republican challenger, Sen. Christine Drazan, is making an issue of prices, too. She argues Kotek has raised costs with taxes and fees and hasn’t done enough to bring down housing costs, though it’s not clear Drazan’s plans would be more successful than Kotek’s in making Oregon attractive to home developers.
This is Oregon Insight, The Oregonian’s weekly look at the numbers behind the state’s economy. View past installments here.
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