Three Cities, Three Bets on a Comeback: A Tale of Four Cities, Pt 4

San Francisco has wealth and a sustained strategy. Seattle has signs of recovery. Portland has ideas—and the hardest road ahead.

By David Therkelsen and Terry White

Deep-blue cities have been especially susceptible to urban pathologies we’ve written about so far. In the name of personal freedom, they’ve been reluctant to break up encampments. Until recently, they’ve not confronted addiction, even fentanyl addiction, forcefully. And do you want to live on the street? Here, we’ll give you a tent.

In this article, we’re looking at the economic decline of cities, their downtowns in particular. This is less of a blue phenomenon. Not zero, by any means. Cities that have been governed from the far left don’t like businesses very much, large ones especially, and when they fail or move away, far-left leaders’ knees tend to jerk in the “good riddance” direction.

But still, the political left did not bring about the COVID-19 pandemic, and they did not invent work-from-home. These are the large reasons why cities and their downtowns have declined, why their reputations are in tatters, why the cost of local government has been pushed from those big buildings downtown to the bungalows and ramblers of ordinary residential neighborhoods.

It’s probably clear by now, if it wasn’t from the outset, that everything affects everything else. Sure, the pandemic sent everyone home and a lot of people stayed home, emptying out the big office buildings and sending their owners to the complaint line at the assessors’ office.

But empty commercial districts attract encampments, and they open doors for crime. All of this caught in living color in newscasts, which reach far beyond city boundaries. Civic reputations plummet. The pandemic is behind us, but your favorite office building is still empty, paying a fraction of the property taxes it used to pay, and standing as Exhibit A of urban decline.

The cities we’ve been studying have each attempted urban revitalization. Blue and lefty though they may be, by now they all operate from the understanding that a prerequisite to revitalization is fixing the social environment. People with behavioral or addiction demons need to be effectively cared for. People who might come downtown for a dinner and show or a sports event need to feel safe. From that baseline, the three cities have chosen different strategies and their results have varied widely.

While Seattle, Portland and San Francisco all have a ways to go to full economic strength, we’d bet on the City on the Bay as best positioned to regain powerhouse status. Of course, San Francisco has some advantages over the other two. It has the incredible wealth that comes with being the high-tech, and even more, the AI capital of North America. It attracts upwards of half of the entire $280 billion U.S. venture capital expenditure. Starting well before the pandemic, the city has sustained an honest-to-goodness revitalization strategy, now being pursued tenaciously by a high-energy mayor and a fairly well-aligned city and county government.

(Uniquely, in San Francisco the city and county are one and the same. They share boundaries, and they share elected officials.)

The city faces formidable headwinds as well. Incredibly high cost of living may be at the top of the list. You’ll pay north of $1 million for a two-bedroom, two-bathroom home; you may need to go to a distant suburb even to find that. If you prefer a small apartment, plan to spend $3,500–$4,500 a month for a one-bedroom unit. If you produce AI training programs, you can probably manage this just fine, but if you are a restaurant server or an accountant in a small business, ends won’t easily meet.

(How about a police officer? You might do okay. You’ll start at about $120,000 a year, and after six years you’ll earn about $160,000. Add in overtime and your six-figure pay will have a first digit of at least 2.)

Office vacancy rates have, for years, hovered around 45%, caused in part by the departure from the city of X (née Twitter) and Whole Foods. A weak commercial real estate market may drive this, but some of the high vacancy rates are self-inflicted. Rigid planning codes require almost all new buildings to include ground-floor retail space, whether or not developers and owners can foresee demand for retail. The codes often specify the type of retail: a given location may have to be a restaurant. If the restaurant fails, then it must be replaced by another restaurant. As if the failure did not signal lack of demand for a restaurant in the spot! The building codes’ emphasis on retail seems not to recognize that e-commerce has happened. Build it and they won’t come.

But for all this, San Francisco is making good progress—not everywhere, but in key development districts. Mission Bay may be the gem in the crown. Twenty years ago it was a run-down industrial district, with grungy Superfund sites that needed to be cleared. They were cleared, and the area is home to Uber, Visa, OpenAI, and the San Francisco Giants. The State of California has invested billions in two hospitals and a University of California campus. Vanderbilt University has committed $72 million to establishing a campus. A longer-range vision contemplates five to six universities opening satellite campuses downtown, sharing facilities and projecting the dynamism of 10,000–15,000 students.

This and much more revitalization progress didn’t just happen. Numerous private- and public-sector initiatives have been brought to bear. Some 17 Community Benefit Districts operate across San Francisco neighborhoods, with clean and safe street programs as a core focus. Tax-increment districts have been used, with emphasis on infrastructure. A landlord-sponsored Vacant to Vibrant program has provided subsidies and seed money for pop-up retail in vacant storefronts, with the goal of converting them to permanent tenants; newer technologies like robotics and drones have been early occupants. The Chamber of Commerce maintains a bricks-and-mortar store in a first-floor location that’s become a community hub: there are decorative windows revealing a coffee shop within, and facilities for speakers and panel discussions; it’s a town square.

Relatively new to the party is 49-year-old Mayor Daniel Lurie, who took office in 2025. An heir to the Levi Strauss fortune, the mayor has created a $25 million business revitalization fund; it’s been used to activate entertainment zones and cleaner streets. He’s also fostered multiple public-private partnerships. Though these have been credited with helping some neighborhoods boom, it’s been reported that the benefits are far from uniform across the city; there are winners and losers.

Much longer tenured in civic leadership is Rodney Fong. A fourth-generation entrepreneur, Fong leads the city’s COVID economic recovery task force, was on the planning commission for eight years, and now heads the San Francisco Chamber of Commerce. His advice for cities like Minneapolis: invest in education at all levels; maintain proximity to world-class universities; and develop local youth to compete for high-quality jobs being created locally. Above all, Fong says, maintain a long-term, unified civic vision.

Let’s turn to Seattle. Just before the pandemic, television screens across the country were ablaze with ugly images of downtown streets taken over by addiction and tent cities. A visitor today will see little of that. Addiction and behavioral health issues are still present, but have largely been removed from the central business district.

Still, along with San Francisco, Seattle has the highest business vacancy rate in the country, driven partly by policies perceived by big employers to be hostile—and those businesses, Amazon and Microsoft among them, have shifted much of their employment to suburban Bellevue. New businesses have taken over some of the abandoned spaces, but that’s been far from a panacea; the city now leads the nation in new-business failure rate.

A civic angel or devil, depending on whom you ask, is the city’s JumpStart tax, which took effect in 2021. It’s a payroll tax, levied on employers with payroll exceeding $9 million and with at least one employee with compensation greater than $200,000. (Note: this is a low bar.) The tax, of course, hits large employers hardest and is why some of them have shifted their operations outside of the city.

On top of the JumpStart tax, incomes over $1 million annually are subject to a 5% tax.

JumpStart is an easy target for critics of city finances (at the time of our visit, the city was struggling with how to overcome a $175 million budget deficit). But some say not so fast. City Council President Joy Hollingsworth said without the tax the city would have long since been in massive deficits with lots of services gone. She acknowledges that Bellevue has benefited from the aggressive taxation, but so has Seattle.

Downtown Seattle clearly appears healthier than in its days of dubious TV stardom, but it may be more correct to say its social pathologies have shifted than ended. From 2019 to 2024, it’s had a slight uptick in visitors, though hotel room demand remains slightly down. Average daily foot traffic is up from 2023. The Seattle Office of Economic Development’s Back to Business Program has a Storefront Repair Fund and a Storefront Security Fund that help small businesses fix damage from vandalism and improve security.

Data was scarce, but all this is probably helping; one could conclude Seattle is not awful but a long way from great.

By several accounts, Seattle put on a great show as a host city for the FIFA World Cup games; the entire world saw the city at its best. This outstanding showing, replacing lingering images of urban blight with visuals of a dynamic and capable city overlooking Puget Sound, might be Seattle’s best bet for rehabilitating its civic reputation. We’ll hope they win that bet.

So… San Francisco looks poised to succeed no matter what. Seattle may ride the FIFA World Cup to better success. Now we come to Portland. Poor Portland! We want them to succeed because we met so many community leaders working hard for their success! Optimism was found easily. But warranted optimism? That’s harder to find.

Portland was a great city for a long time. From its roots in lumbering and other natural resources, it attracted entrepreneurs who came for the natural resources and stayed for the opportunity to build businesses. Perhaps the saddest statistic we encountered in our project was this: in 2016 the Urban Land Institute ranked Portland third among 78 metropolitan areas in attractiveness for investors. Nine years later it had plummeted to 80th among 81.

What happened to cause this ranking to fall off a cliff? Let us count the ways.

• Post-George Floyd riots, national media portrayed Portland as chaotic.
• Fentanyl became a largely unanswered crisis.
• Drugs were decriminalized.
• Other cities sent their homeless to Portland.
• A billion-dollar Broadway Corridor redevelopment collapsed.
• Its developer went around the country warning others not to invest in Portland.

Seattle and San Francisco had their own variations on all of these themes. But they had means to fight back: they were major corporate-headquarters cities; they had great inherent wealth; they had multiple major sports franchises bolstering the reputations of their cities.

Portland had just two major corporations within its boundaries, Intel and Nike; both have had their own problems with growth and both missed the AI boom. The area is a net exporter, so tariffs have hit hard.

Perhaps the largest current problem facing the city is that new ownership of the Portland Trail Blazers is pretty disenchanted with the city’s unwillingness or inability to bring the Moda Center to higher standards, and may move the city’s one major-league franchise elsewhere. Can a big city get by without big-league sports? Sure, just ask anyone in Rochester or Louisville or Fresno, or Albuquerque. But even in those cities, having Niagara Falls or the painted desert is a big help.

Plain-spoken city councilor Dan Ryan, who says Portland’s revitalization will be complete when “for lease” signs are no longer abundant, told us loss of the Blazers will leave no other path to prosperity. That’s how a city’s reputation gets exported nationally, he said. Another councilor, the body’s reluctant president (a city council that’s often split 6–6 required 13 ballots to pick its leader), thinks Portland should try to keep the franchise—though it will not be inexpensive to remodel Moda Center to NBA and owner standards—but other factors may be more important to revitalization.

Council President Jamie Dunphy’s prescription begins with a large dose of realism. Downtown office demand is not going to return, he argues. Downtown economies can’t be rebuilt around 9–5 workers spending ten bucks at lunchtime at the Subway.

Some of the now-overbuilt office capacity can be converted into no-step walk-up apartments for older adults, Dunphy says. Even more space can be used to create an arts vibe. “It’s more interesting to look at a person on a pottery wheel or a dance practicing or a painter doing something than boarded-up plywood.” He’s already secured $300,000 to connect landlords with artists to activate storefronts. It won’t be full-scale permanent leasing, but temporary activation that makes streets feel lived in, lit, alive, and less threatening.

Ultimately, Portland’s identity, its brand, can be built around music, Dunphy, himself a former musician, says. “Portland is the fourth-largest music city in America, but we’re the only one that hasn’t used our identity as a music city as a tool for economic development.” But this strategy will require focus. Dunphy warns his own city, as well as cities like Minneapolis, to find clarity about their regional identity. Don’t try to be 15 things, he says.

If focus is what’s needed, meet Mayor Keith Wilson, a lean and intense former company CEO who, since becoming mayor in 2025, has brought laser-like focus to three goals: end unsheltered homelessness, reduce pressure on public safety, and revive the city’s economy. Fulfilling each goal helps accomplish the others, Wilson says, and accomplishing them all will result in restored civic vigor. As to identity, Mayor Wilson says innovation and lifestyle, culinary excellence, and women’s sports will help Portland once again be a city people want to come visit, and want to live in.

There’s no shortage of smart, sincere leaders full of ideas about revitalization. Unfortunately, there is a shortage of other assets that are much more abundant in Seattle and San Francisco: wealth, major corporate presence, citywide, multisector coalitions driving for success. Perhaps Portland’s best hope is, as the city council’s president urges, to adopt plans that are realistic and modest—to build an identity around music and the arts, and get the fundamentals of city governance right.