No one would be surprised to hear that Portland — and the state of Oregon as a whole — has undergone substantial low-income displacement and property value growth in recent years. As one of the primary destinations for tech firms and the home of commercial giants like Nike, Oregon has seen an influx of luxury homes, white-collar jobs, and thicker paychecks. The changes have been rapid and concentrated. If “gentrification” is a new national buzzword, it has weighed heavily on Oregonians for some time now.
Lower-income neighborhoods are stereotypically associated with higher crime rates, dense population, and poor infrastructure — all factors that could raise car insurance rates. Detroit, Michigan, consistently ranks number one on the list of cities with the highest car insurance.
Gentrification in Oregon might be old news, but the correlation between Oregon car insurance prices and the steady evolution of gentrification is not — in fact, it hasn’t been assessed before. The Zebra gathered and analyzed four data points from 2011 to 2016 to determine whether or not gentrification had taken place in a certain zip code: number of housing units, average home value, average household income, and mean household income.
We assigned zip codes average rankings to create a composite list of the most gentrified zip codes in Oregon. The 10 most gentrified areas became our final data set.
There was a positive correlation between median home value changes and household income changes. For example, zip code 97467 — comprising Winchester Bay, Reedsport, North Fork, Ash, and East Gardiner — saw a 32% decrease in median home value, and a 20% decrease in mean household income. While 97392 (Marion County) saw a 25% increase in median home value and a 33% increase in mean household income. Despite these differences, both these zip codes saw a 27% increase in car insurance.
Worth More Than You Owe
While we used 10 distinct zip codes for our study, a few stood out. Oxbow, Oregon (97840) had the highest median home value change, starting out at $27K in 2011 and exploding to more than $333K in five years — a 1,112% increase. Yikes! Zip code 97732’s (Crane) home values plummeted during the five-year period, falling from an average of more than $500K to less than $185K.
The median income in Kent — in the 97033 zip code — shifted monumentally, dropping from $73K to almost $24K, a 436% decrease in median income. The largest uptick in median income was Curry (97476), increasing from $20K to $82K.
Big Surprise: Oregon Car Insurance Goes Up
Over five years, NO Oregon zip codes enjoyed decreases in car insurance rates, despite increases in property values or income. According to our data, however, the city of Portland’s zip code 97266 experienced the largest percent increase in auto insurance costs, rising 32% from $1,221 to $1,797 per year. The zip code’s average car insurance rate is approximately $370 more than the national average.
Bend, Oregon — Central Oregon’s largest city — saw the smallest car insurance price increase, from $948 to $1,242. The 97701 zip code had the lowest percent change, 23%.
We next compared the data sets for home value and household income to our car insurance-by-zip code data. We compared the 10 largest increases and decreases between zip codes to provide a sense of shifts over time. There was no discernible correlation between insurance price increases and home value or household income. Despite significant shifts in home value and household income, the average Oregon car insurance rate increased by roughly 40% in five years.
While cities like Portland continue to rank among America’s Best Places to Live and Best Places to Work, few newcomers experienced the overhaul of poorer zip codes that occurred in tandem with the expansion middle- and upper-class neighborhoods. As housing prices rise, low-income residents are displaced, and the cycle continues; these residents are victims of consequence against whom public action is rarely intentionally malicious, but is certainly thoughtless.
Car Insurance vs. Home Value and Income
- To compile this report, The Zebra analyzed data from the 2011 and the 2016 American Community Survey to determine which ZIP codes experienced the largest growth in terms of median home value, median household income, mean household income and housing units.
- We ranked the ZIP codes on all four factors and created an average ranking to determine which areas experienced gentrification from 2011 to 2016.
- Then using our own data from the 2018 State of Insurance Report, we compared area codes that witnessed the largest percent changes in Oregon car insurance.
- Our team focused only on ZIP codes with more than 2,000 occupied housing units in the years 2000 and 2016.