Oregon is a beautiful state that offers tons of water and woodland activities.
It sits on the western part of the United States and has the Pacific Ocean as one of its borders.
Over 4 million people call Oregon their home which makes it rather tiny in comparison to other states.
Despite that, you’ll find that living in and visiting Oregon can be quite expensive when compared to other states.
Why Is Oregon So Expensive? (10 Reasons)
The average cost of living in Oregon is around $42,000.
Housing costs, ocean views, and a high income tax rate all contribute to the high cost of living.
Let’s look at some of these factors in more detail.
1. Housing Prices
One of the most expensive parts of living in Oregon is housing costs.
The average home in Oregon costs around $500,000.
That’s considerably higher than in many other places in the country.
There are several reasons why housing prices are so expensive.
The primary one has to do with the lack of land available for development.
The state government keeps close control of its land.
It doesn’t offer more land for development unless they think it’s required.
Since there’s very little land for real estate developers to use, it means there’s a lot of competition for existing homes.
People aren’t able to build new homes, so they have to choose the ones that people are selling.
Since there are usually more buyers in the market than sellers, that means buyers end up getting into a bidding war.
That drives up the price even further.
Housing prices become even worse when you’re in the city.
The land there is even more controlled.
A lot of people want to live in the city, too, to be closer to their jobs or amenities.
Since there’s a low supply of homes available but a lot of demand, it drives up the cost of housing.
Housing costs can take up a substantial part of your income.
When you have to spend a good portion of your paycheck to pay for the house and keep up with repairs, you will find that Oregon is quite expensive.
Since you paid more for your house than you would have elsewhere, it’s clear that the state is expensive.
A lot of people who live in Oregon aren’t native to Oregon.
They came from other states.
For example, a lot of Californians will move to Oregon because it’s cheaper to live there than it is in California.
Other people on the eastern shores of the United States move to Oregon, too, to escape harsh winters.
While Oregon has its winter, it isn’t usually as bad as what those on the northeast coast experience.
It’s a different kind of bad.
This makes the state more expensive because you have new residents coming in who have more money.
Since they lived in an even more expensive state, they have a certain household income that they accrued to survive living in that expensive state.
That means that they end up buying expensive houses, renovating them, and driving up property taxes even further.
They also spend a lot of money on other things since it’s cheaper for them.
This makes Oregon expensive, however, because it’s struggling to find housing for its native residents.
Californians and others come into the state flush with cash and can buy at those prices.
Native residents of Oregon, however, don’t have quite the same experience.
They have to work extra hard to afford a home.
Yet, those prices keep climbing because more people are moving to Oregon and taking up real estate.
3. High Income Tax
Oregon has one of the highest income taxes in the country.
That’s because they don’t have a sales tax.
When you go shopping in Oregon, the price you see is the price you get.
You can end up saving hundreds, if not thousands, of dollars each year.
Yet, Oregon still needs to generate money from taxes to fund the government and keep running.
Instead of a sales tax, Oregon makes up for it with income taxes.
Having a high-income tax means that more of your income gets taken out of your paycheck and sent to the government.
While this also means you might get a substantial tax refund, it still means you’re taking home less money than you would otherwise.
For high-income earners, the income tax can be especially harsh.
They could see a good portion of their income disappear into the government’s funds.
When you take less home, it means you have less to pay expensive housing costs with.
You have less to buy groceries with.
You have less to pay bills with.
Income taxes aren’t the only thing that makes Oregon expensive either.
They also have high property taxes.
Because housing is so expensive and land is so valuable, it means that property taxes increase.
Your expensive house becomes more expensive because the land it’s on is more expensive.
The bad thing about property taxes is that they increase with time.
If you’re making the same amount of money, you’re paying more in bills and taxes while taking less home.
Oregon may not have a sales tax, but it makes up for it with its income tax.
As such, living in Oregon is quite expensive because you take less of your paycheck home.
4. Increased Minimum Wage
Oregon is a fairly liberal state.
Some might even consider it a progressive state.
That sometimes means that running the state is a bit more expensive.
One of the things that Oregon has done which have made the state more expensive to live in is raising its minimum wage.
The base pay is around $13 with certain cities paying even more per hour.
This makes living in Oregon expensive in a few ways.
The first is that it means businesses have to pay their employees more.
Since businesses want to keep earning a certain revenue threshold, they need to reduce their costs somehow.
The most popular way that businesses do this is by raising their prices.
Services and products become more expensive to buy in Oregon.
This becomes a problem because the point of raising the minimum wage is to give workers the ability to have more buying power.
They’re not going to have that power if businesses keep raising their prices.
They end up falling back to the former status quo.
Another reason it makes Oregon expensive is that everyone else ends up raising prices, too.
Landlords, knowing that their tenants are earning more, are going to raise rental prices to make more money off of them.
Even businesses that don’t have minimum wage workers working for them might raise prices.
They know that the general public has more money to spend.
They want to earn more profit, too, so they raise their prices since people can afford the new prices.
Raising the minimum wage is a great way to give people the chance to buy more and afford to live.
However, unless businesses keep their prices the same, all it does is make the area more expensive.
5. Transportation Costs
Another big expense in Oregon is transportation costs.
Oregon is very focused on reducing its carbon footprint.
As such, it has done what it can to promote cleaner ways of travel.
That might mean biking or walking.
The city thus spends money to create more sidewalks and bike paths.
That’s taxpayer money.
They also have public transportation to encourage their residents to sell their cars and use public transportation instead.
That further helps reduce their carbon footprint.
However, public transportation can be expensive, too.
If it’s funded by the government, everyone is still paying for it through their taxes.
To encourage people to use bikes, walk, or public transportation, Oregon has also made it a bit more expensive to own and use a car.
As such, getting around the state can be quite expensive.
A lot of the state is also rural.
While it has big metro cities, there are several smaller towns scattered throughout the state.
If any of those residents want to travel to one of the bigger cities, they’re going to need to drive quite a distance, depending on where they’re located.
Since they live in rural areas, they don’t have things like bike lanes or public transportation.
Walking is out of the question.
As such, they have no choice but to use their car.
That means they get hit with high expenses just to travel around their state.
Residents also have to compete with tourists.
Oregon is a beautiful state that attracts lots of nature lovers to it.
Those nature lovers tend to use public transport, too.
Since there’s competition for a limited resource, the price to use it is higher.
6. Ocean-Front Views
Oregon sits on the Pacific Ocean.
Its entire western border ends at the ocean.
The fact that it has ocean access and ocean views also makes the state expensive.
There are tons of people and investors who want a piece of that real estate.
Some of the most expensive homes in Oregon are on the coastline.
That’s because ocean views are highly coveted.
They make any home immediately more luxurious.
A lot of people also have an interest in getting in on vacation homes.
Whether it’s by using Airbnb or advertising their home themselves, some people see the coast as an investment opportunity.
They know that tourists want to experience the beauty of the Pacific Ocean for themselves.
By having a vacation home right on the coast, they’re going to get a lot of interest.
If you’re vacationing in Oregon, you’ll find that the vacation rentals on the ocean are going to be the most expensive.
There are a lot of other tourists also trying to book rooms.
This makes coastal areas in Oregon have extremely high property taxes.
It’s also highly regulated.
Organizations within Oregon want to preserve as much coastline as they can.
That means there’s very little supply for a lot of demand.
That demand gets stretched across homeowners and business owners who want to open up resorts, restaurants, and other useful services that tourists may need.
7. High Gas Prices
You’ll quickly discover that Oregon has some of the highest gas prices in the country.
That’s because the Pacific Northwest, as a whole, has expensive gas.
It’s a problem that California and Washington also experience.
The primary reason gas prices are expensive in Oregon is that there’s only one refinery that serves the entire Pacific Northwest area
It services the residents of Oregon, Washington, and Northern California.
With so much demand and little supply, it makes gas prices skyrocket.
That’s especially true in situations that impede the ability to deliver gas to stations.
Oregon also has to import gas from other refineries in other states.
Depending on how far that gas is coming from, the cost of transporting it can become quite high.
Having to import gas, alone, makes it more expensive.
It requires those gas companies to spend money to get the gas.
To make up for the cost of importing it, they have to sell the gas at higher prices.
Without another refinery in the area, the price of gas will likely continue to remain high.
Since residents outside of major cities need gas to get from one place to the next, this becomes a major cost of living in Oregon.
Even those who live in cities that don’t bike or use public transportation need to pay for gas.
In cities, the price of gas may be higher, too, since there’s more demand for it.
8. Spending On Green Projects
One of the reasons Oregon is an expensive place to live is because the state government spends a lot on projects.
In particular, they spend a lot of money on projects to make certain aspects of the state more environmentally friendly.
Whenever the government funds a project, it needs to use taxpayer money.
In some instances, they may need to generate more funds for projects that they don’t have the budget for.
While this means that Oregon has an incredibly small carbon footprint compared to other states, it comes at a price.
Using greener technologies tends to be more expensive.
They’re more expensive to make since they usually require high-quality materials.
That can add to the cost of certain products and services which makes living in Oregon all the more expensive.
Oregon also has the companies in its state pay a certain amount of tax that goes towards green projects.
Since these corporations have to pay higher taxes, many of them increase the prices of their products and services.
That makes using their services or buying their products expensive.
Oregon, like much of California, is prone to wildfires.
The presence of wildfires makes Oregon expensive for a few reasons.
The primary one is insurance rates.
It becomes incredibly more expensive to insure a home when you have to pay a higher rate.
Oregon has high insurance rates because wildfires are a real danger to homes and businesses.
Since the risk is high, insurance companies need to make enough money to help cover repairs while also turning a profit.
Wildfires also destroy properties, farmlands, and businesses.
Those individuals then need to rebuild.
To recoup their losses, farmlands and businesses may charge high prices for a time.
Oregon is an expensive place to live because wildfires increase the price of insurance rates and many other things.
A final reason Oregon is expensive is that it’s a big tourist draw.
The beautiful mountains, forests, and ocean attract people from across the country.
The weather is also usually ideal without ever becoming too hot or cold.
The problem with that is that it draws lots of tourists.
Where tourists visit, you can expect prices to be high.
Whether it’s expensive restaurants, hotels, or activities, there’s more demand for those things.
With more demand and static supply, the price goes up.
Oregon is a beautiful state that has everything a nature lover could want.
Unfortunately, it’s also a very expensive place to live and visit.