Is West Linn a national leader in number of home businesses?

For more than a decade, economists have charted a pronounced trend toward more home-based businesses. Nationally, the number of people working from home increased by 2 million from 2005 to 2010, according to the U.S. Census.

In Oregon, the city of West Linn has long claimed a relatively high number of home-based businesses, with City Council members and others routinely referring to the city as having one of the highest rates per capita in the state.

Rep. Julie Parrish, R-West Linn, took things to a new level during the recent legislative special session, when she spoke on the floor to support a small-business tax cut. She said the proposed cuts would save enough for many businesses to hire an additional employee, then added, "West Linn has one of the highest per capita rates of home-based businesses in the United States."

That caught our attention. Does West Linn’s per capita rate of home-based businesses top almost anywhere in the country? PolitiFact Oregon decided to check.

We contacted Parrish by email and received a quick reply. She cited a May 2, 2013, article in the West Linn Tidings newspaper. The article, referring to U.S. Census data, stated that West Linn ranked second in Oregon in the rate of home-based businesses per capita at 8.9 percent. Only Lake Oswego, at 10.9 percent, ranked higher.

Parrish offered additional figures to bolster her case. As of April, she said, 2,769 businesses with West Linn addresses were registered with the Oregon Secretary of State’s office.

Further, West Linn has a population of about 25,600 and 9,779 households, according to the 2010 Census. Of those, 777 units are vacant. That leaves 2,769 businesses spread among about 9,000 households.

Suitably crunched, those numbers indicate that about 28 percent of households have a registered business, Parrish said, adding, "Of course, not all of those are going to be home-based."

From there, however, the slope got more slippery.

We took Parrish up on her suggestion to contact West Linn City Councilor Thomas Frank, who, she said, had cited 2010 Census Bureau data for statewide numbers of home-based businesses in one of his recent blog posts.

Frank said West Linn used to call itself Oregon’s leader when it came to the number of home-based businesses. He then cited the same figures used in the West Linn Tidings article.

Asked whether West Linn had, as Parrish stated, one of the highest per capita rates in the nation, Frank said, "I’ve not heard that one before."

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Next, at Frank’s suggestion, we turned to Chris Kerr, West Linn’s economic development director. He also could not pinpoint the origin of West Linn’s reputation for having a high concentration of home-based businesses.

"I have heard similar statements about the comparatively large number/percentage of home-based businesses in West Linn," Kerr wrote by email. "However, I am not familiar with any comparative data on this subject; certainly not related to the national averages or on a per capita basis."

In the end, neither he, Frank nor anyone else contacted by PolitiFact Oregon could cite numbers supporting the notion that West Linn is a leader in home-based enterprises, even though that’s been the conventional wisdom for years.

Kerr said the city probably does have a beefy number of home-based businesses because of its high percentage of residential to nonresidential land. The city last year listed 1,245 licensed businesses -- far fewer than the state listed for West Linn -- of which 423 were at residences.

The discrepancy underscores the difficulty of finding precise numbers. Kerr noted that some of those homes were listed for mailing-address purposes only. Other home businesses don’t bother to get licenses in hopes of avoiding regulation or licensing fees.

"I’ve been told that Southeast Portland has an unusually high number of home-based businesses, but there’s no way to prove it," said Eric Norberg, longtime president of the Association of Home Businesses in Portland. "Cities don’t tabulate that separately, and many home businesses have no desire to tell anyone but their customers what they are doing."

Still, we wondered whether cities can be ranked according to their per capita rates of home-based businesses.

Yes, said Jason Jurjevich, assistant director of Portland State University’s Population Research Center, but not by using full Census statistics. Instead, data along these lines come from the Economic Census, a survey of business owners conducted every five years.

The problem is it’s a relatively small survey and doesn’t produce information down to cities the size of West Linn, Jurjevich said. The single source of information that could be used that way -- Public Use Microdata Sample, or PUMS -- requires population sets of at least 100,000.

Of West Linn, he said: "It’s too small."

The Census’ annual American Community Survey also gathers data from businesses and homeowners. In a question asking how many people work from home, 8.5 percent of West Linn respondents answered yes (not the 8.9 percent listed in the Tidings article). But there’s no way to determine how many are simply employees who work from home.

To Parrish’s credit, she promised to continue looking for "the specific numbers," adding, "I’m willing to acknowledge that I don’t have them in hand." She stood by saying West Linn has "one of the highest" per capita ratings in Oregon, despite the fact that no one could point to specific data to back that up.

But back to her original claim to House colleagues that West Linn has "one of the highest per capita rates of home-based businesses in the United States." It’s conceivably possible that’s true, but Parrish could offer no substantiation. And we found that no such statistics exist on a city the size of West Linn. In such cases, PolitiFact rates the claim False.