So what do you do? Oh yeah, I wait tables too/ No, I haven’t heard your band, ’cos you guys are pretty new/ But if you dig on vegan food, well come over to my work/I’ll have them cook you something that you’ll really love/’Cos I like you/ Yeah I like you/And I’m feeling so bohemian like you...

The Dandy Warhols’ 2001 hit Bohemian Like You — helped to the top of the charts by that infuriating Vodafone ad — is essentially an ironic love song to their home town of Portland, Oregon. Set against the stark beauty of the dormant volcano Mount Hood, straddling the Willamette River, and dotted with fir trees and rose gardens, the town’s main claim to fame to date has been that Simpsons characters are named after Portland streets. In the past six months, however, this concrete grove of bohemian dreaming has proved itself a 21st-century blend of Manchester, Detroit and Berlin, producing a new wave of cutting-edge indie bands that have so excited the mighty Johnny Marr, he went and joined one of them: the jagged indie rockers Modest Mouse.

“It had got to the point where if I heard another band describe themselves as sounding like a cross between the Smiths and the Cure, I was going to shoot them and then myself,” Marr explains. “Modest Mouse caught me at a time when I had an agenda to do a completely different sound: something electric and skyscraper-huge. Nobody else sounds like that at the moment.” At the end of March, this union proved fruitful. The album, We Were Dead Before the Ships Even Sank, entered the US charts at number one. And yet, as he strides Portland’s streets looking for somewhere to live, Marr is increasingly aware of just how many citizens want to steal that slot. Fellow Portlanders the Gossip — a punk/soul three-piece led by the cover star du jour Beth Ditto — and tortured indie popsters the Shins currently have the British press watching their every move. Meanwhile, the mad musical experimentalist husband-and-wife duo Viva Voce release Viva Voce Loves You in June; alt-punk guitar threesome the Thermals kick off some UK dates in May; intellectual rockers the Decemberists play New York’s Central Park this summer; left-field funk-folk ensemble Blitzen Trapper release their third album, Wild Mountain Nation, in June; and jangly pop outfit the Shaky Hands recently signed to Holocene Music.

These bands are just a tiny fraction of the Portland music scene. Last week, for instance, the local entertainment mag Willamette Week listed more than 100 bands playing in a total of 60 venues on an average Thursday night. This in a town with a population the size of Edinburgh.

Why should this city generate so much music when few people outside the USA have heard of it? The Gossip, originally from Arkansas, moved there five years ago: “Partly, we went there because it’s so cheap — you can live in Portland for, like, $350 [£180] rent a month,” explains the guitarist, Brace Paine. “But once you’re there, there are so many people your age — it’s a really young town — doing so many creative things and all going out and watching each other play, that it became hard to imagine living anywhere else.”

“The forest is right there, the ocean has a wild and vicious beauty, the rivers are swift and dangerous, so that’s all pretty inspiring,” says Viva Voce’s Kevin Robinson. “But it’s also that people here have a low tolerance for posturing. You can’t sit around all day talking about starting a band and how great it’s going to be. You just have to get up and do it. You can’t have half-assed ideas. People expect to be wowed by you.”

Portland has always supplied America’s indie market. Courtney Love, for instance, hails from its low-rise streets. She left for the coast, however, while this generation of Portland musicians has a strong loyalty to the city. Indeed, these days the flow is in the other direction — Pixies founder Frank Black and Pavement’s Stephen Malkmus have both settled there in recent years. And the members of this close-knit muso community are always helping each other out. Viva Voce’s Anita Robinson sings on the Shins’ third album, Wincing the Night Away, for instance; and when the Decemberists’ equipment trailer was stolen in 2005, the Thermals, the Shins and the Dandy Warhols all donated new kit. Indeed, although sometimes accused in other parts of America of selling out, the Dandy Warhols used the money from the Vodafone ad to build music and film studios for local bands and artists.

This desire to avoid LA and New York is fuelled by Portland’s horror at the destruction of Seattle’s vibrant music scene when grunge became big in the 1990s. “A lot of bands just took the money and ran to LA,” says Paine. “Then the music crashed and boy-bands took over. Now you’ve got a lot of bitter guys who still can’t believe they missed out on the 1990s payday and are completely burnt out.”

“All the bands know there’s a potential threat to this artistic utopia,” adds Robinson. “Nobody’s going to get above themselves. We’re too smart for that.”

Although you’ll hear plenty of Portland bands on indie movie soundtracks such as Garden State and Elizabethtown, the scene has an uneasy relationship with the traditions of pop exploitation. The Thermals refused to licence their song It’s Trivia for a Hummer commercial — “How could we go on after soundtracking Hummer? It’s just so evil,” explains the singer, Hutch Harris — and the Gossip pulled out of their support slot on the Scissor Sisters tour because Ditto didn’t like performing for an audience that “didn’t know their Ramones”. The desire for independence is partly fuelled by Portland’s politics, which offer a vision of an America that turned left instead of right in the 1980s. There’s a cheap, clean and efficient public-transport system, and strict urban planning controls to prevent skyscrapers; abortion is legal, as is assisted suicide for the terminally ill, and the city is leading the campaign for Oregon to legalise gay marriage. There’s a thriving local arts scene supported by a healthy counterculture media, including two radical weeklies, three arts mags and Exotic — which covers the, um, adult nightlife.

While the global retail chains do exist, Portlanders have a deep-seated love for local businesses. Mom-and-pop grocery stores, bookshops, coffee shops and diners vastly outnumber the branded behemoths, even though Nike’s worldwide headquarters is on the edge of town. Most Portlanders, however, are proudest of one thing: the city has more breweries than anywhere else in the world: 33 at the last count. That makes for a bewildering variety of local brews — which just may have something to do with the town’s musical reputation. Put a bunch of twentysomethings in a beautiful city with low rents and strong, cheap beer: if that’s not a recipe for bohemia, I don’t know what is.

Viva Voce Loves You is released on June 18 on Full Time Hobby; We Were Dead Before the Ship Even Sank by Modest Mouse is out now on Epic

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