On November 2, 2004, Potter defeated City Commissioner Jim Francesconi in the non-partisan Portland mayoral race. Potter was inaugurated on January 3, 2005, succeeding Mayor Vera Katz (who had served for three terms, but did not run for a fourth.) Francesconi, who raised a city-record $1 million and outspent Potter 6 to 1, was an early favorite for Mayor; Potter, who limited campaign contributions to $25 in the primary and to $100 in the general election, defeated Francesconi in both elections.
Portland is unlike most large United States cities, in that the Portland City Council performs many duties that are more typically in a mayor's purview. Potter advocated for a change to that system, advocating for a "strong mayor" initiative in the May 2007 election. The measure was defeated by a 3-1 margin.
Potter was chief of the Portland Police Bureau during early 1990s, serving less than three years before retiring at age 52 from the police force. In 2003 he decided to run for mayor of Portland, based partly on a desire to help reform the Portland police department. He built a platform on the issue of community policing, a police strategy that involves active engagement with neighborhoods with such tactics as getting police officers out of their patrol cars.
On September 10, 2007, Potter announced that he would not run for re-election as mayor of Portland in 2008. In May 2008, Sam Adams was elected as the next mayor. Potter's term will end and Adams will take over in January 2009.
Potter lives in the Woodstock neighborhood of southeast Portland with his third wife Karin Hansen. His hobbies include archaeology, hiking, camping, and bicycling.
In addition to continuing advocacy of community policing, Potter expressed interest in other reforms of the Portland police department. He marched against the Iraq War on the first anniversary of American involvement in March 2004 and was dismayed at the black uniforms and the militarized appearance of the Portland police he saw. He made it part of his campaign to rid the police of such a militarized appearance if elected.
In January 2005, Potter caused a controversy by taking part in the monthly Critical Mass ride, an act that participants consider a celebration of cycling in which bicyclists take over the streets to demonstrate alternatives to the use of the automobile in urban areas. Critics accused him of endorsing the group's actions, which include violating traffic laws and intentionally blocking other street traffic. This act was celebrated by the bike community and seen as an effort to mend torn ties between the city and bicycle activists.
Potter backed Commissioner Erik Sten in an effort to purchase Portland General Electric from Enron. He also said he is willing to consider using the city's power of condemnation to acquire the utility's assets. The bid attained the backing of Oregon Governor Ted Kulongoski, but was vehemently opposed by Enron and some members of Congress. He also supported of Sten's Voter-Owned Elections initiative, which funneled city money to candidates for city offices in the 2006 Primary elections and was vehemently opposed by the Portland Business Alliance.
On April 22, 2005, Potter withdrew the Portland Police Bureau from the FBI Joint Terrorism Task Force. This action came after a dispute of two years over supervision, security clearances for Potter and then-Chief of Police Derrick Foxworth.
In May 2006, Potter accused the FBI of attempting to recruit an informant within the Portland city offices, going so far as to have his City Hall offices searched for listening devices. The FBI denied the accusations, which served to underscore the tensions between that agency and Potter's office.
Potter is widely credited for emphasizing diversity, and making city hall more accessible to underrepresented communities, such as people of color, immigrants and refugees, and youth. In October 2006 Potter introduced a resolution affirming the City’s commitment to the inclusion of immigrants and refugees in civic life, and convened the city’s first-ever Immigrant and Refugee Task Force to recommend strategies to address barriers to engagement. Together with wife Karin Hansen and with the help of several hundred young Portlanders, Potter led Portland to become the first major U.S. city to produce a children’s bill of rights.
Also during 2006, Potter initiated the development of a new Office of Human Relations, dedicated to combating social issues such as race and sexual identity discrimination, hate crimes and human rights abuses through the establishment of a Human Rights Commission and police Racial Profiling Committee. The new Office officially commenced in January 2008.
Early in 2007, Potter proposed four changes to Portland's city charter requiring a vote by the electorate. The changes included language providing for: A regular review of the charter every ten years; Increased control of the Portland Development Commission by the City Council; Exclusion of certain city government job classes from civil service protections; and the most dramatic of the proposed changes, the establishment of a new form of government that provided greatly increased authority for the Mayor relative to the existing system. Of the proposed changes to the charter, the form of government switch was the most debated and was characterized by opponents as a power grab. In May 2007, Portland voters passed three of the proposed changes, but rejected the change to the city's form of government by a decisive 3-1 margin.
After months of speculation, Potter announced on September 10, 2007 that he would not run for re-election as mayor of Portland in 2008. He cited a desire to spend more time with his family. He will be succeeded by Portland City Commissioner Sam Adams, who was elected in May 2008.
In the midst of a highly publicized hearing in October 2007, Potter walked out of the council chambers, declaring that he was not a "voting member of the council, anymore." He added that he was "not relevant" before exiting. The hearing concerned a proposed renaming of Interstate Ave. to Cesar Chavez Blvd.