We've Built Cities We Can't Afford
strongtowns.org
strongtowns.org
If cost of maintaining roads and utilities in typical American suburban pattern is so high that cities can’t afford it, where are all the cities that went bankrupt because of it? Strongtowns argues that early on, it’s covered by the developers, but after its useful life, it must be replaced by municipality. Ignoring the whole issue of the original residents actually covering the cost instead of the developer (clearly, the developer didn’t just donate the roads and sewers, it’s all priced in), how long do we actually have to wait for chicken to come home to roost? I live in a suburban development in Seattle, packed row to row with the single family houses with yards and garages that Strongtowns says is a bane to long term finances. The median age of the house is probably something like 50 years, with a good amount over 100 years old — it’s a relatively old neighborhood. When will the road costs will finally kill our budget?
If you look at the city budgets, there is no mystery: road maintenance is simply a very small part of municipality budget. It simply doesn’t cost as much as Strongtowns keeps implying. The infrastructure maintenance budget is dwarfed by everything else.
Just look at the numbers: http://www.seattle.gov/city-budget/2020-proposed-budget#/sdo... Road maintenance is what, $150M-200M counting generously and adding some overhead? Even if you apportion all of that to suburbia, compared to total budget of over $6B, it’s not going to make a serious dent.
That the road costs are low in suburbia can even be seen with a simple back of the napkin calculation: assuming cost to repave a mile of suburban road to be $1M, house frontage of 100 feet, and useful life of road at 30 years, you’re looking at $20 000 per house over 30 years, or less than $700 per house per year. Sure, that’s not nothing, but how much do you already pay in property taxes?
In short, while I think many suggestions of Strongtowns are good in their own right, and would indeed improve many places in America, the infrastructure costs story simply doesn’t add up.
If you go look at older suburbs, especially the less wealthy ones, you see a lot of supporting evidence for the Strong Towns argument. Try traveling around metro Chicago, for example. Or go to a place like Memphis, TN and take a hard look at their maintenance costs versus income. Unfortunately, Seattle's economy isn't the norm.
Anywhere I look, municipalities don't spend too much on road maintenance. If the argument is that it's below what's actually necessary to spend to maintain it, and in near future it will come and bite us, clearly some places must already be ahead of the curve and already have significant pains due to falling behind with maintenance and having no budget to pay for it. Where are those places?
> If you go look at older suburbs, especially the less wealthy ones, you see a lot of supporting evidence for the Strong Towns argument. Try traveling around metro Chicago, for example. Or go to a place like Memphis, TN and take a hard look at their maintenance costs versus income.
Can you name one of those places around Chicago so that we can look at its budget? Memphis budgets around 10% of its revenues for infrastructure. Is it significant? Yes. Will it bankrupt the city? No.
The problem isn't related to infrastructure alone. US debt is already above $24 trillion [1]. The Federal Reserve just put $6 trillion on its balance sheet [2] that is unlikely to ever be unwound. We've already spent far into the future. It's important to allocate capital intelligently in the near term to ensure disaster is averted when defaults occur en masse decades from now. I'd rather fix all of our existing infrastructure that gets a D+ rating [3] and then default on that debt in the future; we still get to keep what has already been built. The debt is "funny money".
A better title, with more weight towards the financial situation, would've been "We've Built A Civilization We Can't Afford." We have to stop kicking the can, but you need leaders with the fortitude to tackle these painful issues, and an electorate that will support them. Is that likely? I wouldn't bet my own money on that.
[1] https://www.thebalance.com/national-debt-by-year-compared-to...
But not because Seattle hasn't paid its dues, but due to an engineering fault / design problem. The bridge was expected to last another 40 years and was being regularly inspected (which is how the issue was found). The bridge was built in '84 and inspected multiple times a year.
Strong towns gives a single answer to all problems with a smarty pants tone. They have a point worth hearing, but it gets old the 59th time you read it.
Potholes, cracked asphalt, insufficient storm drainage, and so eventually a lot of damage to property (floods, cars, etc.).
Strongtowns isn't worried (as much) about large metro areas. His "shtick" is that the rest of the country, where populations are shrinking or stagnating, can't continue to run ponzi-like growth plans anymore that presume the population will continue to increase. They're not going to.
Go find yourself a town of 10,000 people that has a massively over-budge roads and water department. You won't have to look far- just leave the big cities, driving in any direction for an hour or two. Those same towns have low incomes, generally, meaning your "only $700/year" is enough to bankrupt people.
In short: I think you're living in a bubble and haven't ventured outside of it very far in a while.
Austin has had massive growth but what happens when sales tax, hotel taxes, fuel taxes, local income taxes (not in Austin but other places), etc all take a massive hit all at once?
With canceling SXSW this year, they're projecting there was an immediate $30-50M tax revenue hit and hotel occupancy is still ~4% when it's normally 70%. Sure, there's less wear and tear on infrastructure but they don't cancel out.
Fundamentally, it looks like most cities are living "paycheck to paycheck" like a good part of US..
Governments in general (and the departments/agencies thereof) tend to live "paycheck to paycheck" specifically because they're typically discouraged from saving a whole lot of money; there's almost always a "spend it or lose it" mentality (whether informal or actually codified in budget policies) that instead encourages spending every last penny of funding received lest whoever's in charge of the budget decide "well they're running leaner than expected so let's slash the budget to what they're actually spending and turn that into a tax break".
These people wake up in the morning and drive into the big city for work, which needs huge roads running through otherwise small residential areas. Now those roads are too dangerous to cross, so pedestrian traffic plummets. When the people come home, they get their family together and drive back to the big city to go to a concert, visit a museum, or get dinner. We've talked to so many people who live biking distance to their town's central business district but have never been there. They only live in Ada or Lowell, but they spend all their time and money in Grand Rapids. And Fulton Street isn't a road you'd want to walk across, because of all that traffic.
The way it works: a town was thriving with an engaged population spending time and money in the central business district. One person moves away, and someone else moves into their house. This new person is fleeing the big city, but is still economically tied to the big city (not the small town). Now imagine 20 or 30 houses go for sale in this town every year. After a few years, that's a major hit to the small town's economic prospects. Businesses start to close, which accelerates the problem. And many of the newcomers want to live in subdivisions rather than city limits, so houses in city limits are sitting just as vacant as the businesses, and the town has less tax revenue to fix any of the problems. So it gets worse year over year until the town dries up. The only thing left is the major road, the McDonalds, and the gas station. But the people living in those subdivisons just outside of city limits still need to get to the freeway, so the town has to maintain massive roads used mostly by people who aren't paying them any taxes.
This is the story of hundreds of towns in every Midwestern state, tens of thousands of towns across the country. We're building a network of four lane roads through the ruins of small towns and leaving the city council to pay for infrastructure no one is using anymore, with tax income they don't have anymore, for citizens who don't spend any time or money in those towns.
It is growing because people want to live there. They don't want to live in the communities idealized by the "strong town" people. They want to live in suburbs around a downtown core, which is what Seattle is.
Maybe, but the city mentioned in the article spends 10% of it's budget on infrastructure. That might be more than it should but it's not bankrupting them anytime soon.
That's why infrastructure was much better in the past: most of the population was economically active and local governments didn't have any permanent financial burden like they have now. At the time most of the budgets could be allocated to direct city spending instead of starting with half of your budget already gone before you even have it.
Of course you could argue that it still means that we built cities that we couldn't afford since employee benefits are part of the normal expenses. But imo, it means more that , at the time, a few took advantage of local politicians unwillingness to go against more and more generous and unaffordable pension schemes that ended up crippling future generations with perpetual debt and underfunded services when they themselves never had such a burden to carry. If it wasnt for that borderline intergenerational theft , the infrastructure of our cities is not only something we could easily afford to maintain but could even be tremendously expanded.
Edit: I'm not arguing that pensions should not exist or that unions are bad. It's just that in the public sector specifically, ridiculous and unfair payouts were negotiated where the public sometimes ends up paying for far more than what the employees contributed themselves.
>That's why infrastructure was much better in the past: most of the population was economically active and local governments didn't have any permanent financial burden like they have now.
They didn't have the financial burden because their ancestors didn't punt labor costs decades into the future. And given the opportunity to punt labor costs decades into the future and provide lower taxes now, how is a politician who is prudent and wishes to account for today's costs today going to win an election?
The only solution is to ban defined benefit pensions (and all deferred compensation schemes) so there no longer exists one less avenue for future taxpayers to get taken for a ride.
Then you'll have to raise wages for government jobs dramatically. The decent pension is one of the perks that attracts people to those careers.
I think the main problem is that governments never want to pay into the pension pot during boomtimes, and then they cry poverty when the economy is in a downturn. In principle, an "immortal" entity like a state pension fund should be much better positioned to manage risk over time than a single individual with only one lifetime and one 401(k).
I don’t see the problem with paying market wages to people to avoid screwing future taxpayers.
And there is no such thing as an immortal entity. My kids and I will be paying for benefits enjoyed by my parents and grandparents. (I know there are things my ancestors have done that I have and will benefit from, but I’m strictly speaking in context of payment/benefits for defined benefit pensions).
Aside from that, a big issue is that cities aren't designed for maintenance. Why are we still building towns with the pipes under roads? Keep them under the sidewalks with loops in the cement blocks so they can be easily lifted up and moved for repairs. It'd be faster and cheaper b/c no more repavements, you don't need super heavy equipment (simple forklift with chains can move them), and it'd cut down on job completion time, not to mention it's much easier to plan. For anything that crosses a street, do it at intersections and you can just make intersections a composition of concrete slabs that again can be moved.
Another issue is not utilizing technology. It'd be incredibly simple to create a web portal where citizens can report maintenance issues like potholes, broken street lights or traffic lights, tree limbs that need cutting to keep away from power lines, a sewer drain that's clogged, a fire hydrant that's leaking, etc. The list goes on and on. All these things being reported would make it much easier for the city to plan the maintenance so you could bang out a bunch of things at once early on rather than waiting for it to build up so much that it becomes obvious without the reporting and by that time it's usually late and has lead to other issues.
This isn't a bad idea for maybe a single utility but I dont think you are considering how many utilities are under the ground: water, sewer, street runoff, natural gas, electricity, telecommunications. Each of these may have multiple lines for each of service, distribution, and transmission. One of the reasons streets get torn up a lot is that there is a low of equipment underground!
That someone would look at a city budget, which is a primarily political document, and believe that document reflects actual costs to sufficiently maintain anything, is simply naive.
It's the same all over the Rust Belt.
So what really happened? We built new subdivisions for the exact same set of people and the old parts of town just fell apart entirely. The maintenance was completely ignored.
Nobody left St. Louis. They just took developer and federal money and built new housing in St. Louis County (the original suburbs). And then when those old suburbs started to decay, they did it again by moving out to St. Charles (the new exurbs).
The latest wave of this is the "return to the city" movement in which the same set of people continue the cycle by abandoning the housing that was built to replace the housing they're returning to.
I'm using St. Louis as an example here, because it's the city I know the most about, but it's the same everywhere.
https://www.strongtowns.org/journal/2020/4/16/when-apartment...
That said, I agree that total collapse of municipal finances is unlikely outside of particularly poor exurban areas.
"Packed row to row" and "50 years, with a good amount over 100 years old" isn't nearly descriptive enough to say whether it is financially sustainable. How packed? How dependent on long highway commutes? And importantly, how prosperous are the residents (the suburban Seattle area is pretty prosperous)? All of that matters a lot for how soon the financial pictures turns unsustainable.
> the infrastructure costs story simply doesn’t add up.
Roads aren't the only bit of infrastructure. Water lines, electricity distribution, land maintenance, and more. The unit costs of all these thing scale up rapidly with decreased density. The leading edge of the failures will be in places where the property tax base has already collapsed and the government is forced to make infrastructure maintenance trade-offs with bad consequences (i.e. Flint, MI), but the fragility is there in lots of cities, just perhaps not yours at this time.
If you take your assumptions on face (and I think some might be off, but I'm not expert), we're saying that homeowners should think of the cost of repaving roads as on par with replacing a roof. I don't think most people think this way.
For example I live in a 50 year old 1.5k square foot house in a suburb and pay around 12k/year in property taxes. Which was far above the calculations one of the blog posts said that the town would have to collect.
There's often a reduction of services. Some US towns / counties can no longer afford pavement so they're letting roads become gravel:
* https://www.wired.com/2016/07/cash-strapped-towns-un-paving-...
* https://www.poynter.org/reporting-editing/2009/counties-weig...
I'm not sure you'll find a lot of maintenance on their budget- the problem is precisely that nothing is being maintained.
Let's take a look at the budget[3]. Grandview intends to spend $37M, only $1M of which is budgeted for street maintenance, which is more than average in previous years. Are the streets deteriorated and decayed due to lack of maintenance? I spent 5 minutes on Google Streetview, and while the residential streets are far from pristine, I couldn't find a single pothole. I did, however, find road work, repaving a street[4]. This[5] is a representative example.
Is Grandview a bad example? Is it somehow better than average? Is there some magic that makes Grandview work quite fine? No, I don't think so: for all I know, Grandview looks exactly like hundreds of others suburban towns in America that I've seen. This is what bugs me about Strongtowns: for all of its doom prophesying, I haven't yet seen a single town struggling to maintain suburban infrastructure. Failing to meet pension obligations, sure. Overblown salaries for city employees, yep. Large police department with lots of new toys in a town with almost no crime? Sadly, too common. But residential street maintenance killing a budget? Hardly.
[1] - https://www.strongtowns.org/journal/2018/3/1/whats-a-stroad-... [2] - https://www.strongtowns.org/the-growth-ponzi-scheme [3] - https://www.grandview.org/home/showdocument?id=9346 [4] - https://goo.gl/maps/6DFjmEVoueoQwD7H9 [5] - https://goo.gl/maps/HWkWMT3GGK8WnNpX8
They manage to maintain a mile or more of roads to most isolated houses.
Obviously dense cities (in their current form) aren't completely self-sustaining either, given that they need food. But this is universally-understood, while for some reason many people seem to be unaware how much of a closed-loop rural communities _aren't_ when they talk about the sustainability of sparse living patterns at modern standards of living.
The economics at the state level, play out just like how they do at the national level. The high population, economically vibrant parts generate tax revenue, which is redistributed to the sparsely populated, economically depressed areas, of which are not self sustaining, no matter how much the net receivers think they are.
On top of that, the idea that rural areas' standard of living without urban subsidization would amount to losing "some luxuries" is so out of touch with reality that I don't even know where to start (though the sibling comments do a good job).
This narrative always seemed remarkably short-sighted because cities have enough economic bargaining power that they can just import the goods they need. Farm towns would quickly fall apart the moment they had to pay for all of their infrastructure (meaning power, internet, gas, transportation) because all of that is heavily subsidized.
Without the highways most of these areas wouldn't be able to buy or sell goods to the outside world.
(Aren't trains cheaper? Maybe we should be building more track and fewer lanes)
when in reality current transportation infra funding from federal government is about military defense.
its the same reason electricity lines, highways, and train rails don't occupy the same space. there is no reason they couldn't and would reduce costs overall. but it also means a single strike can disable all 3 systems.
in today's world I think its a pointless effort and we should resolve those issues to reduce the overall costs. but here we are.
They sometimes do, though. Namely: if you're going through the mountains, there are only so many mountain passes, and therefore only so many places where these things can get through the mountains. I-80 in the Sierra Nevada mountains is a perfect example of this; between Colfax and the 80/20 interchange (if not all the way to Truckee) they're very much occupying the same space because there's nowhere else to go (thankfully that power line's pretty minor compared to the one following 49 to the north, but the one following 49 also happens to be colocated with rail).
The more viable solution - and indeed, if you look at a map of our energy infrastructure¹, the one that we use - is to make the connections as redundant as possible. This has plenty of peacetime benefits, too (for example, if I-80 and the adjacent railway both shut down because of a blizzard or avalanche, trains and trucks can route around it, albeit with delays).
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This is generally true - typically, paved rural roads in the US are county roads. Nicely maintained gravel roads are typically county roads as well.
Long term, the cheapest roads are in older towns that still have brick streets. Some are a 100 years old and have nearly zero maintenance. They are slick and noisy.
On a side note, we have hundreds of miles of gravel roads to bike. We even have an internationally attended event called the Dirty Kanza.
1) city or county highways and also serve a commercial purpose
2) are bad quality and have been left to decay
3) have been crushed and turned to gravel roads
You'd need an example of a suburb or exurb to prove your point.
Of course, the same thing is true in the actual suburbs. Consider Lynnwood, a town of 35 000. It’s annual revenues are around $300M, and road maintenance is around $6-8M. It spends around 7 times as much on its police force as it does on roads. When does it go bankrupt?
Lynnwood has 35K people in 8 square miles, 5 Kpeople/sqmi.
KC has 500K people 310 square miles, 1.4 Kpeople/sqmi.
As far as I know that's pretty common--in fact, I expected the educational spend to be higher, which it probably is in some places. (Per student spend for the regional high school is about half the spending in Cambridge for example.)
It has a population of 38,511. The budget works out to aprox $2558 per person.
Per capita income is just shy of 20k
The wall around it are 800 years old.
Mall strip in the US depress me very much.
Within 20 minutes of walking, I can get to two separate Targets, Whole Foods and even a Home Depot.
This really is the most ridiculous thing about America. The Loop and River North are really nice! And yet most of the country has decided that this should be simply forbidden from occurring anywhere else.
What kind of weird question is this? "Downtowns" are _more_ accessible for people, not less. That's why they are more expensive by the foot.
Are you under the belief that there are no markets or services in cities? This seems like a perspective you can get from only living in the suburban non-sense that America has constructed.
It's always a big question in my city, "can you live here without a car?" and most of it has historically hinged on grocery shopping.
What city?
It was a question. You asked the question, and it can only be asked as a non-rhetorical question if it is predicated on ignorance and some a priori perspective.
>I live in the city
Are you talking about an "actual" city, or an urban sprawl?
However having driven through the Kansas City metro I was impressed, and not necessarily in a good way, by the massive amount of paved roads. It was nice in a way; there was very little traffic. However it seemed to have the most roads of a city of its size that I have every seen. I have never been to Houston or Dallas however.
There are two issues here: bankruptcy, which is a crappy legal and financial situation to be in, and which you may or may not avoid, and city decline, which can happen even if you avoid bankruptcy. Leaving swaths of the city to rot is the latter, and does not strike me as necessarily better (and certainly not for the residents of those swaths).
Moreover, the infrastructure problems compound any issues with pensions, since if people leave, it will be harder to have the tax base to fulfill previous obligations. Saying that the last expenditure left standing in a financial Armageddon was the one that “did them in” sounds like an oversimplification.
The average American just doesn't believe this is a possibility in a way which meaningfully affects them because they've never seen it or they believe ive some exceptionllalism nonsense.
"Cities that we think of as marvels from the past that we could not match were built by people much poorer than us."
There are few or no options for cheap, walkable, high-density city living in the US, and not because people don’t want it, because of what the TLS people call “ossification”: it’s illegal to build it in most places, even if it’s cleaner, easier, cheaper, and more desired by citizenry, simply due to (bad) tradition.
(That and that fact that the upper classes really don’t seem to like living within walking distance of poor people.)
I wonder if it’s possible to build new actual cities in the US. I know that due to things like restrictive covenants, much of the housing in the western half of the country makes it legally impossible to ever increase the density of existing cities. Subdivisions in master planned areas can’t individually decide to allow duplexes or mid-rises or corner stores, as they are sub-sub-subdivisions that are governed by decades-old associations. To build another New York or Hong Kong (in addition to needing 50-100 years) you’d probably need to start fresh; it couldn’t be grafted into an existing sprawl town.
More importantly, you want your children to go to a school in the district with the most affluent parents that you can afford to live near. That's why 20 somethings don't mind living near poorer people in NYC or SF, but unless they can afford to pay for very, very expensive private schools, they will move out to the most expensive suburb they can afford (i.e. the best school district they can afford) when they have kids.
Would eliminating all public schools and making a voucher-based system (with oversight/standardization for redeeming organizations) work to solve this?
How do we overall reduce the number of everyday routine life person-meters travelled in large percentages of society?
It totally unfair that where you live literally down to what side of the street can mean the difference between a good or terribly funded school you must attend.
Anything else is papering over the root cause, which is the opportunity gap between different socioeconomic classes. Even if people deserve to be in lower socioeconomic classes due to their laziness, it hurts society as a whole in the long run if equal opportunity is a goal for children.
I'd like to see an actual example of such a city for better context. What city do people think we can't build today better and faster? Who are the people that are poorer? Like the US is richer, but detroit got wrecked over time.
Rome? Athens?
Merv was considered the most beautiful city in the world for centuries.
https://en.wikipedia.org/wiki/Merv
We have sent men to walk on the Moon but we suck at beautiful architecture.
Now there are modern glass buildings that can look really sleek also, but honestly they are a bit repetitive and featureless and don't really match those older ornate styles.
"target productive development patterns"
"incentivize productive development"
It's hard to read Strong Towns articles because they write almost entirely in euphemism. What they're really advocating is smaller homes, more density, and less driving. They would really sound much less Orwellian if they stopped using so many weasel words.
...then what happens? Do roads just get a lot more potholes but we deal just fine in the end? Or would it get so bad that people wind up just leaving somehow?
It's almost impossible for me to imagine that road etc. maintenance is that expensive that it could mean shutting down entire neighborhoods because there's no other choice. ("Everybody who owns a house, goodbye it's worthless now.")
Is there more likely to be a supply-and-demand thing where a town is forced to massively increase property taxes, people who can't afford it are forced to leave for a cheaper locale, and people with more money come in? (Attracted by the now lower price of the houses which compensates for the higher property taxes.) In other words, existing homeowners will get the shaft, because the deferred maintenance will essentially be paid for in the end by their loss in home equity?
It doesn't happen in a single decision or even a single year. It's a slow spiral: people move out, crumbling streets go on the "cons" list of house hunters, the city has a smaller income base, so non-urgent roadwork is less urgent. Repeat.
I'm not saying people will flee neighborhoods with bad streets. But they will move out for the usual reasons: family, new jobs, marriage. The problem is new people are less likely to move in.
People still live there, but it becomes a trap for the people who can't afford to get out. Strongtowns argues this fate was inevitable given certain initial conditions- subsidized infrastructure, underfunded maintenance liability, etc.
When business people talk about remote job in the team, it's usually outsourcing to India. Why not to let your employees present at the office, say, 1 time a week, to deal with the customer or attend weekly meeting for those who miss socialization.
You want to live in a sprawled out suburb where there's a low ratio of taxpayer/mile of infrastructure? You're free to do so, but expect to pay a higher share of the infrastructure costs to do so.
Also, the budget set aside for infrastructure projects should do a much better job of allocating future tax revenue towards maintaining it over time. Right now, the cost analysis of these projects is way too focused on what it'll cost to build it, and then maintaining it is left up to future planners to figure out.
Every project must have a guaranteed tax revenue percentage exclusively set aside towards maintaining it going forward.
Thats really going to be a tough sell over the next few years. I got to say I live in exactly the kind of suburbs they hate with a house big enough for everyone to spread out and enough square footage to store a months worth of food. And when I do get out its alone in my car to curbside pickup or a drive through. I couldn't be more pleased.
Likewise, it's fine if you want to live out on a farm well away from other people -- but the town shouldn't pay a million dollars to run a paved road and water supply out to your house, when a dirt road and a well is good enough.
The problem is that we all want something for nothing. We all want to live in low-density suburbs like you love, but since charging enough in taxes to pay for them would not be very politically popular, instead we've run up massive infrastructure liabilities, depending on unsustainable exponential growth for funding to fix the old infrastructure.
Would you still love the suburbs as much if your property taxes were 2x or 4x what they are now? If you would still want to live in a suburb, great, no problem. But many people would probably rather choose to move to a denser area and pay a more reasonable tax rate.
Of course, the costs won't be paid by you. Pushing mass all that extra distance consumes exponentially more energy. Fortunately, the effects of climate change won't be so bad until I'm in old age (I think).
It seems to me if you really want to design a city, I mean really care you’d be better off becoming a real estate investor or developer and then building things how you think they should be built.
The Strong Cities folks and the like don’t seem to have good answers for how you actually implement their ideas without wealth destruction and dislocation of communities that have built up in ways that don’t meet the standards of urban planning high ideals.
The Haussmannisation of Paris 2.0 is not going to happen in a US city full of middle class land owners.
Maybe we’d take these people seriously if they had a reasonable PLAN for implementing their grand ideals
I'm a strong town proponent and advocate (though I live in Portugal where many of these problems never surfaced on the same scale). I'm also a real estate investor.
The crux of it is that the priority for urban planning enthusiasts must be education, not mass rebuilding. A large, large majority of people would still rather take out buy a horrible McMansion in a soulless development than buy a smaller, well-built home closer to their neighbours. Showing off wealth and ticking off features is valued over long-term enjoyment of your home and betterment of the community.
Is it such a surprise that it's hard to get a large number of folks to do what's best in the long term instead of what they want right now?
I want to start a kind of real estate development company to buy distressed land (as opposed to raw wilderness) and develop "living neighborhoods"[1] (like Village Homes[2] in Davis, CA) combining Pattern Language and Permaculture (applied ecology), and sell sell them. "Rinse and repeat".
I don't know of anybody else doing something like this, and yeah, it puzzles me too.
[1] https://www.livingneighborhoods.org/ht-0/bln-exp.htm Christopher Alexander's site.
I'll attempt to briefly summarize:
The post WW2 development pattern across North America (and many other places around the world) is characterized by car-oriented development, where large collector roads fan out to support tree-like trunk-and-branches local streets full of houses, with commercial box stores and strip malls often located where the major collectors cross.
This infrastructure pattern (road, sewer, power) is much more expensive than most people realize, and (to most people's surprise), the local taxes (property, sales, and sometimes income) collected by all the properties that depend on that infrastructure are rarely sufficient to pay for it.
This means that as municipalities expand in this way they are increasing their cost of maintenance faster than they are increasing their revenue, and thus becoming poorer.
The reason this continues is that the majority of the initial capital cost (which, again, is substantially more than most people realize) is heavily subsidized by federal and state "growth" programs. Thus, in the range of the first 5-10 years, local places often get a short-term influx of cash as new development pays local taxes spurred by infrastructure the city didn't have to pay for. But it's a bad deal, because the city is on the hook to maintain that infrastructure forever, and again, the long-term tax base is rarely adequate to pay for it.
This leads to a vicious cycle - which probably sounds familiar - where city officials are desperately chasing more "growth programs" from the state and federal level because they need the income to cover budget shortfalls -- but they aren't stepping back to recognize that the budget shortfalls were actually caused by this same pattern played out over the last 50 years.
It's a fascinating, slow-moving train wreck, one of those things that is all around us, and once you see it, you can't un-see.
Strong Towns exists to spread awareness of this situation. The organization's theory of change is that if the general public were well-educated on this phenomenon, then it would change, as people in each local area would stop making the problem worse then start iterating and innovating on ways to make it better. You can see some examples of places where this is playing out on the organization's "success stories" page: https://www.strongtowns.org/success
High density pockets with shared public spaces is not only more efficient, but IMO, also a lot more effective at building community and giving character to an area.
The worst part is the wealthy in developing nations also gravitate towards US style urban plans, because that is what is sold as 'high class', often with hilariously depressing effects. On the other hand, every single peer that works in urban design has found consensus in a collective dislike for US suburbs as both inefficient and lifeless.
I think it's a bit more complicated than that. The urban cores of developing countries are really, really unsafe places (like, homicide rates of 5-50x of the worst US ghettos). Anyone who gets a bit of money & financial security wants to establish physical distance between themselves, their families and a Mad Max-type situation. I can't speak for every developing country, but having a bit of familiarity with Brazil- they have exclusive suburban neighborhoods physically separate from the favelas for a reason. And then they tend to have a private security force for the neighborhood, etc. I don't mean to stereotype people in the favelas as all bad (every one the 50+ Brazilians I've met through BJJ grew up on one!), but I can be sympathetic to families who just want basic security along with a middle class life.
I basically agree with the Strong Towns thesis that Suburbia Is Bad, but what I think most people here are missing is that when suburbs were planned in the US, inner cities were much less safe and people wanted to put physical space between them. Was there a massive element of racism in that? Yes, but.... it's also true that inner cities used to be way, way more dangerous than they are now. Ask any boomer what chic, expensive parts of New York were like in the 60s, 70s, 80s, etc.
The pension story is more complicated than just development patterns, but cities gradually losing more and more wealth to bad infrastructure patterns over multiple generations is a significant contributor to why pensions are out of funding (along with everything else).
The pension story is that people think they can predict economic conditions decades into the future. Which they can't. And they think they can predict human lifespan statistics decades into the future. Which the can't.
More importantly, the pension story is that there's a built in conflict of interest. The politician and union bosses on the board of the pension plan get to choose the actuary that provides them with the rosiest numbers. The politician needs the union member's votes because they all vote, and the union members are incentivized to maximize benefits and show the lowest costs.
This is all too complicated for normal to understand, and they don't vote for anything other than lower taxes anyway. No one gets elected promising to save future taxpayers money by properly funding pensions by raising taxes now.
people think they can predict economic conditions decades into the future
Like you always will have a minimum level of sprawl, period. Density means you just have a lot of people packed into that minimum area. But you need to have services and things that can't be packed together, and they can't always be dense enough to work with limited transport relative to the town size.
The new thing in suburbanization is the ability to live in a (poor imitation of a) small town and also commute to the city. Small towns themselves existed long before the automobile.
That's when I decided to vote with my feet and relocate.
Thanks to whoever subbed this and comments here for opening my eyes to a shared perspective and organization that seems to represent that contrarian & data backed view towards what's happening in a lot of these places (especially the insecure rust belt cities) across America.
I feel there is something romantic about keeping things a predefined size. The corner store, the closed discussion group, the small town, the limited edition FOO. It tends to get some things right in a magical way.
This cycle repeats forever.
One of the big problems is that that extra money is diverted away from the city budget for 20-30 years. The area I live in used to be inside a TIF (it expired). During that time, only about 10% of my property tax money went to the city. We had overcrowded schools getting 10% of the money they normally would have received. The library got 10% of the money it normally would have. Some of that TIF money went to build a basketball stadium. In a final gesture of goodwill (I guess), when the TIF expired they spent the final ~$40 million in the TIF account on an elementary school.
Also, wow.
For instance, narrow, deep lots would have less street frontage than square lots and therefore have lower infrastructure cost and be more efficient. Similarly, having large areas of undeveloped forest or park land don't necessarily increase costs much if they don't require major infrastructure. (One could reasonably debate whether undeveloped space significantly increases the need for roads elsewhere to compensate for reduced density.)
It really makes you think about the potential house of cards everything must be built on, and what's going to happen when it all catches up to us.
ex. The entrepreneur that gets access to the road system, educated workforce, police/legal system protection... if they didn't have that then they couldn't profit from their widget. So pay something significant back to the system, or you can't participate in the system.
In North America this tends to be true mostly because just about everything was walkable before WW2, and after WW2 the almost the only places that were left that way were the places too wealthy and expensive to demolish and rebuild around the car. Not too much of a surprise, the places that had that much wealth 70 years ago are still the major hubs of the economy today.
For all the love of decentralization HN has, in practice they very much want to centralize where wealth and power is.
No you couldn't, because most American downtowns completely close down outside of 9-5 M-F.
The post-war American development plan is what it is. Nevertheless, we need to strategize to continue developing our cities into places that are worth living in. I think Atlanta has been doing a good job, but it bumps against these zoning constraints a lot. With more people understanding the overall strategy, and with some projects like the BeltLine showing how desirable new approaches can be, we will hopefully see substantial improvement in our lifetime. And by that, I mean that people will really appreciate where they live, and have healthier and happier lives, not that it meets some goal of urbanization or what not.
The default in America is going to be what we're familiar with. Continue building the next subdivision on the nearest farmland or forest. Run more roads to it, widen the current ones to handle the new traffic, watch as the people pull up stakes in their current suburbs and move out, leaving the existing ones to decay.
Towns that follow a different approach will be able to see results in different timescales, but hopefully we will relearn how to build towns that can last generations.
What should we be looking at for precedent? Detroit? Rural Japan?
First what'll happen is that they cut back on maintenance of infrastructure like roads. Then the bond defaults will happen, followed by bankruptcy and haircuts to pensions. Detroit is a better example to look at than rural Japan because it actually went through bankruptcy.
I don't know how long it will keep going, but I do think we need a real correction in order to redistribute some of the wealth.
Yes, because total factor productivity[0] always grows.
> infinite leverage
None of us can raise an infinite bank loan, so this isn't really true. There are many, many, many limits to leverage.
> and assets that always inflate without increasing utility (homes for example).
Also not true... if the value of living in SF increases, it makes perfect sense that land in SF is also more valuable
> It works, until it doesn't.
That's not really a falsifiable assertion.
> I don't know how long it will keep going, but I do think we need a real correction in order to redistribute some of the wealth.
Notwithstanding all the faults in the arguments above, how does distributing wealth arbitrarily at a single point in time ("real correction") solve any of the issues you present?
__________
Not surprising though, pretty much everyone born in the past 60 years has become accustomed to a ridiculous "normal" that has been built on a fossil fuel house of cards.
GC mentioned "total factor productivity", which is not just an assumption that things will stay the same. It's a measure that value (productivity) actually is increasing, all the time.
And the other rebuttals were pointing out flaws with GGC's arguments, none of which relied on "the status quo works".
Yes, of course that is true, but there appears to be no general limit on notional value of derivatives of debt - and when there are limits, they are local to some very particular asset class.
I encourage you to re-watch "The Big Short", or at least the scene where one of the protagonists discovers the 10x or 20x notional value of total housing credit derivatives (and derivatives of derivatives ...).
Although that particular asset class is no longer encumbered in that way, I predict that there is some asset class hiding somewhere that has been levered up in creative ways, just waiting to collapse ...
Is that true? Has that been true for Zimbabwe née Rhodesia?
What about Britain following the fall of the Roman Empire?
If you have a complete meltdown, that's not the growth economy's fault.
Also, there are a number of asymptotic features of "total factor productivity" that are not favorable. The more oil you burn, the more expensive it is to burn oil.
What incredible discovery enables you to make 'always' claims about the world we're living in?
In this context, I'm really proud of my ancestral homeland (mainland China), who in 40 years lifted a billion people from abject poverty through economic growth. Yes, there's significant problems magnified by that, but to paraphrase a popular saying, a full person has a million problems and a starving person has one.
Sure, growth with negative externalities have negative side effects and we definitely should talk about that, but that's a separate discussion and focus than "don't grow".
I totally agree with your leverage aspect and aligning value to utility, and I think that's a very positive avenue of discussion. Let's talk about that instead.
We can disagree about where, when, and how to stop growth. We cannot disagree that it must stop at some point, and that the tyranny of exponential growth means that you will hit this moment frighteningly fast even when you appeared to have plenty of legroom. With a growth rate of even 1.5%, you can be using less than 10% of the resources available to you, and yet you will hit a hard wall at a minimum within 200 years. And even this is a fantasy, as resources, land, and energy are always utilized in decreasing order of ease of access.
Growth is just as much about increasing efficiency. If you continue to chop down the same amount of sustainable wood year after year, but figure out how to do it at half the price (e.g. because robots), that's 100% growth.
Indeed, look at the huge growth in the services industry over the past several decades. That's not using up extra land, energy, etc.
Now growth can involve using up more resources, or it can not, or it can be a mix. But the problem you seem to have is with resource consumption, not with economic growth generally.
At the end of the day, our access to energy is finite. And not simply from a perspective of resources. We are literally a few hundred years shy[1] of heating the Earth to uninhabitable levels from a pure thermodynamics perspective (e.g., entirely ignoring global warming from greenhouse gases, and considering Earth as a simple blackbody radiator).
If you somehow believe that we can have unlimited economic output from finite energy and finite resources on this planet I’m not sure there’s any point in me continuing to debate an argument rooted in magical thinking.
[1] https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/
Not to mention human ingenuity when people get desperate. WWI / WWII saw Germany produce coffee from acorns, oil from coal, and Fanta from vegetable scraps, ensuring a rise in industrial production during 1944 under arduous circumstances. We don't operate at 100% efficiency and we can most definitely increase that number by double digit, maybe even triple digit percentages. Take meat, a horrible source of energy inefficiency. Lab grown meats, meat substitutes grown from vertical farms, even eating different kinds of meats (cricket powder protein bars aren't bad and have a more or less 1:1 energy input:output ratio) result in increased efficiency savings. This is a matter of economics.
Anti-growth simply isn't feasible from a domestic or foreign policy standpoint. There is no way you will convince any significant politician, and by extension his/her voting bloc, that there must be an end to growth. You can't religion or dictator your way out of this either, since it goes against the very essence of human nature.
Finite supply exists even if population growth declines. Finite supply exists even if population declines. Finite supply exists even if it’s untenable from a policy perspective. The expectation of continued unending exponential growth baked into our economic system will run up against the actual limits of what the Earth is capable of providing.
Again, this should not be controversial. Playing games about population growth is simply dodging the fact that even given a population of two humans, any greater-than-one exponent on economic activity will end. The logistic curve exists precisely because of this fact.
It’s not just that it’s difficult, from any meaningful angle it requires us to have completely misunderstood the relevant physics. If your argument relies on us discovering that all of known physics isn’t just off a bit or needing of refinement, but is completely misguided… well, that’s your prerogative I suppose.
Even if you hypothesize a space-colonizing human race, that does nothing for the people who are still stuck on Earth with Earth’s finite resources.
You've fulfilled all of your material needs and now you're in the self-actualization phase of the hierarchy of needs. It took decades of economic growth driven by other people to get your society to the point where people like you care more about fulfillment in their profession rather than food security.
Some people are still subsistence farmers and they need a lot of economic growth to get to the point where they can worry about fulfillment in their professions and taking their pets for a recreational walk.
Why should you get to benefit from the economic growth in your own society while telling others they don't get to have that?
The problem is there is growth that solely exists to feed the capitalist Leviathan vs growth that is actually giving people what they want, and they are hard to disentangle under capitalism. You could the first is trying to disguse itself.
Nobody says that outright, but that is what would have happened if their arguments had been translated into policy in the 1970s. And it is what would happen to poor countries today, if anti-growth arguments were adopted today.
Bacteria in a sealed jar will continue to multiply until they've consumed all the available nutrients, at which point their population collapses. If you constantly add a trickle of nutrients to the jar, this behavior still happens, just with violent yo-yo'ing between collapse and growth until an eventual steady-state is reached.
We can argue whether or not we've exceeded the replenishment rate We can argue how far it's reasonable to go past this point if effects won't be felt for thousands of years. But there is simply no argument to be made that we can continue growing endlessly and exponentially past the replenishment rate of the ecosystem we live in.
Personally, I think we're well past the replenishment rate. Our ecological impact is causing systemic collapse in multiple areas: our climate is warming past dangerous thresholds, our oceans are acidifying and being depleted at an alarming rate, our oceans are rising at an accelerating rate, and we're experiencing unprecedented rates of of extinction of both animal and plant life. We're running out of sand (to make concrete with) for fuck's sake.
On top of this, at current rates of energy growth, we'll literally cook the Earth within two or three hundred years[1]. And I'm not talking about greenhouse gases: just from a raw thermodynamics perspective. Put enough energy capacity on Earth and it will eventually take the form of waste heat. Even in the complete absence of carbon dioxide, the only way for that heat to escape Earth is by being radiated into space. And there's only so fast a perfect blackbody with the surface area of the Earth can get rid of that heat. Even if the Earth were a perfect radiator (it isn't), this[2] is what our future looks like.
[1] https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/
[2] https://dothemath.ucsd.edu/wp-content/uploads/2011/07/tmp-10...
Unfortunately as most people here are probably aware, throwing money at a problem doesn't always result in a viable solution. As more and more of the low hanging fruit of technological advancement gets picked we may be in for some interesting times.
Unfortunately capitalism's need for infinite growth is nigh unstoppable and it always finds a path. If there aren't enough startups, technological advances, or similar we see things like private militaries, Banana Wars, buying elections, private prisons, over leveraging, etc. Capitalism has to have an outlet and we are at its mercy in that sense.
The government seems dead set on making sure the "unable" part never happens. And people are dead set on always willing.
If the government would stop trying to manipulate every market, this maybe wouldn't happen. The Islamic empire was insanely successful for a longer period of time than the US empire has been around, and the Islamic Empire had truly free markets.
For anyone interested, Debt: The First 5000 Years is a fascinating examination of this topic.
I do agree that some regulation is necessary, which is a form of manipulation.
If you're referring to monopolies, for example, the government could regulate anti-trust without -- say -- artificially setting treasury yields (interest rates) and corporate bond yields.
The religion seems to have evolved considerably from the early Islamic Empire. Which is common. Every major religion seems to have undergone several major metamorphoses.
The Coranic prescriptions about usury and other economic activities are incredibly clearly written.
The only conclusion is that there is no reason to believe that it was in any way different to today, and a lot of reasons to believe the restrictions on free trade are even higher than in the modern Islamic world.
What makes you say the Islamic empire had free markets? From the book?
One of the main ideas (of the Empire, not necessarily the religion) was that gold coinage came from God so that people could easily trade. Instead of everyone acquiring all the skills necessary for sustenance (farming, tool building, carpentry, etc) -- they could become masters of a few skills and trade the fruits of their skills in the open market. The idea was that doing so, humans could advance much faster. This was sort of God's secret sauce. So interfering with the market was like interfering with God. It was a no no.
One could argue that they manipulated the market by banning usury (interest bearing loans). However, before the Islamic Empire, interest was usually VERY high -- 60%+ per year was common. Debt was so cost prohibitive that the constant need for debt Jubilees was its own problem.
It's unclear how the Islamic Empire financed all these merchants without interest bearing loans. I'd love to learn more about how that worked.
In Japan, house prices commonly depreciate. I don't see any evidence their economy is unaffected by that fact.
Maybe that's why their homelessness per capita is almost 57 times lower than the States'.
> Homelessness grew noticeably more widespread in Japanese society since the collapse of the Japanese asset price bubble across the 1990s, and the resulting "Lost Decade" of economic stagnation. This has resulted in higher unemployment, a contributing factor towards potential homelessness.[1]
National economies are complicated, and the connection between high (or continually-appreciating) housing prices and homelessness doesn't always run the direction that a naive model assumes it does.
I hear this a lot. As far as i know it's not actually true. Is there anything specific in orthodox economic theory that requires never-ending growth?
> I hear this a lot. As far as i know it's not actually true. Is there anything specific in orthodox economic theory that requires never-ending growth?
I think a charitable interpretation of this claim is: people's planning (which is usually limited to the short term, when it happens at all) typically assumes the optimistic case.
This is certainly true for everyone who lives paycheck to paycheck.
It's also true for companies who survive on a revolving line of credit to fund longterm operations.
Thus, growth must always exist for the current system to continue.
Why?
This doesn't sound obviously true to me. Imagine an economy in perpetual long-term stasis, with zero inflation. There's a company which has a factory which turns a profit, because it makes useful stuff. Every ten years, they need to replace the factory. So they take out a loan, and pay it off, with interest, over ten years. The lender earns interest with positive real value from this. Is there anything in this story which is impossible? Is there a theoretical reason a world like that couldn't exist?
Let's expand on the example of your factory. Say that you have a factory, that needs to be replaced in ten years. Why would you take out a loan over ten years with substantial interest, when you can simply save up over ten years to buy another factory? Since there is zero inflation, this is incredibly better for you. And so, there is no reason for you to take a loan; and you won't take out a loan. For an economic transaction to happen, it needs to be in the interest of both party, and in a no-growth economy taking out a loan is either in the interest of the lender or the debtor, but never both, on average, for a given lending policy. This is not the case when there is growth, which is why we have banks, whereas we didn't really have any kind of lending infrastructure in times were growth was of or near zero.
The only people that might want a loan are people that don't have enough capital to get started, but in a zero-growth economy you cannot expect that they will be able to repay you, so you won't lend to them, and if you do lend to them expecting that they will not pay you back that will be at astronomical interest rates and will essentially be usury.
The only real physical limit to productivity is our energy input. When we create things, we use energy and time to turn raw materials into useful stuff. Today most of our energy comes from the plants we eat (ie the sun) and from the ground. But we are not close to using even a small fraction of the energy that the sun gives us, so there is still lots of room to grow.
ex. The entrepreneur that gets access to the road system, educated workforce, police/legal system protection... if they didn't have that then they couldn't profit from their widget. So pay something significant back to the system, or you can't participate in the system.
This bit is true, but we should remember that no one wants to give up anything, rich or poor. That's human nature.
I think that’s the real problem. Work should be rewarded and not just owning things.
Work in cities is "highly rewarded" through high salaries (obviously). High house prices is (part of) how work in cities is _taxed_, which is pretty much the exact opposite of rewarding.
The goal of human existence is not and should not be "gainful employment".
Automation vs working is a different axis than rewarding capital vs working. They are both good discussions to have, though.
In the meantime it seems society is getting skewed towards benefiting owners over people who work. The news celebrates rising stock markets and rising housing prices. We celebrate “job creators”. The Fed responds when the stock market goes down but just shrugs when real wages for most people are stagnating or even going down . Investment income is taxed favorably over income from work.
Companies claim they are run solely for the owners (shareholders). Why not make workers also stakeholders that need to considered?
'Redistribution' is inherently unfair, and in a global world it will only cause capital flight.
Increases wealth for a few. Studies have shown that technology is not actually making us more productive in the past 10+ years.
> In order to keep growing
Who says we need to keep growing? We have enough mouths to feed on this planet already.
> 'Redistribution' is inherently unfair
There is no such thing as “inherently” fair or unfair. Did anyone “earn” a wealthy upbringing? Did anyone “earn” their genetic advantages? Outcomes are a result of one’s nature and nurture, neither of which are under one’s control. Anything you have is a gift from the universe, and you will either share your gifts or not.
“If I had to support my family growing up instead of having time to code, if I didn’t know I’d be fine if Facebook didn’t work out, I wouldn’t be standing here today” - Mark Zuckerberg
“I think about the amount of human potential that is being wasted by people that are not doing what they want to do. I think about how great it would be to undo that. And that’s really powerful to me.” - Sam Altman
“People who fall by the wayside, through no fault of their own, as the goose lays more golden eggs, should still get a chance to participate in that prosperity.” - Warren Buffett
> and in a global world it will only cause capital flight
“Only” would imply that everyone with capital has the same opinion as you, but it doesn’t sound like you understand how people with capital actually think.
This is a peculiar, and unsubstantiated assertion. I certainly wouldn't consider this an axiom in any discussion about economic policy. Can you explain a little more?
Or are you just saying that you believe that redistribution is unfair?
So if redistribution is “unfair” it’s only to counteract the inherent unfairness of the current system.
Here in the UK we have a bit of a different history on this that has pushed British conservatism in a more centrist direction. The first and second world wars were existential crises for us that stretched our economies and society to near breaking point. Millions of Britons were called up, worked in munitions factories, or volunteered in public services and the Land Army. It was a concerted effort across all levels of society. A major problem in the first war was so many draftees were unfit for service due to poor health and nutrition, this created a consensus that a coordinated system of social support and health care was essential for national security if nothing else.
So over here, it’s not really about redistribution. Sure there are plenty of socialists over here who are committed redistributionists, sure. Socialism is entrenched in Europe in a way it really isn’t in the US. But even among the majority of conservatives over here, history has shown us the its in the national interest to have a population that is well nourished, healthy and has a basic education that makes them fit to work, and serve if it comes to that.
Seems like a noble goal, no?
Humans want better lives. More living space, more free time, faster cars, whatever. Humans will not stop wanting this for as long as there are humans. There are two ways to get it.
One is creating more stuff. This is growth.
The other is taking somebody else's stuff. This is war.
Growth is better.
But zoning restrictions that inflate housing prices? That's not growth, it constrains growth, which implies...
Which is to say, depending on your environment, you can create a "better life" (by your definitions) by catabolizing existing resources.
You can't catabolize forever, of course, but it's an immediate and obvious refutation to your claim that "better lives" can only be pursued through growth or war.
More free time implies translating productivity gains into less time working, rather than the current economic policy of pushing everyone into working full time such that productivity gains just create more waste.
There will be no redistribution, that's a fairy tale. There will only be evaporation.
It ends in the next 8-14 years. First time event where retiring class > working class. Population growth assumed to be equal or higher for every subsequent generation back 50 years ago.
Wait until those surplus programs stop becoming surplus. If you look now and think inequality is bad now, wait, it gets a lot worst.
How would a correction lead to redistribution?
Corrections hurt the poor more than the rich. For the rich, a correction is a great time to invest. For the poor, it is a time of unemployment and despair.
[Citation needed]. That's a pipe dream. Human nature remains constant.
I don't know how to help people who live in sparse suburbs. Not everyone needs to live in Manhattan, but exurban sprawl is alienating (and unsustainable to boot). It just doesn't build community.