Monday, January 19, 2015

Intro to Urbanism, Part Five: Tapping the Piggybank

Today, I’ll resume my New Year’s “Intro to Urbanism”, an effort to provide a remedial urbanist background for readers who’ve come only recently to this blog.

In my last post on the “Intro”, I attempted to explain the fiscal reasons for urbanism.  (Earlier, I had touched upon my reasons for the posts, my attempt at definitions, and a presentation of the breadth of justifications for urbanism.)

Spotting the Deer in the Brush: I was unsatisfied with my efforts in the last post on the fiscal question.  From years of personal observation, and of reading the cogent thoughts of others, I’m absolutely confident that the urbanism is the more fiscally responsible approach to land use.  However, it can be a difficult understanding to impart.

Many years ago, I was touring a proposed golf course with long-time golf pro and newly-minted golf course architect Tom Weiskopf.  As I bounced an SUV down a rugged dirt track near the future 18th tee, Weiskopf abruptly asked me to stop the car so he could observe a deer that was watching us from cover.

Even with the car stopped, neither the developer nor I could see the deer, but Weiskopf carefully directed our sight, using trees and other backdrop elements as reference points until both of us could discern the deer, half-hidden in sagebrush and peering warily at us over a volcanic boulder.  The deer was indisputably real, but was hidden from sight to all but those who had long history of spotting possible prey in natural settings.

The grasp of fiscal urbanism is similar.  Years of practice at spotting the flaws in suburban land-use justifications makes them easy to spot, even from a bouncing SUV.  But training others to see them as easily isn’t a trivial task.  Perhaps the best I can do is to provide hints, through an example and a pattern, about where to look.

A Hypothetical Example: This example isn’t based on any particular project, but has much in common with a great many infrastructure improvements over the last half century or more.

Faced with traffic congestion in a growing area of town, the town officials identify a possible fix, a new arterial.  The state and federal governments support the solution and are willing to provide 90 percent of the funding through various programs.  If there are any skeptics is in the town hall who question how the town will maintain the new road, they’re quickly swept away by the civic boosters who point out the construction jobs that road building will generate and the new growth, surely enough to pay for maintenance, that will flow from the new road.

Moving ahead twenty-five years, the skeptics were largely right.  The road construction jobs are far beyond the range of the rearview mirror.  Although some growth occurred in the area accessed by the road, the boom is now sagging and the incremental property tax revenues aren’t enough to maintain the road.  Even worse, the road is in worse condition than it might have been because the tax revenues that could have maintained it were diverted to other under-maintained roads.

A complete rebuild of the road is perhaps justified by engineering parameters, but there are no funds for the work, especially because state and federal funds are available only for new road construction.  So instead the voters point fingers at the town council for poor management and the town council points fingers at the citizens for not approving new taxes.

In a draconian world, removal of the road might be an option, but towns don’t tear up roads that serve taxpayers, no matter how sparse or unproductive the uses might be.

At the very least, the exercise should have been a lesson, right?  Not even close.  The flawed decision was made twenty-five years earlier, which feels like a different lifetime to most town people.  Meanwhile, the town hall has identified a possible arterial in another part of town that could spur new growth, the state and federal government are willing to participate, and the civic boosters are lining up in support.

And the beat goes on.

A Pattern of Borrowing from the Future: The financial legerdemain used to balance municipal ledgers against the costs of suburbia often includes borrowing from the future.  The example above, where immediate construction jobs and short-term property tax gains were secured in exchange for long-term maintenance obligations on future taxpayers, is just one example.

As another example, faced with infrastructure maintenance costs, a city might be unable to meet the immediate salary demands of a public employees’ union.  Instead, it offers improved pension benefits, largely to be funded by future taxpayers.

As yet one more example, a city might trade a long-term income stream for the cash to meet an immediate cash crunch, thereby denying future generations of the income to meet their needs.  The City of Chicago did this a few years back with parking meter revenues.

An image I’ve occasionally evoked in this blog is that of an adult sneaking into the room of a sleeping child or grandchild and slipping coins from a piggybank to make a payment on the SUV.  Yes, it’s an objectionable image, but it’s often the way that municipal finance works in the 21st century.

(By the way, I don’t have kids.  But I have a lifetime of collecting nieces, nephews, and the offspring of long-time friends, about all of whom I care.  And I don’t wish to leave them with the debts of my generation.)

Summing Up: Have I convinced anyone of the fiscal justification for urbanism?  Perhaps not.  But, in alerting readers to watch for overly rosy economic projects, unfunded maintenance needs, and schemes to push costs onto future taxpayers, I’ve laid the groundwork for readers to spot when they’re being sold a bad idea, much like Tom Weiskopf tried to teach me how to spot a deer in a thicket.  And once readers have begun honing and utilizing that skill, the realization that urbanism is a better approach to land use will soon follow.

 (To be clear, it’s not that urbanism avoids the fallacies behind bad infrastructure decisions.  We sometimes allow ourselves to be seduced by bad ideas regardless of the land-use paradigm.  One could argue that our problem is more human nature than land-use form.  But with urbanism, the costs of the infrastructure improvements are likely to be more modest and the assumptions about the resulting economic activity are more likely to be met.  So, when we make our inevitable bad decisions, urbanism limits the depth of the hole we dig.  And we’re likely to dig fewer holes.)

I’ll stop here, with a strong recommendation that readers check out the StrongTowns oeuvre.  The StrongTowns staff and the advocates that have attached themselves to StrongTowns lead the way in pointing out the fiscal logic for urbanism.  Or readers could keep reading this blog after the Intro is complete.  I rarely go more than a couple of weeks without mentioning StrongTowns.

Next time, I’ll touch on the environmental grounds for urbanism.  I may state a few facts that some will find controversial, but overall the environmental arguments for urbanism are less murky than the fiscal.

As always, your questions or comments will be appreciated.  Please comment below or email me.  And thanks for reading. - Dave Alden (

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