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 (davealden53@comcast.net)

Intro to Urbanism, Part Four: Fiscal Urbanism

This is post number four in my New Year’s “Intro to Urbanism”.  It’s my attempt to increase the knowledge of readers who have an interest in urbanism, but may be insecure in their current familiarity with the subject.

In the first post, I described my reasons for writing this series of posts and acknowledged my modest qualifications for the assignment.

In the second post, I wrestled with a definition and synonyms for urbanism.

In the third and most recent post, I noted the number of contemporary land-use challenges, from greenfield preservation to climate change to municipal finances, that can be addressed, at least partially, by urbanism.  And from the answers to those challenges, I noted that urbanism is generally comprised of two elements, sufficient density to meet community goals and strong non-automotive transportation options.

Today, I’ll begin exploring the concept that I called “fiscal urbanism” in the last post, the possibility that urbanism can help alleviate the financial distress being felt in many city halls in the 21st century.  Admittedly, “fiscal urbanism” is a term I coined for the last post, but it’s shorthand that the proponents of the concept would likely accept without hesitation.

However, I must admit some trepidation about wading into this subject.  StrongTowns has been a leader in highlighting the financial flaws in the suburban land-use paradigm and the opportunities of urbanism to address the problem.  I belong to StrongTowns and follow their work regularly.  If I were to give a complete review of the justifications for fiscal urbanism, I’d be largely repeating, probably ineptly, the positions laid out by them.

Instead, I’ll give an overview of the topic, note a few of my own thoughts, and then highlight StrongTowns in the post-Intro syllabus that I’ll offer a few posts hence.

Also, I find that even an overview requires more words than I had anticipated, so the last part of the fiscal urbanism discussion will be deferred to the next post in this Intro.

Fiscal Urbanism: Reduced to its essence, suburbia is expensive.  Between construction of the additional infrastructure required to serve an increasing far-flung world, the long-term maintenance of that infrastructure, the cars and gasoline needed to navigate the suburban world, the home and yard maintenance implicit in moving from an urban apartment to a suburban home, and many other factors, our pocketbooks have been squeezed by the rise of suburbia.

That is not to say that suburbia is the only element of life that is more expensive now than it was 70 years ago.  As one example, we now demand greater environmental safeguards, a demand that has costs.  (That isn’t to say that we shouldn’t have upgraded our environmental protection, only to note that the change didn’t come free.)

As another example, technology consumes a portion of our paychecks that no one expected 70 years ago.  High-definition televisions and frequent smart phone replacements cost far more than occasional wireless purchases.

Faced by increasing financial pressures, perhaps including growing income inequality, although that topic lays outside the scope of this blog, people looked for relief.  Not paying for the costs of suburbia was an easy solution.  Among the strategies available were rejections of tax hikes, ballot initiatives to cap property taxes, and fees imposed on new construction that are nominally for new infrastructure, but often get spent to fix existing problems.

A more honest intellectual response would have been to acknowledge that, among the other options on which we could spend our paychecks, we’d prefer not to spend money on sprawl.  But instead we choose to continue to building suburbia, while looking for justifications and stratagems not to pay for it.

Proof of the inefficiency of sprawl can be tricky.  It’s well hidden within a multitude of funding programs, such as intergovernmental payments, and deferred costs, such as underfunded public sector pensions.  But StrongTowns has done well at identifying indications of the problem.

First, StrongTowns notes that the per acre tax roll assessments are far greater in every downtown studied than in the urban fringes.  So downtowns are effectively forced to subsidize sprawl.

Also, as of a couple of years ago, Chuck Marohn, the StrongTowns founder, noted that the accumulated highway maintenance reserves for the entire U.S. were roughly equal to the accumulated maintenance needs for California highways only.  So we’ve been building a transportation system without a plan to maintain it.  (Given the concerns over the gas tax funds, I imagine this situation has worsened recently.)

Third, StrongTowns notes that the amount of public and private debt has soared since World War II, indicating a problem of keeping up with the costs of modern life.

I have several more key points to make on fiscal urbanism, but I’ve claimed enough of your attention for today.  I’ll conclude the discussion when I next return to the Intro.

Next up, I’ll give myself a little breather from the task of writing the Intro.  Instead, I’ll offer thoughts on the next episode of “The Planners”, a BBC show on land-use planning.

(Note on the photo: The building is 555 Hudson Street in Greenwich Village.  It was from a window on the second story that Jane Jacobs watched streetlife and reached the urbanist conclusions that became “The Death and Life of Great American Cities”)

As always, your questions or comments will be appreciated.  Please comment below or email me.  And thanks for reading. - Dave Alden (davealden53@comcast.net)