Wednesday, July 30, 2014

suburbs will die: the most spectacular future time orientation failure in human history...,

Time |  The way suburban development usually works is that a town lays the pipes, plumbing, and infrastructure for housing development—often getting big loans from the government to do so—and soon after a developer appears and offers to build homes on it. Developers usually fund most of the cost of the infrastructure because they make their money back from the sale of the homes. The short-term cost to the city or town, therefore, is very low: it gets a cash infusion from whichever entity fronted the costs, and the city gets to keep all the revenue from property taxes. The thinking is that either taxes will cover the maintenance costs, or the city will keep growing and generate enough future cash flow to cover the obligations. But the tax revenue at low suburban densities isn’t nearly enough to pay the bills; in Marohn’s estimation, property taxes at suburban densities bring in anywhere from 4 cents to 65 cents for every dollar of liability. Most suburban municipalities, he says, are therefore unable to pay the maintenance costs of their infrastructure, let alone replace things when they inevitably wear out after twenty to twenty-five years. The only way to survive is to keep growing or take on more debt, or both. “It is a ridiculously unproductive system,” he says.

Marohn points out that while this has been an issue as long as there have been suburbs, the problem has become more acute with each additional “life cycle” of suburban infrastructure (the point at which the systems need to be replaced—funded by debt, more growth, or both). Most U.S. suburbs are now on their third life cycle, and infrastructure systems have only become more bloated, inefficient, and costly. “When people say we’re living beyond our means, they’re usually talking about a forty-inch TV instead of a twenty-inch TV,” he says. “This is like pennies compared to the dollars we’ve spent on the way we’ve arranged ourselves across the landscape.”

Marohn and his friends are not the only ones warning about the fix we’ve put ourselves in. In 2010 the financial analyst Meredith Whitney wrote a now-famous report called The Tragedy of the Commons, whose title was taken from the economic principle that individuals will act on their own self-interest and deplete a shared resource for their own benefit, even if that goes against the long-term common good. In her report, Whitney said states and municipalities were on the verge of collapse thanks in part to irresponsible spending on growth. Likening the municipalities’ finances and spending patterns to those of the banks leading up to the financial crisis of 2008, Whitney explained how spending has far outpaced revenues—some states had spent two or three times their tax receipts on everything from infrastructure to teacher salaries to libraries—all financed by borrowing from future dollars.

Marohn, too, claims we’ve tilled our land in inefficient ways we can’t afford (Whitney is one of Marohn’s personal heroes). The “suburban experiment,” as he calls it, has been a fiscal failure. On top of the issues of low-density tax collection, sprawling development is more expensive to build. Roads are wider and require more paving. Water and sewage service costs are higher. It costs more to maintain emergency services since more fire stations and police stations are needed per capita to keep response times down. Children need to be bused farther distances to school. One study by the Denver Regional Council of Governments found that conventional suburban development would cost local governments $4.3 billion more in infrastructure costs than compact, “smart” growth through 2020, only counting capital construction costs for sewer, water, and road infrastructure. A 2008 report by the University of Utah’s Arthur C. Nelson estimated that municipal service costs in low-density, sprawling locations can be as much as 2.5 times those in compact, higher-density locations.

Marohn thinks this is all just too gluttonous. “The fact that I can drive to work on paved roads where I can drive fifty-five miles an hour the minute I leave my driveway despite the fact that I won’t see another car for five miles,” he says, “is living beyond our means on a grand, grand scale.”

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