Dead Ideas

We are continuing today to highlight the Curbside Chat Companion Booklet that we released here on Monday. The report is getting wide distribution, and for that we are thankful. But remember, it is one thing to preach to the choir. The echo chamber may love these words, but we really need you to pass them on to those public officials making decisions in your community along with the key people influencing them. We need to give them an alternative narrative and help them start the long walk back from the edge.

I'd like to publish here on the blog a list of people and places where our readers have shared the report. That's the effort we want to highlight more than anything. Please leave a comment here on the blog documenting your effort or send me an email with the same. You can remain anonymous in both places if you prefer.

There are two special acknowledgements we need to make today. First, none of this is possible without the great work of Michael Kooiman (LinkedIn). He is the brilliant artist that formatted the report for us in addition to creating all of the great graphics on our website. I love his work and I love working with him. I could not possibly recommend anyone more.

Second, we recognized part of our ace editing team yesterday. We also want to say thank you to some special supporters who helped out and influenced the report, including Amy Brendmoen, George Matthew Linkert, Scott Ulrich, Eli Damon, Jake Krohn and Elise Rapoza. You all have been with us from the start and we can't thank you enough.

Now, dead ideas...

There are no solutions, just rational responses

Once a problem is identified, it is natural to want a clear solution. What can be done to solve this problem? When people ask this question, they often mean: What is the solution that will allow me to continue to live essentially the way I do now without undergoing too much turmoil? The answer is: no such solution exists.

The analogy we have used at Strong Towns is: A person gets in a car accident. They are badly hurt, unable to work, have no insurance and have large debts that now cannot be repaid. There is no “solution” to this situation. There are only rational and irrational responses.

The way forward for our communities is to adopt a set of rational responses to the current situation. This will include shedding some “dead” ideas from the recent past and embracing a broad set of strategies to start making America’s communities more productive. Local leaders need to position their communities for change if they want to be prosperous in the coming decades.

Dead Idea: We can continue to grow without considering the Return on Investment

The suburban development pattern has offered cities and towns, in the name of growth, an exchange of near-term cash benefits for long-term financial liabilities. Benefit/cost analyses done in support of this style of development almost always deal with cash flow concerns while overlooking long-term maintenance costs beyond a single life cycle. Analyses of large transportation projects completely overlook any financial return, focusing instead on quality of life issues such as reduced driving time. As a result, we have made very inefficient use of our infrastructure investments.

America will not have a productive economy while we ignore the financial productivity of our places. When each component of a system costs more to maintain than it produces in excess wealth, the sum of those components will run a perpetual deficit. New growth alleviates the near-term problem at the expense of creating a greater long-term disparity.

Our places need to create value, not destroy it. We have to demand that our cities, towns and neighborhoods produce a positive financial return. This will mean completely rethinking how we invest in our communities.

Dead Idea: We can solve our local financial problems by bringing in more growth

American cities and towns have long sought to create new growth as a way to increase the local tax base and enhance tax revenues. The way we have financed growth – exchanging near-term gains for long-term liabilities – has encouraged an inefficient use of our infrastructure investments. More than two generations into this approach, we are overwhelmed with infrastructure to maintain. Doing more of the same approach will only make the long-term problem worse.

With an end to the four Mechanisms of Growth from the post World War II era, however, the way our communities grow is changing. We are not likely to see large projects and major, leveraged- investments with capital coming from outside the community. We are most likely to see small-scale projects funded by local capital, such as a homeowner buying the neighboring property out of foreclosure, converting it to a duplex and then renting it.

Our local regulatory, planning, financing and engineering systems are designed to work in the Old Economy. If we are to see growth at the local level in a New Economy, all of these systems need to be rescaled to fit the changed reality.

Dead Idea: Attracting a large employer will solve our problems

For every community that has won the lottery by landing one large employer that brought jobs and prosperity, there are thousands of communities that have pinned their hopes to this approach and come up with nothing.

The standard economic development model at the local level in the United States relies on convincing an employer from outside the community to relocate to the community. We have established an immense system of subsidies, supports and programs to facilitate these transactions. Not only is this vastly inefficient, it almost never works as planned.

The worst part of the economic “hunting” strategy is that is takes the focus off the local community’s home-grown economic activity. A necessity in the New Economy is not seeking that one business that will bring in fifty jobs, but instead working with fifty local businesses to grow one job each. Not only is that a more sustainable and resilient approach, but one where every community has the capacity to be successful.

Dead Idea: Property owners have a right to develop their property and the public has an obligation to maintain the infrastructure

In America, we have a long tradition of property rights. Prior to suburbanization, the United States was comprised of areas that were either clearly rural or, even in the small towns, clearly urban. This helped simplify the role of local government, which was necessarily more active in the urban areas than in the remote, rural spaces. As the difference between rural and urban has diminished, the expectations of local government in formerly-rural areas have grown.

Many local officials believe the maintenance of infrastructure is exclusively the role of local government, although privately-owned and maintained infrastructure is not uncommon. Where local governments assume the obligation of maintaining infrastructure, it must ensure that the pattern of development is productive enough to maintain itself over the long term. When the public is taking on long-term obligations, local officials need to demand a pattern of development that pays for itself.

Local governments can hold to the notion that property owners have a right to develop their property in the way they see fit, but they then must release the public from an obligation to maintain the infrastructure. As seen in the case studies of this report, when each new development creates such tremendous, unfunded public obligations, growth ultimately raises the tax rate and lowers the overall standard of living. The indirect public subsidy of unproductive growth needs to end.

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