18 ms·

But Rich People Live Here, So We Can't Be Going Broke

261 points by oftenwrong 8y ago

microcolonel 8y ago
It is very, very easy to spend money; and if you have any, there are about seven billion people who want you to spend it.
golemiprague 8y ago
I don't understand what's the point of this article, people want to go to a good neighbourhood so their kids will be able to be in a good environment with other kids who are same as them. It is not an investment property, it is investment in the next generation. If the value is kept for the next 30 years it is perfect, after that the kids are out and the parents can move to some other place.
mushufasa 8y ago
tldr: a) city population density outweighs most other factors at producing overall prosperity. b) suburban development is a bad roi for public financing c) therefore, a lot of seemingly affluent areas (think gated communities) are actually going to ruin, because the roi on public financing can't keep them affluent. the article is interesting, but light on quantitative analysis. you're supposed to accept that the author ran the numbers. in particular, i doubt that misallocated public financing is the main reason for a city to grow or shrink. the global economy is too strong. there could even be reverse causation -- all the best urban planners left cleveland as it shrank, which resulted in waste...
- bilbo0s 8y ago
  "...all the best urban planners left cleveland as it shrank, which resulted in waste..." ??? But if they all left Cleveland, wasn't that because the places they moved to were more desirable for whatever reason? And if those other places were more desirable, doesn't that imply that they missed something in their planning? (Or else they would have done the planning to make their own place that desirable.) Serious question BTW. I'm not trying to be snarky.
  - mushufasa 8y ago
    the article suggests that bad urban planning can cause a city to shrink. reverse causation would be that cities which shrink result in bad urban planning. the mechanism for the reverse causation could be that the best urban planners may choose to work in cities with promising growth. or, that shrinking makes urban planning too unpredictable to be effective. you seem to be assuming that urban planners cause a city to be desirable or not. I'm not so sure planners have as much influence, versus, say, trade/resources/industries. point being, i don't think the causal mechanisms on this are clear.
  - dragonwriter 8y ago
    > But if they all left Cleveland, wasn't isn't that because the places they moved to were more desirable for whatever reason? Yes, for instance, jobs for urban planners, which are both more plentiful and better paying in growing (both population and economy) areas. > And if those other places were more desirable, doesn't that imply that they missed something in their planning? No, in the same way that an investment planner that experiences a known risk that would have been more likely under alternative courses, or who underperforms other portfolios that benefited from access to investments only made selectively available to people who owned particular investments before that advisor came onboard have not necessarily missed anything. Unavoidable risk and opportunities constrained by initial conditions definitely affect urban planning.
- pchristensen 8y ago
  The author has run the numbers (or at least found and cited them) - see e.g. https://www.strongtowns.org/journal/2018/5/7/the-more-we-build-the-poorer-we-get https://www.strongtowns.org/journal/2018/5/7/the-more-we-bui... and https://www.strongtowns.org/journal/2018/7/20/mapping-the-effects-of-californias-prop-13 https://www.strongtowns.org/journal/2018/7/20/mapping-the-ef... It's true that the global economy is the biggest factor in a city's prosperity, but a strong economy is only papering over the fiscally unsustainable way most municipalities are run. Also, generally, urban planners are the technicians that implement decisions made by elected officials. They are NOT the ones setting the vision for a city. [citation: Masters in Urban Planning that I never used]
  - aidenn0 8y ago
    Many articles on the site have numbers so I'm curious why you chose the first one; it has exactly 1 number, and a graph that looks illustrative rather than empirical. Second article definitely has data in the graphs (as does TFA, for that matter).
- TangoTrotFox 8y ago
  Doesn't this seem to be conflating correlation with causation? A sign of a wealthier than average household is a beamer in the drive way. That does not mean that buying a beamer is a a good way to get rich, quite the opposite in fact. Areas that are 'overall prosperous' are going to tend to drive economic migration. As a city's area for development tends to be limited this is going to drive population densities upward, as compared to areas that are not economically desirable. San Francisco is a great example, all the way back to its beginnings. San Francisco was practically created by the California gold rush. At the start of 1848 its population was around 1,000. By the end of 1849, it's population was 25,000. By 1890 it's population was 300,000 and it was the 8th largest city in the US. By 1906 the population was more than 400,000. Things then got shaken up by the quake of 1906. But the whole point is that as its population increased 40,000% in about 5 decades, you'd have seen population densities skyrocket. But the city didn't become prosperous because the population density increased. Its prosperity caused the density increases.
  - SilasX 8y ago
    >Doesn't this seem to be conflating correlation with causation? A sign of a wealthier than average household is a beamer in the drive way. That does not mean that buying a beamer is a a good way to get rich, quite the opposite in fact. Yep. And most economic policy is based on exactly this fallacy: "When 'the economy' is prosperous, people are buying a lot. Therefore, if we artificially stimulate the economy, we will get prosperity in the relevant, desired sense."
    - yongjik 8y ago
      That's not a fallacy. If a lot of people start to buy a lot, more jobs are created. You are trying to take the case of a single household (where "buying a lot" can only mean using a lot of money) and apply that to the whole society.
      - SilasX 8y ago
        You just bought into the fallacy -- jobs (and buying stuff) are only good when they're satisfying a legit demand, not one artificially created by the stimulus policy. To the extent that that the desire to provide that job or purchase that item is artificial, the "prosperity" indicated by that action is likewise artificial. If I put a gun to your head and forced you to buy a sofa, that's not the same kind of prosperity as when you independently judged that you needed a sofa and freely bought one. The same basic dynamic is going on when I conceal it slightly by forcing other people to give me money so I can subsidize your sofa purchase.
- village-idiot 8y ago
  One of the points the author makes is that a lot of American communities are not financially robust. If the global economy hiccups, they won’t be able to handle it and might go bankrupt.
acchow 8y ago
"I have all this nice stuff, so obviously I was able to afford it. And because I was able to afford it, it's not a problem that I have it. Nothing to worry about." Did they just make this up? What proportion of people actually think like this? I think normally you look at your salary (or bank balance) to see how "rich" you are.
- Johnny555 8y ago
  I think there are a lot of people like that. I've visited homes of plenty of acquaintances that, based on their jobs, earn less money than me, but live a much more luxurious life - for example, a 2700 square foot 4 bedroom 5 bath home, $5000 viking stove (how do I know it was a $5K stove? They were sure to let me know: "Gosh, $5,000 for this stove and it still burns the eggs!"), BMW car for him, BMW SUV for her, private school for the kids (despite paying a premium to live in a desirable public school district). It's possible that they have some alternate source of income, but still I wonder how they can afford all of that luxury. I think there are more people that look at the equity in their home to see how rich they are than look in their bank account.
  - ChuckMcM 8y ago
    This was something that surprised me too. Looking at how someone lived and expecting them to be wealthy, only to find out later that they had no savings for retirement, and selling off property to get out from under leases or mortgages.
  - awvcs 8y ago
    I think what has happened is that post war we have defined success as having it better than our parents. Which isn't necessarily incorrect, though ways of measuring that can be. Starting in the '80s people have been making a lot of money in things like real estate and the stock market, while the price of access to opportunities like education and job markets have increased. If you weren't part of the former group, you have essentially been left behind. At the same time wealth, or inequity, isn't something a lot of people talk about openly. So you are left either accepting your place in the world or you can pretend that you have success by going into debt and hoping for the best. That is that the market continues to be on your side. Some people might even think this is the normal thing to do, not realizing other people have family wealth. Some people realize what is going on, but thinks that it is worth trying anyway. Or they could be those people with family wealth.
dexwiz 8y ago
I find it hilarious Carmel, Indiana is featured so heavily in this article without mentioning Roundabouts. I grew up near Carmel, and it was famous for its Roundabouts. They have replaced almost every 4 Way Stop with a roundabout. I believe they have more Roundabouts than any other town in the US. They have gone so far as to replace classic overpass bridges over the two major highways with Cassini Oval shaped Roundabouts. http://carmel.in.gov/department-services/engineering/roundabouts http://carmel.in.gov/department-services/engineering/roundab...
- Johnny555 8y ago
  I think they did mention them, just not by name since whether a road project is a roundabout or some other intersection isn't really relevant: The city has gone on an above-and-beyond municipal spending spree in recent years—road projects...
  - drharby 8y ago
    Wouldnt be surprised if mafia was involved
    - mikestew 8y ago
      It has nothing to do with the mafia, and everything to do with Carmel's long-time self-esteem problem. The only people that insist on pronouncing the town's name like the one in California are Carmel residents. The rest of the world pronounces it "KAR-mel". Or, more snidely, "CarMEL-by-the-Interstate". It was particularly hilarious that residents like to think of Carmel as where the rich people live (it's really where the upper middle-class live), and then I moved to Redmond and saw how real rich people lived. :-) I haven't lived near Indianapolis in twenty years, but I don't imagine it's changed much. In which case public spending is probably motivated more by keeping up appearances, just like with Carmel's citizens, than it is about corruption.
- dagoat 8y ago
  So does traffic move smoothly now?
Shivetya 8y ago
funny thing about Georgia, or metro Atlanta that is. We just completed the new Northwest Corridor Express Lanes, 30 miles of elevated reversible toll lanes for a whopping eight hundred and thirty four million dollars. however with regards to the story, Atlanta has its issues with old and needing of repair infrastructure but mostly this comes about because politicians love to cut a ribbon and money goes to new and expensive projects while maintenance gets deferred. This is very evident in heavy rail metro transit systems across the country where it is estimated that over a hundred billion dollars has been deferred. however the real bomb coming is the public employee pension funds running out of money, from police to fire to teachers to city employees. Chicago has a time bomb set to go off in just a few years [1] and if we thought infrastructure costs were killer wait till the pensions collapse, here is a hint : worn out sewers and bridges won't sue you. Already more than a few cities and counties have filed bankruptcy because of these costs. rich neighborhoods want more and more services but when the bill finally comes due it is only then that they realize the true cost of that folly. it easy to live on deferred payment plans until it comes due [1] https://chicagocitywire.com/stories/511130434-projection-chicago-s-police-pension-fund-will-be-broke-in-2021 https://chicagocitywire.com/stories/511130434-projection-chi...
- citythrow23 8y ago
  From the perspective of a buyer, this leads to the opposite conclusion of the article: instead of buying an in older neighborhood that has held on to its property value but racked up pension debt, buy in a brand new neighborhood that may decrease in property value but has no pension debt and new infrastructure. From the perspective of society at large, both are pretty bad. The bet for newer suburban home buyers is that you can buy the home, raise kids for 20-30 years in the good schools that use the new home values as a barrier to entry, sell it without a major loss, and then move somewhere cheaper and older before the home or the home's surroundings deteriorate.
  - leetcrew 8y ago
    > then move somewhere cheaper and older before the home or the home's surroundings deteriorate sure, if you know exactly when this will happen. but if you know, other people probably know, and they won't pay as much for your house.
iammiles 8y ago
Although the article references Carmel and its relationship to Indianapolis, I can't help myself from thinking everything written is analogous to Summerlin and Las Vegas, the city where I currently reside. It's scary to think how many other suburbs and cities across the nation where you could draw similar parallels.
nostrademons 8y ago
The data in the "Lost in Place" report that the first point references seems questionable. I spot-checked a couple municipalities I had firsthand experience with (Boston, San Francisco, and San Jose). The worst "fallen star" census tract was the Boston Harbor Islands, which ostensibly has gone from 9% poverty to 82% poverty over the last 40 years. However, this is largely because most existing private uses for the islands have been discontinued, such that the largest complex on them is a sewage treatment plant on Deer Island and a homeless shelter & public services complex on Long Island. When most of a census tract of 1500 becomes a national park and the only thing left is public housing for the homeless, of course the poverty rate is going up. Similarly, the only "fallen star" in San Francisco was the area around SFSU. If most of the population in a census tract consists of college students without an income, of course the poverty rate is going up. That isn't actually reflective of poverty as we know it, though, because it just so happens those districts include people who are spending hundreds of thousands for a credential that will hopefully let them earn more in the future, and isn't reflective of their lifetime earning potential. Makes me wonder how many of the other "fallen star" neighborhoods the report references consists of colleges, prisons, or other social services.
RickJWagner 8y ago
Wow. I lived in west Indiana in the late 90s, remember Carmel as the 'new In place'. Looks like they're headed for trouble. Bummer. Hope city planners are taking note.
- village-idiot 8y ago
  I'd bet that they aren't.
fallingfrog 8y ago
"Poor neighborhoods subsidize the affluent; it is a ubiquitous condition of the American development pattern" I don't really see that as a positive, more as another symptom of the ongoing pillage and exploitation of America's working class.
- burlesona 8y ago
  Being familiar with Strong Towns I would say the author agrees with you. In general Strong Towns tries to point out that the older and lower income parts of town typically produce a substantial tax surplus while the newer and higher income parts of town are a substantial tax drain. This is because, while each individual homeowner may pay more in property tax, they live in much less density and newer infrastructure is usually a lot more expensive (due to increased engineering requirements, ie. more pavement, fancy street lights, etc.) -- so there are fewer people paying for much more expensive infrastructure. This is obviously unjust, and the organization is trying to help bring awareness to the problem to help create a movement for change.
  - deleted 8y ago
    [deleted]
- TheCoelacanth 8y ago
  I would be surprised if the author didn't agree with you (though they might frame it in very different terms). The same blog recently published an article[1] explicitly advocating for more investment in poor neighborhoods. [1] https://www.strongtowns.org/journal/2017/1/10/poor-neighborhoods-make-the-best-investment https://www.strongtowns.org/journal/2017/1/10/poor-neighborh...
purplezooey 8y ago
Detroit has an excuse, it follows the auto industry's fate. Indiana just elects too many republicans.
maxsilver 8y ago
The ironic thing here, is that Carmel Indiana debt is so high in large part because it followed StrongTowns requests. StrongTowns is constantly telling everyone "you should densify" and "you should slow down / tear up all of your streets" and "chase growth / YIMBY everything" and "hyper-invest in Downtown, only dense neighborhoods matter, middle-class housing is a worthless drain on all of society" - https://www.strongtowns.org/journal/2017/1/10/poor-neighborhoods-make-the-best-investment https://www.strongtowns.org/journal/2017/1/10/poor-neighborh... So Carmel does all of that, tearing out intersections for roundabouts, creating bike lanes and dedicated paths, densifying everything, and more-or-less following exactly what StrongTowns is constantly recommending. But it turns out actually following the StrongTowns wishlist is really expensive, far more expensive than not doing any of it. Now StrongTowns wants to complain that Carmel has a high debt load. If they think that debt isn't worth it, they should stop telling cities to do all of this StrongTowns stuff in the first place. --- The blog even complains that Carmel built "a New Urbanist downtown out of thin air", but does not acknowledge that this exists precisely because StrongTowns demanded it. StrongTowns is one of many New Urbanist groups making those sorts of demands on cities in the first place.
- thescriptkiddie 8y ago
  Strong Towns preaches incremental development. Building anything "out of thin air" is basically antithetical that that.
  - deleted 8y ago
    [deleted]
  - bufordsharkley 8y ago
    And to finance things sensibly based upon real revenue flows, not speculative debt drawing on wishful thoughts about future growth.
  - Spooky23 8y ago
    Sounds like the no true Scotsman approach to urban planning.
PeterStuer 8y ago
2 things that bother me in this article: misconceptions about the nature of finance, and the role of real-estate brokers The first one is illustrated in the 'hyperloop affordability' paragraph. What bothers me here it the confusion about the nature of fiat currency. In fiat currency based financial system, money is not realy a resource in the true sense. You don't need 'work' (in the energy sense) to create it. One push off a button can create limitless amounts of it. Money is 'merely' a means of prioritization. This is a subtle but essential difference. You can 'afford' something if you have the knowledge and the free (prioritized) energy (work) to invest in (choose to do) it. In classic balanced systems, where money and 'potential work energy' are in balance, the difference is small. In our real world financial system, where this is nowhere near close, both are very different. The second thing that bothers me is the lack of highlighting the active role of real estate brokers and speculators on the dynamics of rising and falling 'neighborhoods'. These businesses live of fractional transaction fees. Some real-estate is highly profitable as it generates a lot of transactions. A good-looking but 'bad' house where people often find out it is not so nice to live there and move on asap is a start in the realtor market. It generates potential transaction fees on the sale every few years. By contrast, a truly good home is sold on the market maybe once every 2 or 3 generations if ever. The only way to 'unlock' these houses is to take away their 'goodness'. Small things can be leveraged into high market dynamics. Typical things are lobbying local authorities to divert go-through traffic. Once peaceful and nice neighborhoods now become polluted and noisy, often resulting in a mass exodus by those that can afford it. Previous traffic hellholes that could be bought up for pennies suddenly become nice, relaxed and very desirable. A decade or 2-3 later you reverse the process and hit the jackpot again. Another trick is to buy a house on a nice street, and rent it out to a toxic person/family and let the butterfly effect do it's work. Not nice, but unfortunately very effective
- titzer 8y ago
  The point about transaction fees sound tru-ish...but do you have any evidence to support any of the above?
doombolt 8y ago
Big-screen TVs start from $150 these days so I think they should not be mentioned as splurge wealth anymore.
- robotnixon 8y ago
  The "brand new car" thing isn't a great example either. You can lease a new car for under $100/month which likely has lower insurance costs, is safer, and no maintenance fees other than gas (which you'll also need less of since its probably a more efficient vehicle). An older car could end up needing several thousands of dollars in repair costs at any time, and maybe more than once. I drive an older car because I could swing a new engine or transmission if it came up. For a lot of people that means they no longer have a car.
  - SilasX 8y ago
    Fair enough, but in context, I think the "brand new car" reference implied a high-end new car.
  - jstarfish 8y ago
    > The "brand new car" thing isn't a great example either. You can lease a new car for under $100/month which likely has lower insurance costs, is safer, and no maintenance fees other than gas (which you'll also need less of since its probably a more efficient vehicle). Few people (like yourself) buy commodities in increments limited by their needs. Most people buy commodities limited only by their total borrowing capacity. The unofficial Theory of Consumer Spending holds that "where credit is extended, it will inevitably be utilized." It's no coincidence retail chains push their own credit cards. Offered a $300K loan, people will buy a $300K house. Most consumers are ignorant of terms. If the possibility exists to literally sign a dotted line and drive away in a new Range Rover, few people will opt for your plebeian Accord.
- village-idiot 8y ago
  Missing the forest for the trees.

261 points by oftenwrong 8y ago

It is very, very easy to spend money; and if you have any, there are about seven billion people who want you to spend it.

golemiprague 8y ago

I don't understand what's the point of this article, people want to go to a good neighbourhood so their kids will be able to be in a good environment with other kids who are same as them. It is not an investment property, it is investment in the next generation. If the value is kept for the next 30 years it is perfect, after that the kids are out and the parents can move to some other place.

mushufasa 8y ago

tldr: a) city population density outweighs most other factors at producing overall prosperity. b) suburban development is a bad roi for public financing c) therefore, a lot of seemingly affluent areas (think gated communities) are actually going to ruin, because the roi on public financing can't keep them affluent. the article is interesting, but light on quantitative analysis. you're supposed to accept that the author ran the numbers. in particular, i doubt that misallocated public financing is the main reason for a city to grow or shrink. the global economy is too strong. there could even be reverse causation -- all the best urban planners left cleveland as it shrank, which resulted in waste...

bilbo0s 8y ago
"...all the best urban planners left cleveland as it shrank, which resulted in waste..." ??? But if they all left Cleveland, wasn't that because the places they moved to were more desirable for whatever reason? And if those other places were more desirable, doesn't that imply that they missed something in their planning? (Or else they would have done the planning to make their own place that desirable.) Serious question BTW. I'm not trying to be snarky.
- mushufasa 8y ago
  the article suggests that bad urban planning can cause a city to shrink. reverse causation would be that cities which shrink result in bad urban planning. the mechanism for the reverse causation could be that the best urban planners may choose to work in cities with promising growth. or, that shrinking makes urban planning too unpredictable to be effective. you seem to be assuming that urban planners cause a city to be desirable or not. I'm not so sure planners have as much influence, versus, say, trade/resources/industries. point being, i don't think the causal mechanisms on this are clear.
- dragonwriter 8y ago
  > But if they all left Cleveland, wasn't isn't that because the places they moved to were more desirable for whatever reason? Yes, for instance, jobs for urban planners, which are both more plentiful and better paying in growing (both population and economy) areas. > And if those other places were more desirable, doesn't that imply that they missed something in their planning? No, in the same way that an investment planner that experiences a known risk that would have been more likely under alternative courses, or who underperforms other portfolios that benefited from access to investments only made selectively available to people who owned particular investments before that advisor came onboard have not necessarily missed anything. Unavoidable risk and opportunities constrained by initial conditions definitely affect urban planning.
pchristensen 8y ago
The author has run the numbers (or at least found and cited them) - see e.g. https://www.strongtowns.org/journal/2018/5/7/the-more-we-build-the-poorer-we-get https://www.strongtowns.org/journal/2018/5/7/the-more-we-bui... and https://www.strongtowns.org/journal/2018/7/20/mapping-the-effects-of-californias-prop-13 https://www.strongtowns.org/journal/2018/7/20/mapping-the-ef... It's true that the global economy is the biggest factor in a city's prosperity, but a strong economy is only papering over the fiscally unsustainable way most municipalities are run. Also, generally, urban planners are the technicians that implement decisions made by elected officials. They are NOT the ones setting the vision for a city. [citation: Masters in Urban Planning that I never used]
- aidenn0 8y ago
  Many articles on the site have numbers so I'm curious why you chose the first one; it has exactly 1 number, and a graph that looks illustrative rather than empirical. Second article definitely has data in the graphs (as does TFA, for that matter).
TangoTrotFox 8y ago
Doesn't this seem to be conflating correlation with causation? A sign of a wealthier than average household is a beamer in the drive way. That does not mean that buying a beamer is a a good way to get rich, quite the opposite in fact. Areas that are 'overall prosperous' are going to tend to drive economic migration. As a city's area for development tends to be limited this is going to drive population densities upward, as compared to areas that are not economically desirable. San Francisco is a great example, all the way back to its beginnings. San Francisco was practically created by the California gold rush. At the start of 1848 its population was around 1,000. By the end of 1849, it's population was 25,000. By 1890 it's population was 300,000 and it was the 8th largest city in the US. By 1906 the population was more than 400,000. Things then got shaken up by the quake of 1906. But the whole point is that as its population increased 40,000% in about 5 decades, you'd have seen population densities skyrocket. But the city didn't become prosperous because the population density increased. Its prosperity caused the density increases.
- SilasX 8y ago
  >Doesn't this seem to be conflating correlation with causation? A sign of a wealthier than average household is a beamer in the drive way. That does not mean that buying a beamer is a a good way to get rich, quite the opposite in fact. Yep. And most economic policy is based on exactly this fallacy: "When 'the economy' is prosperous, people are buying a lot. Therefore, if we artificially stimulate the economy, we will get prosperity in the relevant, desired sense."
  - yongjik 8y ago
    That's not a fallacy. If a lot of people start to buy a lot, more jobs are created. You are trying to take the case of a single household (where "buying a lot" can only mean using a lot of money) and apply that to the whole society.
    - SilasX 8y ago
      You just bought into the fallacy -- jobs (and buying stuff) are only good when they're satisfying a legit demand, not one artificially created by the stimulus policy. To the extent that that the desire to provide that job or purchase that item is artificial, the "prosperity" indicated by that action is likewise artificial. If I put a gun to your head and forced you to buy a sofa, that's not the same kind of prosperity as when you independently judged that you needed a sofa and freely bought one. The same basic dynamic is going on when I conceal it slightly by forcing other people to give me money so I can subsidize your sofa purchase.
village-idiot 8y ago
One of the points the author makes is that a lot of American communities are not financially robust. If the global economy hiccups, they won’t be able to handle it and might go bankrupt.

acchow 8y ago

"I have all this nice stuff, so obviously I was able to afford it. And because I was able to afford it, it's not a problem that I have it. Nothing to worry about." Did they just make this up? What proportion of people actually think like this? I think normally you look at your salary (or bank balance) to see how "rich" you are.

Johnny555 8y ago
I think there are a lot of people like that. I've visited homes of plenty of acquaintances that, based on their jobs, earn less money than me, but live a much more luxurious life - for example, a 2700 square foot 4 bedroom 5 bath home, $5000 viking stove (how do I know it was a $5K stove? They were sure to let me know: "Gosh, $5,000 for this stove and it still burns the eggs!"), BMW car for him, BMW SUV for her, private school for the kids (despite paying a premium to live in a desirable public school district). It's possible that they have some alternate source of income, but still I wonder how they can afford all of that luxury. I think there are more people that look at the equity in their home to see how rich they are than look in their bank account.
- ChuckMcM 8y ago
  This was something that surprised me too. Looking at how someone lived and expecting them to be wealthy, only to find out later that they had no savings for retirement, and selling off property to get out from under leases or mortgages.
- awvcs 8y ago
  I think what has happened is that post war we have defined success as having it better than our parents. Which isn't necessarily incorrect, though ways of measuring that can be. Starting in the '80s people have been making a lot of money in things like real estate and the stock market, while the price of access to opportunities like education and job markets have increased. If you weren't part of the former group, you have essentially been left behind. At the same time wealth, or inequity, isn't something a lot of people talk about openly. So you are left either accepting your place in the world or you can pretend that you have success by going into debt and hoping for the best. That is that the market continues to be on your side. Some people might even think this is the normal thing to do, not realizing other people have family wealth. Some people realize what is going on, but thinks that it is worth trying anyway. Or they could be those people with family wealth.

dexwiz 8y ago

I find it hilarious Carmel, Indiana is featured so heavily in this article without mentioning Roundabouts. I grew up near Carmel, and it was famous for its Roundabouts. They have replaced almost every 4 Way Stop with a roundabout. I believe they have more Roundabouts than any other town in the US. They have gone so far as to replace classic overpass bridges over the two major highways with Cassini Oval shaped Roundabouts. http://carmel.in.gov/department-services/engineering/roundabouts http://carmel.in.gov/department-services/engineering/roundab...

Johnny555 8y ago
I think they did mention them, just not by name since whether a road project is a roundabout or some other intersection isn't really relevant: The city has gone on an above-and-beyond municipal spending spree in recent years—road projects...
- drharby 8y ago
  Wouldnt be surprised if mafia was involved
  - mikestew 8y ago
    It has nothing to do with the mafia, and everything to do with Carmel's long-time self-esteem problem. The only people that insist on pronouncing the town's name like the one in California are Carmel residents. The rest of the world pronounces it "KAR-mel". Or, more snidely, "CarMEL-by-the-Interstate". It was particularly hilarious that residents like to think of Carmel as where the rich people live (it's really where the upper middle-class live), and then I moved to Redmond and saw how real rich people lived. :-) I haven't lived near Indianapolis in twenty years, but I don't imagine it's changed much. In which case public spending is probably motivated more by keeping up appearances, just like with Carmel's citizens, than it is about corruption.
dagoat 8y ago
So does traffic move smoothly now?

Shivetya 8y ago

funny thing about Georgia, or metro Atlanta that is. We just completed the new Northwest Corridor Express Lanes, 30 miles of elevated reversible toll lanes for a whopping eight hundred and thirty four million dollars. however with regards to the story, Atlanta has its issues with old and needing of repair infrastructure but mostly this comes about because politicians love to cut a ribbon and money goes to new and expensive projects while maintenance gets deferred. This is very evident in heavy rail metro transit systems across the country where it is estimated that over a hundred billion dollars has been deferred. however the real bomb coming is the public employee pension funds running out of money, from police to fire to teachers to city employees. Chicago has a time bomb set to go off in just a few years [1] and if we thought infrastructure costs were killer wait till the pensions collapse, here is a hint : worn out sewers and bridges won't sue you. Already more than a few cities and counties have filed bankruptcy because of these costs. rich neighborhoods want more and more services but when the bill finally comes due it is only then that they realize the true cost of that folly. it easy to live on deferred payment plans until it comes due [1] https://chicagocitywire.com/stories/511130434-projection-chicago-s-police-pension-fund-will-be-broke-in-2021 https://chicagocitywire.com/stories/511130434-projection-chi...

citythrow23 8y ago
From the perspective of a buyer, this leads to the opposite conclusion of the article: instead of buying an in older neighborhood that has held on to its property value but racked up pension debt, buy in a brand new neighborhood that may decrease in property value but has no pension debt and new infrastructure. From the perspective of society at large, both are pretty bad. The bet for newer suburban home buyers is that you can buy the home, raise kids for 20-30 years in the good schools that use the new home values as a barrier to entry, sell it without a major loss, and then move somewhere cheaper and older before the home or the home's surroundings deteriorate.
- leetcrew 8y ago
  > then move somewhere cheaper and older before the home or the home's surroundings deteriorate sure, if you know exactly when this will happen. but if you know, other people probably know, and they won't pay as much for your house.

iammiles 8y ago

Although the article references Carmel and its relationship to Indianapolis, I can't help myself from thinking everything written is analogous to Summerlin and Las Vegas, the city where I currently reside. It's scary to think how many other suburbs and cities across the nation where you could draw similar parallels.

nostrademons 8y ago

The data in the "Lost in Place" report that the first point references seems questionable. I spot-checked a couple municipalities I had firsthand experience with (Boston, San Francisco, and San Jose). The worst "fallen star" census tract was the Boston Harbor Islands, which ostensibly has gone from 9% poverty to 82% poverty over the last 40 years. However, this is largely because most existing private uses for the islands have been discontinued, such that the largest complex on them is a sewage treatment plant on Deer Island and a homeless shelter & public services complex on Long Island. When most of a census tract of 1500 becomes a national park and the only thing left is public housing for the homeless, of course the poverty rate is going up. Similarly, the only "fallen star" in San Francisco was the area around SFSU. If most of the population in a census tract consists of college students without an income, of course the poverty rate is going up. That isn't actually reflective of poverty as we know it, though, because it just so happens those districts include people who are spending hundreds of thousands for a credential that will hopefully let them earn more in the future, and isn't reflective of their lifetime earning potential. Makes me wonder how many of the other "fallen star" neighborhoods the report references consists of colleges, prisons, or other social services.

RickJWagner 8y ago

Wow. I lived in west Indiana in the late 90s, remember Carmel as the 'new In place'. Looks like they're headed for trouble. Bummer. Hope city planners are taking note.

village-idiot 8y ago
I'd bet that they aren't.

fallingfrog 8y ago

"Poor neighborhoods subsidize the affluent; it is a ubiquitous condition of the American development pattern" I don't really see that as a positive, more as another symptom of the ongoing pillage and exploitation of America's working class.

burlesona 8y ago
Being familiar with Strong Towns I would say the author agrees with you. In general Strong Towns tries to point out that the older and lower income parts of town typically produce a substantial tax surplus while the newer and higher income parts of town are a substantial tax drain. This is because, while each individual homeowner may pay more in property tax, they live in much less density and newer infrastructure is usually a lot more expensive (due to increased engineering requirements, ie. more pavement, fancy street lights, etc.) -- so there are fewer people paying for much more expensive infrastructure. This is obviously unjust, and the organization is trying to help bring awareness to the problem to help create a movement for change.
- deleted 8y ago
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TheCoelacanth 8y ago
I would be surprised if the author didn't agree with you (though they might frame it in very different terms). The same blog recently published an article[1] explicitly advocating for more investment in poor neighborhoods. [1] https://www.strongtowns.org/journal/2017/1/10/poor-neighborhoods-make-the-best-investment https://www.strongtowns.org/journal/2017/1/10/poor-neighborh...

purplezooey 8y ago

Detroit has an excuse, it follows the auto industry's fate. Indiana just elects too many republicans.

maxsilver 8y ago

The ironic thing here, is that Carmel Indiana debt is so high in large part because it followed StrongTowns requests. StrongTowns is constantly telling everyone "you should densify" and "you should slow down / tear up all of your streets" and "chase growth / YIMBY everything" and "hyper-invest in Downtown, only dense neighborhoods matter, middle-class housing is a worthless drain on all of society" - https://www.strongtowns.org/journal/2017/1/10/poor-neighborhoods-make-the-best-investment https://www.strongtowns.org/journal/2017/1/10/poor-neighborh... So Carmel does all of that, tearing out intersections for roundabouts, creating bike lanes and dedicated paths, densifying everything, and more-or-less following exactly what StrongTowns is constantly recommending. But it turns out actually following the StrongTowns wishlist is really expensive, far more expensive than not doing any of it. Now StrongTowns wants to complain that Carmel has a high debt load. If they think that debt isn't worth it, they should stop telling cities to do all of this StrongTowns stuff in the first place. --- The blog even complains that Carmel built "a New Urbanist downtown out of thin air", but does not acknowledge that this exists precisely because StrongTowns demanded it. StrongTowns is one of many New Urbanist groups making those sorts of demands on cities in the first place.

thescriptkiddie 8y ago
Strong Towns preaches incremental development. Building anything "out of thin air" is basically antithetical that that.
- deleted 8y ago
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- bufordsharkley 8y ago
  And to finance things sensibly based upon real revenue flows, not speculative debt drawing on wishful thoughts about future growth.
- Spooky23 8y ago
  Sounds like the no true Scotsman approach to urban planning.

PeterStuer 8y ago

2 things that bother me in this article: misconceptions about the nature of finance, and the role of real-estate brokers The first one is illustrated in the 'hyperloop affordability' paragraph. What bothers me here it the confusion about the nature of fiat currency. In fiat currency based financial system, money is not realy a resource in the true sense. You don't need 'work' (in the energy sense) to create it. One push off a button can create limitless amounts of it. Money is 'merely' a means of prioritization. This is a subtle but essential difference. You can 'afford' something if you have the knowledge and the free (prioritized) energy (work) to invest in (choose to do) it. In classic balanced systems, where money and 'potential work energy' are in balance, the difference is small. In our real world financial system, where this is nowhere near close, both are very different. The second thing that bothers me is the lack of highlighting the active role of real estate brokers and speculators on the dynamics of rising and falling 'neighborhoods'. These businesses live of fractional transaction fees. Some real-estate is highly profitable as it generates a lot of transactions. A good-looking but 'bad' house where people often find out it is not so nice to live there and move on asap is a start in the realtor market. It generates potential transaction fees on the sale every few years. By contrast, a truly good home is sold on the market maybe once every 2 or 3 generations if ever. The only way to 'unlock' these houses is to take away their 'goodness'. Small things can be leveraged into high market dynamics. Typical things are lobbying local authorities to divert go-through traffic. Once peaceful and nice neighborhoods now become polluted and noisy, often resulting in a mass exodus by those that can afford it. Previous traffic hellholes that could be bought up for pennies suddenly become nice, relaxed and very desirable. A decade or 2-3 later you reverse the process and hit the jackpot again. Another trick is to buy a house on a nice street, and rent it out to a toxic person/family and let the butterfly effect do it's work. Not nice, but unfortunately very effective

titzer 8y ago
The point about transaction fees sound tru-ish...but do you have any evidence to support any of the above?

doombolt 8y ago

Big-screen TVs start from $150 these days so I think they should not be mentioned as splurge wealth anymore.

robotnixon 8y ago
The "brand new car" thing isn't a great example either. You can lease a new car for under $100/month which likely has lower insurance costs, is safer, and no maintenance fees other than gas (which you'll also need less of since its probably a more efficient vehicle). An older car could end up needing several thousands of dollars in repair costs at any time, and maybe more than once. I drive an older car because I could swing a new engine or transmission if it came up. For a lot of people that means they no longer have a car.
- SilasX 8y ago
  Fair enough, but in context, I think the "brand new car" reference implied a high-end new car.
- jstarfish 8y ago
  > The "brand new car" thing isn't a great example either. You can lease a new car for under $100/month which likely has lower insurance costs, is safer, and no maintenance fees other than gas (which you'll also need less of since its probably a more efficient vehicle). Few people (like yourself) buy commodities in increments limited by their needs. Most people buy commodities limited only by their total borrowing capacity. The unofficial Theory of Consumer Spending holds that "where credit is extended, it will inevitably be utilized." It's no coincidence retail chains push their own credit cards. Offered a $300K loan, people will buy a $300K house. Most consumers are ignorant of terms. If the possibility exists to literally sign a dotted line and drive away in a new Range Rover, few people will opt for your plebeian Accord.
village-idiot 8y ago
Missing the forest for the trees.