44 ms·

Why Does Infrastructure Cost So Much?

189 points by jseliger 7y ago

ralusek 7y ago
This is, IMO, a terrible article that doesn't even begin to discuss any of the reasons why infrastructure in the US costs so much.
- enraged_camel 7y ago
  What are those reasons?
  - jcranmer 7y ago
    Some of the theories I've heard are (I don't necessarily agree with all of these): * Higher intrinsic costs (i.e., labor costs, eminent domain costs, litigation costs) * Outright corruption (this one in particular I'd disagree with for US costs, but I have heard people discuss it). * Price gouging, either via corporate cost-plus contracts raking in money, or via union featherbedding, or some other way in which a lot of money within the contracts are for things that don't really serve any "legitimate" purpose. * Political consideration forcing all projects to become "megaprojects" that are prone to sunk cost fallacies or scope creep and are not amenable to effective cost-control. * Antigovernment trends shifting design and engineering work from public agencies, causing the agencies to be unable to effectively manage the construction of projects.
- Ilverin 7y ago
  Where is a better article? The cost of infrastructure is extremely complicated. People who are experts in construction financing are busy making good money rather than writing articles or donating time to journalists. (and construction/construction finance experts are usually only experts in a specific subfield) http://nymag.com/intelligencer/2019/07/why-we-cant-figure-out-why-infrastructure-is-so-expensive.html http://nymag.com/intelligencer/2019/07/why-we-cant-figure-ou...
  - darawk 7y ago
    https://slatestarcodex.com/2017/02/09/considerations-on-cost-disease/ https://slatestarcodex.com/2017/02/09/considerations-on-cost... This is a pretty good article, along with his response to comments: https://slatestarcodex.com/2017/02/17/highlights-from-the-comments-on-cost-disease/ https://slatestarcodex.com/2017/02/17/highlights-from-the-co...
    - Ilverin 7y ago
      That is a good article for explaining why costs have gone up in most countries, like they have in France and Spain. It's less good at explaining the vast outlier (larger outlier on cost than gdp) that is US construction costs.
- Mvhsz 7y ago
  I think the headline for this article is unfortunate. The article didn't focus on answering the headline in the way most readers will expect, but those who have read more of Chuck Marohn's writing probably won't expect it to. It's really about "Why Does Infrastructure Cost So Much?" being a common concern but missing the point. He points out that bad development patterns and misguided regulations lead to roads that aren't economically productive enough to pay for their own maintenance, and that reducing the actual construction costs isn't going to change that paradigm. This probably shouldn't be the first article anyone reads on strong towns, as it jumps to conclusions that are justified in earlier writings.
  - HillaryBriss 7y ago
    I believe this article's best explanation of its solution is: My approach ... is for local governments and local communities of people to assert leadership, to take active steps to make their places stronger, healthier, and more prosperous, so that—regardless of what happens with the state and federal economies—our cities evolve to become better places to live. It seems to me that could mean a whole lot of different things, or maybe nothing at all. It's not really specific advice. IDK. Maybe the book has the details.
- dkhenry 7y ago
  The article gives two reasons. The first starts in the paragraph that begins with The first underlying driver of U.S. infrastructure costs is that the U.S. has felt so rich as a country that, for decades, we spent freely on infrastructure and never asked serious questions about the return on that investment And then lists some of the things we spend freely on that aren't really necessary. The second reason is The second underlying driver of U.S. infrastructure costs is how deeply embedded infrastructure spending is within our model of economic growth. both of those essentially boil down to we spend so much because the market is set up to encourage us to spend a lot. Probably not the answer you were looking for, but at the end of the day we spend so much money because we have set up the market to enable high prices.
  - someguydave 7y ago
    The underlying factor really is that the people in charge of spending infrastructure money are not really incentivized to be careful or ask tough questions about how it is being spent. Furthermore, they are often bound by piles of regulations and restrictions on their freedom for contracting the work, so they also lack agency.
    - IfOnlyYouKnew 7y ago
      Yeah, that's just the old and cynical "everyone-is-corrupt" talking-point. It fails rather obviously because (a) the article is comparing costs across countries, and other countries haven't found some magic system to increase accountability of politicians and beaurocrats that goes beyond not re-electing them. And, (b), there are plenty of incentives for decision-makers to keep costs down. Don't you think the governor or Mayor of New York would crow endlessly if they managed to build subway <x> or tunnel <y> for a fraction of the usual costs? Have you noticed how California's high-speed rail project and its cost overruns have been terrible for three governors in a row?
      - liability 7y ago
        Whether anybody is practicing witchcraft or any other form of magic is beyond the point; it should be obvious to anybody who's not totally naive that some countries have more corruption than others.
- defterGoose 7y ago
  Ok. But why?
- topspin 7y ago
  For me it has become habit to read comments about articles before actually reading the articles. The deliberate miss-titling of stories to sucker in readers is now commonplace and I appreciate when I'm afforded a chance to avoid it. Here we're allowed to believe the story might investigate why building infrastructure in the US costs several multiples of what other countries pay, or what the US used to pay for the same result. Instead what appears is yet another naval-gaze about the evils of roads, cars and suburbs.
- projektfu 7y ago
  There was a specific example that is indicative of why it costs so much here. He said, hypothetically, that a road project may have to purchase 5 additional feet of land for the right of way in order to meet some standard like 12 foot lanes, doing this without thinking at all. That 5 feet may not have been needed if you sized the project to 11 foot lanes, but now it must be purchased from a variety of landowners, and each one knows that they can hold out for top dollar. And it's probably low-value land to them anyway if you're building a 5-lane road through it. This sort of thinking gets in the way of a lot of projects. I read at the time that Acela was proposed as a 180mph train, but the difficulty acquiring and building more right of way to smooth out turns, and the requirements for heavier parts to meet some safety regulations, meant that it could not approximate the speed of TGV. Instead, it goes 150 on some relatively straight sections and usually goes somewhat less. The special trainsets also cost more than European HSR trainsets. Why do government software systems cost so much? Many of the same reasons, and as the article points out for infrastructure, the players have a desire to fund big projects and act like they're "done" instead of funding little improvements all the time.
baggy_trough 7y ago
Awful article. The primary reason is that government has very low accountability, so it's ripe for corruption.
hos234 7y ago
He is right in the sense when local bodies have decent leadership good things happen. But who wants to go work in local govt? There lies the problem.
madengr 7y ago
It’s not just infrastructure, or cost. After watching Apollo 11 the other night, I can’t fathom how that was done in 8 years. Also, in the movie, one of the mission controllers looked to be about 70. To think that when we he was born, flight, radio, and computers did not exist. Here he was putting men in the moon. Here I’m, born a couple of years after that, and seems not a damn thing has happened since. Everyone has a piece of shit in their pocket with which they can sext. Call that progress; Truly depressing.
- someguydave 7y ago
  It was done in 8 years because the US was spending 4% of GDP on NASA, which was probably a mistake in retrospect. The other reason is that it was a greenfield project with competent management, generally.
  - melling 7y ago
    Has anyone done a good analysis of this? It can probably be argued many ways. The program did cost much less than the Vietnam War, and did pay off in future dividends. The war not so much. https://thevietnamwar.info/how-much-vietnam-war-cost/ https://thevietnamwar.info/how-much-vietnam-war-cost/
    - wongarsu 7y ago
      Also the Moon landing was at least as much defense spending as it was science spending. The Soviets derived a lot of national pride from holding all the major space achievements and beating them had great propaganda value. Also without knowing how useful the moon would be it was deemed unacceptable to risk the Soviets gaining a foothold, exploiting all its resources and defending it as their territory.
      - someguydave 7y ago
        Doesn’t that sound kind of whacky in retrospect?
    - 7y ago
situational87 7y ago
It's really bizarre to complain about how roads cost "too much" when we are now spending $1 Trillion per year on stock buybacks. A few executives and directors (who are already the richest humans that have ever lived) are adding orders of magnitude to their hoards with these massive buybacks. Google just broke records by announcing an unprecedented $25B in buybacks for this quarter. Over the same time period they are spending $6.2B for all of research & development. Expect these buyback numbers to grow wildly in the coming years. How much does a bridge cost again?
- navigatesol 7y ago
  >A few executives and directors (who are already the richest humans that have ever lived) are adding orders of magnitude to their hoards with these massive buybacks. First of all, it isn't "we". This is not public money. It belongs to the shareholders, and buybacks are one way to return the money (tax efficiently). Why should it be horded by the company? If there is nowhere to invest, give it back to the owners to spend or invest as they see fit. Second, buybacks don't magically raise the share price. The number of shares outstanding decreases, but so does the cash on the balance sheet. There is plenty of literature on stock buybacks and how they work, you simply need to look beyond the populist headlines.
  - ceejayoz 7y ago
    > First of all, it isn't "we". This is not public money. You could argue it should have been. https://www.bloomberg.com/news/articles/2019-01-16/here-s-how-u-s-businesses-actually-used-their-tax-cuts https://www.bloomberg.com/news/articles/2019-01-16/here-s-ho... > On Jan. 1, 2018, the biggest, most sweeping U.S. corporate tax cut ever enacted went into effect. A year later, we’re able to see how businesses used all that extra cash. > The short answer: to buy back shares.
    - cameronbrown 7y ago
      Trump's tax cut helped big business, that's true. But for each corporate buyback there were thousands of mom and pop shops that benefited and invested.
DataGata 7y ago
The Strong Towns line is a pretty simple one, and this article simply reiterates on it: Nobody does ROI calculations on infrastructure costs and it will catch up with you sooner or later. It might be compared to technical debt for the HN crowd: you build fast and break things for a couple of decades (post-WW2) and then suddenly you find yourself with an unimaginably complex, catatonic system that can't pay for itself. The interest payments overwhelm the rest of the system. However! That doesn't actually answer the question about why _new_ infrastructure costs so much (surely a new subway line doesn't actually care if half the roads are ten years behind their maintenance schedule).
- whenanother 7y ago
  what these articles lack is the list of costs in a project. there should be law requiring all projects to list all costs in an easily accessible document. we already require this in the medical field and know full well that those 15 dollar bandaid and insurance premiums are the things that drives ip costs.
- maximente 7y ago
  this may just be a part of your analogy, but it doesn't seem like being revenue neutral is a great goal for public infrastructure. that's not to say one should not evaluate the potential of a dollar spent in a metro area of 25million vs. 2500. but it is to say that that metric of revenue neutrality isn't ideal. one could easily imagine a situation where $1 in infra leads to $4 in economic growth, or $1.05 in additional tax revenue, or whatever. but yeah i agree, those are the calculations that need to be done. and yeah it's a bit self reinforcing - rich get richer, economy wise - but this notion that everyone can not pay that much extra yet get their own big ass plot of land, roads and parking spaces - which is what suburbs are, as far as i can tell - isn't sustainable.
- rhizome 7y ago
  It sounds more like snowballing costs as you deal with technical debt by throwing more Heroku at it. It has seemed apparent to me for some time that contractors/developers are pumping costs and milking change orders, with cities going along with it, possibly due to limited numbers of contenders. Similar to healthcare costs being a dance of growth between insurance and medical providers.
someguydave 7y ago
Demand for new infrastructure competes with maintenance of old infrastructure, so decades of overbuilding will eventually exhaust the supply of construction services.* *who are willing to deal with government red tape
- bilbo0s 7y ago
  Around here, it's not inaccurate to state that the construction services are the ones who created the red tape. Politicians and construction firms around here concert to keep a steady stream of money flowing to only designated buckets. So not only are they willing to deal with it, but they would very much protest if it weren't there. I try to keep in mind that it might be for the purposes of creating BS jobs for economic purposes. But here in Wisconsin, and everywhere else too probably, there is definitely a very large element of skimming tax revenue by funneling it to your buddies.
  - secabeen 7y ago
    Yeah, bureaucratic red tape often becomes part of the economic moat protecting the incumbent providers from competition.
  - heymijo 7y ago
    I wish everyone had the knowledge of The Power Broker by Robert Caro in their heads. It's a mammoth book, mainly talks about early 20th century NYC development, but my god is it enlightening into how infrastructure got built.
- gamblor956 7y ago
  Demand for new infrastructure competes with maintenance of old infrastructure, so decades of overbuilding will eventually exhaust the supply of construction services. I know your statement is hyperbole, but this is a completely wrong understanding of how public-financed construction projects work, and the market for them, and other people are taking it for face value. For starters, demand for new infrastructure at the public level generally requires replacing existing/old infrastructure. This is frequently because decades-old infrastructure was built to older/weaker standards and would need to be upgraded to newer standards, and the upgrade would cost as much or more than simply demolishing and rebuilding brand new. Also, there is no such thing as a shortage of construction contractors willing to deal with government red tape. The government is the best client: it always pays on time, and it usually pays more than the face value of the original contract.
danans 7y ago
> If we made the assembly of steel, concrete, and asphalt cheaper, do you think suburban mayors would stop demanding we build them big box interchanges? I generally agree with many of Strong Towns' arguments, but this really seems to miss the mark. The reason why major infrastructure projects like regional/urban rail systems, tunnels, etc are so expensive vs other developed countries isn't due to the cost of commodities like concrete or steel. It's due to the lack of sufficient domestic expertise in designing, managing, and building such large scale works. Because we don't build that scale of project frequently in the US, when we do it, we don't do it as efficiently. A recent example would be the use of the incorrect grade of steel in San Francisco's new Chinatown subway line. OTOH, we have huge amounts of experience building big box stores, parking lots, and freeways, which are the sort of infrastructure that the Strong Towns perspective says (correctly IMO) that we don't need so much of. We need to build infrastructure with higher utilization, which therefore doesn't need to rely on what Strong Towns describes as the Growth Ponzi Scheme, but unfortunately that's exactly the sort of infrastructure that we are not very good at building.
- jdavis703 7y ago
  We also have "Build America" policies that penalize us from bringing in foreign companies with expertise. We have to make a decision, is infrastructure a jobs program for today or an economic investment for tomorrow?
- erentz 7y ago
  Two things this makes me think of. 1. The US has a large NIH attitude and is unwilling to adopt overseas experience or standards. 2. Somehow we have to move away from building infrastructure as stepwise huge mega projects. And start building infrastructure as an ongoing incremental and reliable program into perpetuity. E.g. instead of CAHSR designed largely as a dedicated rail system with huge up front capital costs the benefits of which can’t be felt until it is all spent, set up a state rail agency to consolidate and consistently fund incremental improvements to the rail system, with incremental ROW purchases and improvements that over time reach the really big HSR goals. Imagine for example CAHSRs capital budget of $80 billion but instead going to fund an agency for 30 years that can then hire engineers and project managers and allocate it to its projects that have the best ROI over 30 years. That last one seems to primarily be a political challenge though. Nobody likes state run agencies and everyone loves defunding them.
ghobs91 7y ago
For new infrastructure specifically, it costs a ton in the US because of a combination of non-transparent bidding system from contractors (politicians give their buddies bloated contracts) and construction unions overstaffing construction sites. In other words, taxpayer money is being taken for a ride. For a good example of the latter situation, look up the rampant overtime abuse that's been discovered at the LIRR. There's little incentive to keep costs down and use funds efficiently, because it's tax payer money.
Scoundreller 7y ago
I feel like eBay is like this. Everything is a new front end on top of a new front end. Every once in a while, you’ll get directed toward some ancient looking page designed for 800x600 that’s running everything. Particularly on the account payments side.
- gamblor956 7y ago
  If the accounts payable system is still working and can handle eBay's volume, why spend the money to "upgrade" it? Not everything old needs to be remade anew.
  - elliekelly 7y ago
    I once worked with a company where this line of thinking had infected all of senior management. That’s how they ended up with an “intranet” that consisted of a shared excel workbook with hyperlinks to hundreds of other shared files. But it wasn’t broken, so why spend the money on SharePoint, right?
    - awakeasleep 7y ago
      I'm not being facetious when I say I'd prefer a spreadsheet with links to Sharepoint. At least you can ctrl+f the spreadsheet.
    - asdff 7y ago
      Wow I might start doing that myself for my projects to be honest.
  - oneplane 7y ago
    Because the value of things doesn't boil down to "is it totally broken or sufficient".
  - Scoundreller 7y ago
    It works... barely. Your account can only be in one currency. Want to do some listings in US$, and others in CAD$? No yuo. You can only change between your billing currency every 12 months.
maximente 7y ago
this seems like a natural end to the author's aptly named 'Suburban Experiment'. once these true costs are factored in and some really unpleasant decisions made, it's not unreasonable to think that a lot of smaller tier cities/burbs will fold up due to a cycle of tax increases due to true revenue required => people leave => less tax base => death. but honestly, that seemingly had to happen. the true cost of 'burbs is just way higher than anyone wanted to admit (or tax). the huge overhead of services + spreading them out over massive areas (relative to dense cities) seems to be untenable long term.
- clairity 7y ago
  i'm an urbanist, but even to me, "experiment" sounds needlessly antagonistic. it wasn't an experiment, but rather a deliberate set of decisions to give citizens what they wanted despite the (possibly foreseeable) problems. government subsidization was manageable when out-migration didn't demand the resources it does now, in terms of standards/regulations (roads, drainage, electricity, water, sewage, internet, etc.), process (bureaucracy, legal challenges), graft/corruption, and the sizeable population now in (and moving to) the suburbs/exurbs, all in a robustly growing and more equitable economy. we've since realized that costs go up superlinearly, which makes it a bad use of resources, so instead we advocate denser urban areas, which provide economies of scale on the infrastructure dollar.
- asdff 7y ago
  The suburb where I grew up is like this. The city can't get any tenants for vacant commercial and industrial lots. The school district is loosing enrollment and closing branches. Recently trash and recycling has been privatized. The budget hole cannot be closed because the governor cut funding to municipalities. I think it's starting to hit a bottom though. While there isn't any new construction to speak of, as boomers pass or move a surprising amount of younger families are moving in, probably because houses are only 100-200k. I don't know what the end results look like. More ebb and flow I guess. I will say that this is a middle-middle class suburb; the upper middle class suburb it borders with the excellent school district and an equinox is doing great with homes selling for north of 500k.
Proven 7y ago
Because it's built, managed or organized by the government
heymijo 7y ago
I think infrastructure in some places in the U.S. ends up looking a bit like a ponzi scheme. Example city--Charlotte, NC. Down south in Charlotte there is an area called Ballantyne. Ballantyne has good schools, new everything, etc. Ballantyne also has high taxes. So what do people do? Move 5-10 minutes down the road into South Carolina where there is abundant land. They start developing. More people move in. Schools are built. They fill up. They build new ones. People complain about the old two lane country roads so they are expanded. Taxes go up to support this. Then either people keep playing the move game to a new undeveloped area or the ROI calculation that nobody does on infrastructure catches up with the town. Some can support it, others can't and it's a downward spiral. I'm not sure I've explained this well. I mostly think about this from the human POV, which I didn't even mention above. The rational thing for someone living in the high tax area is to go to the new area as it is developing and everything is new and then to decamp before things go so far downhill that property values drop. Game theory? Tragedy of the Commons? What all is at play here and then as importantly, how do we do better?
- ellius 7y ago
  It's sort of a "Tragedy of Systems." It's very easy for negligent or malicious actors to make bad decisions in a system context, but to have the consequences of those decisions not manifest in the same time or place as where the decision occurred. This makes it really easy to screw things up without suffering the consequences in complex systems, and people often make decisions for their personal benefit ignorant of or willfully ignoring the consequences.
  - heymijo 7y ago
    I like how you phrased that and take it to the system level to think about it. It reminds me of Indianapolis, Cleveland, and their metropolitan areas. In 1969 Indianapolis created a "Unigov" merging with its surrounding county, and all of the suburbs within it.[0] The Unigov concept has been studied a lot. General view is it was a net positive, with one of those benefits being a shared vision, shared tax base, etc. Contrast that with the city of Cleveland and its metropolitan area. The city and its suburbs are distinct places. Suburbs on the east side and west side compete with downtown to give economic incentives to draw businesses away from each other. For example, American Greetings (the card maker) moved its long-time HQ from Brooklyn, Ohio (a Cleveland suburb) to Westlake, Ohio (another Cleveland suburb). Westlake lured American Greetings with incentives that Brooklyn could not match. The net benefit to the region is likely nil, but the benefit to Westlake, and the loss to the other suburb is demonstrable. [0] https://www.cgr.org/consensuscny/docs/CaseStudies_ec-unigov514.pdf https://www.cgr.org/consensuscny/docs/CaseStudies_ec-unigov5...
gok 7y ago
The first part is quite good. Those who could be making infrastructure cheaper have no incentive to do so. The comparison to education and healthcare is spot-on. The second part is a bunch of Malthusian nonsense.
mempko 7y ago
Wait, if we freely spend on infrastructure, and infrastructure assumed to be just a given, then why do we have a D rating on infrastructure by our engineers? Why do we have so much neglect in our infrastructure? Something doesn't make sense here.
robocat 7y ago
Cost-benefit analysis is an engineering solution to a political problem - it seems great but it doesn't solve political issues. In NZ potential changes to the national road system are ranked by cost versus benefit. Only the most beneficial projects are commenced, and low or negative value projects are not funded. Projects must also exceed a minimum benefit vs cost ratio. The political problem is that national infrastructure project spending and lending is seen as overwhelmingly occurring in Auckland. Cost-benefit leads to perceived imbalance because costs are massive in Auckland but the benefits are huge too (a large population, multiplied by large congestion).
- DataGata 7y ago
  Is that a political problem? Surely, a person who lives in rural NZ might think, "Oh, my tax dollars are being used to help those in Auckland; I'm being shafted", but if NZ is anything like the United States, urban centers are the producers of tax units and rural areas consume tax units.
  - robocat 7y ago
    If you don't live in Auckland, your reckon your taxes are being spent in Auckland on expensive roading projects, and you can see that work isn't getting done on your local roading problems. Regardless of how optimal for the nation that might be, or even if everyone is actually better off, you can easily end up with many unhappy people outside of Auckland (a political problem). Edit: strongtowns on cost/benefit analysis (half good, half not): https://www.strongtowns.org/journal/2010/12/21/best-of-blog-costs-and-benefits.html https://www.strongtowns.org/journal/2010/12/21/best-of-blog-...
  - oh_sigh 7y ago
    It's not a straightforward as simple consumption and production of tax units. The question is who benefits? If Alaska consumes a lot of tax units by having an early warning system for ICBMs, then Alaska benefits in the sense that there is a government jobs program, but the simple calculus of tax units consumed vs produced doesn't factor in the benefit San Francisco and Los Angeles get from the early warning system.
javajosh 7y ago
For a long time our culture seemed to produce honest people doing work for an honest wage. They would be reluctant to "charge more than it's worth". There was an element of honor to it, and avoiding the shameful act of gouging your customer. If something takes 2 days to do, and it costs you $30/day to live, then you charge, say $120 - you're not only living, but also you're saving for a rainy day. It's a good thing. Cynical market manipulation has soaked into real world work at every level both public and private. Sociopaths with the balls to ask 10x or 100x the traditional, cost based price have succeeded totally, and have lured workers with 2x or 5x wages, essentially starving any potentially honest competition. It stuffs all the good workers into a profit-maximizing corporation that now has a lot of other priorities that often conflict with "an honest days work for honest pay". The city politicians and admins responsible for actually spending the peoples money are often unable and/or unwilling to actually take responsibility for the projects. Partly this is the moral hazard of spending other people's money; but partly it's passing the buck, not wanting to take on any risk associated with real project execution. The public's awareness is dim and short-lived, so the upside of project success isn't worth the risk. So you hire a firm to hire the firm to do the project, and you have plenty of scapegoats if things go sideways. I don't think successful projects can just happen. You need individuals, visibly, identifiably, running projects, and building reputations. I think it's wrong for a small town's admins to throw money at a big corp to do an infrastructure project, and pay themselves 6-figure salaries to "oversee" it for 10 years, "darn those overruns!" In fact, I think it would be great if infra project competence was second only to running a self-restrained police force as a topic of city elections (the distant third being capability in running other city services well). But from what I've seen American voters only show up if they have strong emotions, and don't know anything about government or the people running to rule them. So, this is what you get.
Balgair 7y ago
I have some family in the large public works business, so I have some persepctive here. Large public works projects are really expensive and take a lot of know-how to get done properly. It's only been since the 70's that we've had the engineering chops to even understand how ground water works around a dam [0] let alone what to do with the older dams. The computer models of how the soil works around the transbay tube duing an earthquake is basically guessing, we just don't have good data. Heck, even with good models and good firms, you still have to just pray that the rain isn't too bad for a few years. One of the main issues is that we just do not have a good idea what the ground/climate is doing over a 50 year timeline here in the US. Look at all the cliff-side houses in Santa Barbara, or the houses along the Mississippi, or the houses in Paradise. As such, it's very hard to insure, plan, and estimate what kinds of tolerances the public works should be built to. To do things properly is basically a guess most of the time. As such, when that gamble fails, the clean-up is really something. [0] https://www.youtube.com/watch?v=0EzoHXEzdwY https://www.youtube.com/watch?v=0EzoHXEzdwY esp. around minute 3.
- thephyber 7y ago
  > or the houses along the Mississippi This one is different from the rest. People have lived along the Mississippi for hundreds of years and the river reliably floods beyond its banks every. single. year. The problem with dwellings along the Mississippi is the "moral hazard" by allowing the US Federal Government to insure these houses without preconditions and never denying a claim, despite the fact that one property has flooded more than 53 times in the last 50 years (claiming on flood insurance every single time). I would argue that it's just not politically sexy to say "I am going to maintain this X" as it is to say "We are going to build this Y". They are the "blocking and tackling", but the voters are in the stands waiting for the quarterback drops back to pass long.
  - jjeaff 7y ago
    If it is flooding that frequently, I wonder if there is any required proof that things were fixed up since the last flood? Seems like the owner is likely just making cheap patches and then waiting for the next flood to collect another payment. Otherwise, I can't imagine anyone wanting to go through that every year.
hackeraccount 7y ago
I tend to think it's lack of competition. The industries that do best in the US are ones that foreign competitors have the easiest ability to compete in. Construction is almost inherently a domestic affair. With efficiencies gained in more competitive the money saved has to go somewhere so it gets spent on construction. Of course a problem with this is that I don't think all forms of infrastructure spending of gone up in price - look at housing; per square foot I don't think the cost has gone up that much.
sword_smith 7y ago
Why do people subscribe to the myth that US infrastructure is bad? I am Danish and was on a road trip from Houston to LA, to Caspar WY, to Denver CO in 2017 and the roads we were driving on were excellent. Better than even the German highways which are some of the best roads in Europe. Is it the construction lobby that wants more funding and creates this narrative?
- Redoubts 7y ago
  If your interest in infrastructure begins and ends with cars, then the USA won't disappoint.
  - Aperocky 7y ago
    TBH that's the American definition of infrastructure anyways.
- osdiab 7y ago
  The utter lack of public transit is my main issue. Even the cities that have some tend to be very unreliable. Though to your point, interstates tend to be pretty good, but but a lot of random cities’ surface streets can be pretty bad, there have been public health scares like the lead contamination in Flint, Michigan, and there was a often cited report by the American Society of Civil Engineers that rated the USA poorly on its infrastructure [1]. [1] https://www.infrastructurereportcard.org/ https://www.infrastructurereportcard.org/
- xeromal 7y ago
  People on Reddit and Hackernews seem to be mostly pessimistic. I agree with you. Yeah, we have potholes in places and old bridges that need repair, but we managed to put roads across the entirety of the US in a 100 years. Most of the shitty roads I've seen in the states are in the cities where there are loads of traffic. I'm not really bothered by it.
bin0 7y ago
Union contractors and brothers-in-law are most of it. I lived in Houston for a while, which is a very large and bureaucratic city. They can't get infrastructure done right. In the area are a few small towns which incorporated before being sucked up by Houston, and are much more efficient. They are called the Villages, and banded together to run their own police, fire, public works, etc. Instead of dealing with stupid unions, they hire normal private contractors and get things done quickly. Get rid of your horrible union agreements, and be more like the Villages.
aussiegreenie 7y ago
But it does not in Europe. America pays about 2-3 times the price per mile for roads and rail than in Germany. Australia pays even higher prices than in America. eg Sydney purchased surplus trams from Spain. The Spanish tram system cost USD 115 million for about 40 km (25 miles) and Sydney has already spent nearly $3 billion (USD 2.1 billion) for about 40 km and it will cost another $500 million before a single tram starts. The project is already years behind schedule.
obelos 7y ago
As another perspective, a recent draft paper[1] notes a correlation between transportation infrastructure costs and how much community involvement there is on the project. TL;DR, infrastructure was way cheaper when we could just bulldoze through neighborhoods and wetlands without meaningful pushback. [1] Brooks, Leah, and Zachary D. Liscow. “Infrastructure Costs.” SSRN Scholarly Paper. Rochester, NY: Social Science Research Network, July 31, 2019. https://papers.ssrn.com/abstract=3428675 https://papers.ssrn.com/abstract=3428675.
magicalhippo 7y ago
Reminded me of my mom's place. They've got a multi-year project to dig up the road, replacing main water pipe and other stuff, so whole road is closed off for a few miles. So far in 2019, my mom (who's a pensioner) and me have only seen people working there during weekends or after five in the evening. Mostly sporadically, nothing for a week, then a small group on Sunday afternoon, then nothing again. Meanwhile all those construction vehicles and tools are just sitting around. Somehow these guys ended up being the lowest bidders.
dbg31415 7y ago
Digging costs a lot of money. https://arstechnica.com/tech-policy/2018/03/dig-once-rule-requiring-fiber-deployment-is-finally-set-to-become-us-law/ https://arstechnica.com/tech-policy/2018/03/dig-once-rule-re...
rayiner 7y ago
Environmental regulations. The average infrastructure project in the US spends 4.6 years in environmental review, which provides rich opportunities for NIMBYs to block the project. The purple line in Maryland, a 16 mile long above ground light rail line through the DC suburbs, is so plagued by litigation, it will cost almost twice as much as Copenhagen’s massive new subway expansion (27 miles of tunnel under downtown Copenhagen).
viburnum 7y ago
I see a lot of comments here are missing the point. America just has too much infrastructure (roads for cars), spread way too thin. Walkable, bikeable neighborhoods require much less in the way of paving, highways, interchanges, etc. It's way cheaper to invest in places for people than it is to try to solve every problem with more concrete.
massysett 7y ago
Health care is expensive. Infrastructure is expensive. Education is expensive. What all these things have in common is that they are labor intensive and must be performed with American labor—and well-trained American labor at that. American labor is expensive because we’re a rich country. So it’s absolutely no surprise these things would be expensive, and not much we can do about it. At least that’s become my theory and it’s so obvious to me that I don’t know why it hasn’t been analyzed that way.
ryanthedev 7y ago
Bad code
randyrand 7y ago
Do the numbers support this conclusion? Because without numbers this seems like complete conjecture. What a waste of time reading this article.
tabtab 7y ago
The costs probably went up for the same reason healthcare, education, and rent/housing* costs have gone up relative to inflation: they have not been able to take significant advantage of automation and outsourcing like most everything else has. It's one of the high-hanging fruits of automation and outsourcing. (I'm not putting a general value judgment on overseas outsourcing here, only saying that it lowered prices.) * You can't make land in a factory, barring a collision with Mars.

189 points by jseliger 7y ago

This is, IMO, a terrible article that doesn't even begin to discuss any of the reasons why infrastructure in the US costs so much.

enraged_camel 7y ago
What are those reasons?
- jcranmer 7y ago
  Some of the theories I've heard are (I don't necessarily agree with all of these): * Higher intrinsic costs (i.e., labor costs, eminent domain costs, litigation costs) * Outright corruption (this one in particular I'd disagree with for US costs, but I have heard people discuss it). * Price gouging, either via corporate cost-plus contracts raking in money, or via union featherbedding, or some other way in which a lot of money within the contracts are for things that don't really serve any "legitimate" purpose. * Political consideration forcing all projects to become "megaprojects" that are prone to sunk cost fallacies or scope creep and are not amenable to effective cost-control. * Antigovernment trends shifting design and engineering work from public agencies, causing the agencies to be unable to effectively manage the construction of projects.
Ilverin 7y ago
Where is a better article? The cost of infrastructure is extremely complicated. People who are experts in construction financing are busy making good money rather than writing articles or donating time to journalists. (and construction/construction finance experts are usually only experts in a specific subfield) http://nymag.com/intelligencer/2019/07/why-we-cant-figure-out-why-infrastructure-is-so-expensive.html http://nymag.com/intelligencer/2019/07/why-we-cant-figure-ou...
- darawk 7y ago
  https://slatestarcodex.com/2017/02/09/considerations-on-cost-disease/ https://slatestarcodex.com/2017/02/09/considerations-on-cost... This is a pretty good article, along with his response to comments: https://slatestarcodex.com/2017/02/17/highlights-from-the-comments-on-cost-disease/ https://slatestarcodex.com/2017/02/17/highlights-from-the-co...
  - Ilverin 7y ago
    That is a good article for explaining why costs have gone up in most countries, like they have in France and Spain. It's less good at explaining the vast outlier (larger outlier on cost than gdp) that is US construction costs.
Mvhsz 7y ago
I think the headline for this article is unfortunate. The article didn't focus on answering the headline in the way most readers will expect, but those who have read more of Chuck Marohn's writing probably won't expect it to. It's really about "Why Does Infrastructure Cost So Much?" being a common concern but missing the point. He points out that bad development patterns and misguided regulations lead to roads that aren't economically productive enough to pay for their own maintenance, and that reducing the actual construction costs isn't going to change that paradigm. This probably shouldn't be the first article anyone reads on strong towns, as it jumps to conclusions that are justified in earlier writings.
- HillaryBriss 7y ago
  I believe this article's best explanation of its solution is: My approach ... is for local governments and local communities of people to assert leadership, to take active steps to make their places stronger, healthier, and more prosperous, so that—regardless of what happens with the state and federal economies—our cities evolve to become better places to live. It seems to me that could mean a whole lot of different things, or maybe nothing at all. It's not really specific advice. IDK. Maybe the book has the details.
dkhenry 7y ago
The article gives two reasons. The first starts in the paragraph that begins with The first underlying driver of U.S. infrastructure costs is that the U.S. has felt so rich as a country that, for decades, we spent freely on infrastructure and never asked serious questions about the return on that investment And then lists some of the things we spend freely on that aren't really necessary. The second reason is The second underlying driver of U.S. infrastructure costs is how deeply embedded infrastructure spending is within our model of economic growth. both of those essentially boil down to we spend so much because the market is set up to encourage us to spend a lot. Probably not the answer you were looking for, but at the end of the day we spend so much money because we have set up the market to enable high prices.
- someguydave 7y ago
  The underlying factor really is that the people in charge of spending infrastructure money are not really incentivized to be careful or ask tough questions about how it is being spent. Furthermore, they are often bound by piles of regulations and restrictions on their freedom for contracting the work, so they also lack agency.
  - IfOnlyYouKnew 7y ago
    Yeah, that's just the old and cynical "everyone-is-corrupt" talking-point. It fails rather obviously because (a) the article is comparing costs across countries, and other countries haven't found some magic system to increase accountability of politicians and beaurocrats that goes beyond not re-electing them. And, (b), there are plenty of incentives for decision-makers to keep costs down. Don't you think the governor or Mayor of New York would crow endlessly if they managed to build subway <x> or tunnel <y> for a fraction of the usual costs? Have you noticed how California's high-speed rail project and its cost overruns have been terrible for three governors in a row?
    - liability 7y ago
      Whether anybody is practicing witchcraft or any other form of magic is beyond the point; it should be obvious to anybody who's not totally naive that some countries have more corruption than others.
defterGoose 7y ago
Ok. But why?
topspin 7y ago
For me it has become habit to read comments about articles before actually reading the articles. The deliberate miss-titling of stories to sucker in readers is now commonplace and I appreciate when I'm afforded a chance to avoid it. Here we're allowed to believe the story might investigate why building infrastructure in the US costs several multiples of what other countries pay, or what the US used to pay for the same result. Instead what appears is yet another naval-gaze about the evils of roads, cars and suburbs.
projektfu 7y ago
There was a specific example that is indicative of why it costs so much here. He said, hypothetically, that a road project may have to purchase 5 additional feet of land for the right of way in order to meet some standard like 12 foot lanes, doing this without thinking at all. That 5 feet may not have been needed if you sized the project to 11 foot lanes, but now it must be purchased from a variety of landowners, and each one knows that they can hold out for top dollar. And it's probably low-value land to them anyway if you're building a 5-lane road through it. This sort of thinking gets in the way of a lot of projects. I read at the time that Acela was proposed as a 180mph train, but the difficulty acquiring and building more right of way to smooth out turns, and the requirements for heavier parts to meet some safety regulations, meant that it could not approximate the speed of TGV. Instead, it goes 150 on some relatively straight sections and usually goes somewhat less. The special trainsets also cost more than European HSR trainsets. Why do government software systems cost so much? Many of the same reasons, and as the article points out for infrastructure, the players have a desire to fund big projects and act like they're "done" instead of funding little improvements all the time.

baggy_trough 7y ago

Awful article. The primary reason is that government has very low accountability, so it's ripe for corruption.

hos234 7y ago

He is right in the sense when local bodies have decent leadership good things happen. But who wants to go work in local govt? There lies the problem.

madengr 7y ago

It’s not just infrastructure, or cost. After watching Apollo 11 the other night, I can’t fathom how that was done in 8 years. Also, in the movie, one of the mission controllers looked to be about 70. To think that when we he was born, flight, radio, and computers did not exist. Here he was putting men in the moon. Here I’m, born a couple of years after that, and seems not a damn thing has happened since. Everyone has a piece of shit in their pocket with which they can sext. Call that progress; Truly depressing.

someguydave 7y ago
It was done in 8 years because the US was spending 4% of GDP on NASA, which was probably a mistake in retrospect. The other reason is that it was a greenfield project with competent management, generally.
- melling 7y ago
  Has anyone done a good analysis of this? It can probably be argued many ways. The program did cost much less than the Vietnam War, and did pay off in future dividends. The war not so much. https://thevietnamwar.info/how-much-vietnam-war-cost/ https://thevietnamwar.info/how-much-vietnam-war-cost/
  - wongarsu 7y ago
    Also the Moon landing was at least as much defense spending as it was science spending. The Soviets derived a lot of national pride from holding all the major space achievements and beating them had great propaganda value. Also without knowing how useful the moon would be it was deemed unacceptable to risk the Soviets gaining a foothold, exploiting all its resources and defending it as their territory.
    - someguydave 7y ago
      Doesn’t that sound kind of whacky in retrospect?
  - 7y ago

situational87 7y ago

It's really bizarre to complain about how roads cost "too much" when we are now spending $1 Trillion per year on stock buybacks. A few executives and directors (who are already the richest humans that have ever lived) are adding orders of magnitude to their hoards with these massive buybacks. Google just broke records by announcing an unprecedented $25B in buybacks for this quarter. Over the same time period they are spending $6.2B for all of research & development. Expect these buyback numbers to grow wildly in the coming years. How much does a bridge cost again?

navigatesol 7y ago
>A few executives and directors (who are already the richest humans that have ever lived) are adding orders of magnitude to their hoards with these massive buybacks. First of all, it isn't "we". This is not public money. It belongs to the shareholders, and buybacks are one way to return the money (tax efficiently). Why should it be horded by the company? If there is nowhere to invest, give it back to the owners to spend or invest as they see fit. Second, buybacks don't magically raise the share price. The number of shares outstanding decreases, but so does the cash on the balance sheet. There is plenty of literature on stock buybacks and how they work, you simply need to look beyond the populist headlines.
- ceejayoz 7y ago
  > First of all, it isn't "we". This is not public money. You could argue it should have been. https://www.bloomberg.com/news/articles/2019-01-16/here-s-how-u-s-businesses-actually-used-their-tax-cuts https://www.bloomberg.com/news/articles/2019-01-16/here-s-ho... > On Jan. 1, 2018, the biggest, most sweeping U.S. corporate tax cut ever enacted went into effect. A year later, we’re able to see how businesses used all that extra cash. > The short answer: to buy back shares.
  - cameronbrown 7y ago
    Trump's tax cut helped big business, that's true. But for each corporate buyback there were thousands of mom and pop shops that benefited and invested.

DataGata 7y ago

The Strong Towns line is a pretty simple one, and this article simply reiterates on it: Nobody does ROI calculations on infrastructure costs and it will catch up with you sooner or later. It might be compared to technical debt for the HN crowd: you build fast and break things for a couple of decades (post-WW2) and then suddenly you find yourself with an unimaginably complex, catatonic system that can't pay for itself. The interest payments overwhelm the rest of the system. However! That doesn't actually answer the question about why _new_ infrastructure costs so much (surely a new subway line doesn't actually care if half the roads are ten years behind their maintenance schedule).

whenanother 7y ago
what these articles lack is the list of costs in a project. there should be law requiring all projects to list all costs in an easily accessible document. we already require this in the medical field and know full well that those 15 dollar bandaid and insurance premiums are the things that drives ip costs.
maximente 7y ago
this may just be a part of your analogy, but it doesn't seem like being revenue neutral is a great goal for public infrastructure. that's not to say one should not evaluate the potential of a dollar spent in a metro area of 25million vs. 2500. but it is to say that that metric of revenue neutrality isn't ideal. one could easily imagine a situation where $1 in infra leads to $4 in economic growth, or $1.05 in additional tax revenue, or whatever. but yeah i agree, those are the calculations that need to be done. and yeah it's a bit self reinforcing - rich get richer, economy wise - but this notion that everyone can not pay that much extra yet get their own big ass plot of land, roads and parking spaces - which is what suburbs are, as far as i can tell - isn't sustainable.
rhizome 7y ago
It sounds more like snowballing costs as you deal with technical debt by throwing more Heroku at it. It has seemed apparent to me for some time that contractors/developers are pumping costs and milking change orders, with cities going along with it, possibly due to limited numbers of contenders. Similar to healthcare costs being a dance of growth between insurance and medical providers.

someguydave 7y ago

Demand for new infrastructure competes with maintenance of old infrastructure, so decades of overbuilding will eventually exhaust the supply of construction services.* *who are willing to deal with government red tape

bilbo0s 7y ago
Around here, it's not inaccurate to state that the construction services are the ones who created the red tape. Politicians and construction firms around here concert to keep a steady stream of money flowing to only designated buckets. So not only are they willing to deal with it, but they would very much protest if it weren't there. I try to keep in mind that it might be for the purposes of creating BS jobs for economic purposes. But here in Wisconsin, and everywhere else too probably, there is definitely a very large element of skimming tax revenue by funneling it to your buddies.
- secabeen 7y ago
  Yeah, bureaucratic red tape often becomes part of the economic moat protecting the incumbent providers from competition.
- heymijo 7y ago
  I wish everyone had the knowledge of The Power Broker by Robert Caro in their heads. It's a mammoth book, mainly talks about early 20th century NYC development, but my god is it enlightening into how infrastructure got built.
gamblor956 7y ago
Demand for new infrastructure competes with maintenance of old infrastructure, so decades of overbuilding will eventually exhaust the supply of construction services. I know your statement is hyperbole, but this is a completely wrong understanding of how public-financed construction projects work, and the market for them, and other people are taking it for face value. For starters, demand for new infrastructure at the public level generally requires replacing existing/old infrastructure. This is frequently because decades-old infrastructure was built to older/weaker standards and would need to be upgraded to newer standards, and the upgrade would cost as much or more than simply demolishing and rebuilding brand new. Also, there is no such thing as a shortage of construction contractors willing to deal with government red tape. The government is the best client: it always pays on time, and it usually pays more than the face value of the original contract.

danans 7y ago

> If we made the assembly of steel, concrete, and asphalt cheaper, do you think suburban mayors would stop demanding we build them big box interchanges? I generally agree with many of Strong Towns' arguments, but this really seems to miss the mark. The reason why major infrastructure projects like regional/urban rail systems, tunnels, etc are so expensive vs other developed countries isn't due to the cost of commodities like concrete or steel. It's due to the lack of sufficient domestic expertise in designing, managing, and building such large scale works. Because we don't build that scale of project frequently in the US, when we do it, we don't do it as efficiently. A recent example would be the use of the incorrect grade of steel in San Francisco's new Chinatown subway line. OTOH, we have huge amounts of experience building big box stores, parking lots, and freeways, which are the sort of infrastructure that the Strong Towns perspective says (correctly IMO) that we don't need so much of. We need to build infrastructure with higher utilization, which therefore doesn't need to rely on what Strong Towns describes as the Growth Ponzi Scheme, but unfortunately that's exactly the sort of infrastructure that we are not very good at building.

jdavis703 7y ago
We also have "Build America" policies that penalize us from bringing in foreign companies with expertise. We have to make a decision, is infrastructure a jobs program for today or an economic investment for tomorrow?
erentz 7y ago
Two things this makes me think of. 1. The US has a large NIH attitude and is unwilling to adopt overseas experience or standards. 2. Somehow we have to move away from building infrastructure as stepwise huge mega projects. And start building infrastructure as an ongoing incremental and reliable program into perpetuity. E.g. instead of CAHSR designed largely as a dedicated rail system with huge up front capital costs the benefits of which can’t be felt until it is all spent, set up a state rail agency to consolidate and consistently fund incremental improvements to the rail system, with incremental ROW purchases and improvements that over time reach the really big HSR goals. Imagine for example CAHSRs capital budget of $80 billion but instead going to fund an agency for 30 years that can then hire engineers and project managers and allocate it to its projects that have the best ROI over 30 years. That last one seems to primarily be a political challenge though. Nobody likes state run agencies and everyone loves defunding them.

ghobs91 7y ago

For new infrastructure specifically, it costs a ton in the US because of a combination of non-transparent bidding system from contractors (politicians give their buddies bloated contracts) and construction unions overstaffing construction sites. In other words, taxpayer money is being taken for a ride. For a good example of the latter situation, look up the rampant overtime abuse that's been discovered at the LIRR. There's little incentive to keep costs down and use funds efficiently, because it's tax payer money.

Scoundreller 7y ago

I feel like eBay is like this. Everything is a new front end on top of a new front end. Every once in a while, you’ll get directed toward some ancient looking page designed for 800x600 that’s running everything. Particularly on the account payments side.

gamblor956 7y ago
If the accounts payable system is still working and can handle eBay's volume, why spend the money to "upgrade" it? Not everything old needs to be remade anew.
- elliekelly 7y ago
  I once worked with a company where this line of thinking had infected all of senior management. That’s how they ended up with an “intranet” that consisted of a shared excel workbook with hyperlinks to hundreds of other shared files. But it wasn’t broken, so why spend the money on SharePoint, right?
  - awakeasleep 7y ago
    I'm not being facetious when I say I'd prefer a spreadsheet with links to Sharepoint. At least you can ctrl+f the spreadsheet.
  - asdff 7y ago
    Wow I might start doing that myself for my projects to be honest.
- oneplane 7y ago
  Because the value of things doesn't boil down to "is it totally broken or sufficient".
- Scoundreller 7y ago
  It works... barely. Your account can only be in one currency. Want to do some listings in US$, and others in CAD$? No yuo. You can only change between your billing currency every 12 months.

maximente 7y ago

this seems like a natural end to the author's aptly named 'Suburban Experiment'. once these true costs are factored in and some really unpleasant decisions made, it's not unreasonable to think that a lot of smaller tier cities/burbs will fold up due to a cycle of tax increases due to true revenue required => people leave => less tax base => death. but honestly, that seemingly had to happen. the true cost of 'burbs is just way higher than anyone wanted to admit (or tax). the huge overhead of services + spreading them out over massive areas (relative to dense cities) seems to be untenable long term.

clairity 7y ago
i'm an urbanist, but even to me, "experiment" sounds needlessly antagonistic. it wasn't an experiment, but rather a deliberate set of decisions to give citizens what they wanted despite the (possibly foreseeable) problems. government subsidization was manageable when out-migration didn't demand the resources it does now, in terms of standards/regulations (roads, drainage, electricity, water, sewage, internet, etc.), process (bureaucracy, legal challenges), graft/corruption, and the sizeable population now in (and moving to) the suburbs/exurbs, all in a robustly growing and more equitable economy. we've since realized that costs go up superlinearly, which makes it a bad use of resources, so instead we advocate denser urban areas, which provide economies of scale on the infrastructure dollar.
asdff 7y ago
The suburb where I grew up is like this. The city can't get any tenants for vacant commercial and industrial lots. The school district is loosing enrollment and closing branches. Recently trash and recycling has been privatized. The budget hole cannot be closed because the governor cut funding to municipalities. I think it's starting to hit a bottom though. While there isn't any new construction to speak of, as boomers pass or move a surprising amount of younger families are moving in, probably because houses are only 100-200k. I don't know what the end results look like. More ebb and flow I guess. I will say that this is a middle-middle class suburb; the upper middle class suburb it borders with the excellent school district and an equinox is doing great with homes selling for north of 500k.

Proven 7y ago

Because it's built, managed or organized by the government

heymijo 7y ago

I think infrastructure in some places in the U.S. ends up looking a bit like a ponzi scheme. Example city--Charlotte, NC. Down south in Charlotte there is an area called Ballantyne. Ballantyne has good schools, new everything, etc. Ballantyne also has high taxes. So what do people do? Move 5-10 minutes down the road into South Carolina where there is abundant land. They start developing. More people move in. Schools are built. They fill up. They build new ones. People complain about the old two lane country roads so they are expanded. Taxes go up to support this. Then either people keep playing the move game to a new undeveloped area or the ROI calculation that nobody does on infrastructure catches up with the town. Some can support it, others can't and it's a downward spiral. I'm not sure I've explained this well. I mostly think about this from the human POV, which I didn't even mention above. The rational thing for someone living in the high tax area is to go to the new area as it is developing and everything is new and then to decamp before things go so far downhill that property values drop. Game theory? Tragedy of the Commons? What all is at play here and then as importantly, how do we do better?

ellius 7y ago
It's sort of a "Tragedy of Systems." It's very easy for negligent or malicious actors to make bad decisions in a system context, but to have the consequences of those decisions not manifest in the same time or place as where the decision occurred. This makes it really easy to screw things up without suffering the consequences in complex systems, and people often make decisions for their personal benefit ignorant of or willfully ignoring the consequences.
- heymijo 7y ago
  I like how you phrased that and take it to the system level to think about it. It reminds me of Indianapolis, Cleveland, and their metropolitan areas. In 1969 Indianapolis created a "Unigov" merging with its surrounding county, and all of the suburbs within it.[0] The Unigov concept has been studied a lot. General view is it was a net positive, with one of those benefits being a shared vision, shared tax base, etc. Contrast that with the city of Cleveland and its metropolitan area. The city and its suburbs are distinct places. Suburbs on the east side and west side compete with downtown to give economic incentives to draw businesses away from each other. For example, American Greetings (the card maker) moved its long-time HQ from Brooklyn, Ohio (a Cleveland suburb) to Westlake, Ohio (another Cleveland suburb). Westlake lured American Greetings with incentives that Brooklyn could not match. The net benefit to the region is likely nil, but the benefit to Westlake, and the loss to the other suburb is demonstrable. [0] https://www.cgr.org/consensuscny/docs/CaseStudies_ec-unigov514.pdf https://www.cgr.org/consensuscny/docs/CaseStudies_ec-unigov5...

gok 7y ago

The first part is quite good. Those who could be making infrastructure cheaper have no incentive to do so. The comparison to education and healthcare is spot-on. The second part is a bunch of Malthusian nonsense.

mempko 7y ago

Wait, if we freely spend on infrastructure, and infrastructure assumed to be just a given, then why do we have a D rating on infrastructure by our engineers? Why do we have so much neglect in our infrastructure? Something doesn't make sense here.

robocat 7y ago

Cost-benefit analysis is an engineering solution to a political problem - it seems great but it doesn't solve political issues. In NZ potential changes to the national road system are ranked by cost versus benefit. Only the most beneficial projects are commenced, and low or negative value projects are not funded. Projects must also exceed a minimum benefit vs cost ratio. The political problem is that national infrastructure project spending and lending is seen as overwhelmingly occurring in Auckland. Cost-benefit leads to perceived imbalance because costs are massive in Auckland but the benefits are huge too (a large population, multiplied by large congestion).

DataGata 7y ago
Is that a political problem? Surely, a person who lives in rural NZ might think, "Oh, my tax dollars are being used to help those in Auckland; I'm being shafted", but if NZ is anything like the United States, urban centers are the producers of tax units and rural areas consume tax units.
- robocat 7y ago
  If you don't live in Auckland, your reckon your taxes are being spent in Auckland on expensive roading projects, and you can see that work isn't getting done on your local roading problems. Regardless of how optimal for the nation that might be, or even if everyone is actually better off, you can easily end up with many unhappy people outside of Auckland (a political problem). Edit: strongtowns on cost/benefit analysis (half good, half not): https://www.strongtowns.org/journal/2010/12/21/best-of-blog-costs-and-benefits.html https://www.strongtowns.org/journal/2010/12/21/best-of-blog-...
- oh_sigh 7y ago
  It's not a straightforward as simple consumption and production of tax units. The question is who benefits? If Alaska consumes a lot of tax units by having an early warning system for ICBMs, then Alaska benefits in the sense that there is a government jobs program, but the simple calculus of tax units consumed vs produced doesn't factor in the benefit San Francisco and Los Angeles get from the early warning system.

javajosh 7y ago

For a long time our culture seemed to produce honest people doing work for an honest wage. They would be reluctant to "charge more than it's worth". There was an element of honor to it, and avoiding the shameful act of gouging your customer. If something takes 2 days to do, and it costs you $30/day to live, then you charge, say $120 - you're not only living, but also you're saving for a rainy day. It's a good thing. Cynical market manipulation has soaked into real world work at every level both public and private. Sociopaths with the balls to ask 10x or 100x the traditional, cost based price have succeeded totally, and have lured workers with 2x or 5x wages, essentially starving any potentially honest competition. It stuffs all the good workers into a profit-maximizing corporation that now has a lot of other priorities that often conflict with "an honest days work for honest pay". The city politicians and admins responsible for actually spending the peoples money are often unable and/or unwilling to actually take responsibility for the projects. Partly this is the moral hazard of spending other people's money; but partly it's passing the buck, not wanting to take on any risk associated with real project execution. The public's awareness is dim and short-lived, so the upside of project success isn't worth the risk. So you hire a firm to hire the firm to do the project, and you have plenty of scapegoats if things go sideways. I don't think successful projects can just happen. You need individuals, visibly, identifiably, running projects, and building reputations. I think it's wrong for a small town's admins to throw money at a big corp to do an infrastructure project, and pay themselves 6-figure salaries to "oversee" it for 10 years, "darn those overruns!" In fact, I think it would be great if infra project competence was second only to running a self-restrained police force as a topic of city elections (the distant third being capability in running other city services well). But from what I've seen American voters only show up if they have strong emotions, and don't know anything about government or the people running to rule them. So, this is what you get.

Balgair 7y ago

I have some family in the large public works business, so I have some persepctive here. Large public works projects are really expensive and take a lot of know-how to get done properly. It's only been since the 70's that we've had the engineering chops to even understand how ground water works around a dam [0] let alone what to do with the older dams. The computer models of how the soil works around the transbay tube duing an earthquake is basically guessing, we just don't have good data. Heck, even with good models and good firms, you still have to just pray that the rain isn't too bad for a few years. One of the main issues is that we just do not have a good idea what the ground/climate is doing over a 50 year timeline here in the US. Look at all the cliff-side houses in Santa Barbara, or the houses along the Mississippi, or the houses in Paradise. As such, it's very hard to insure, plan, and estimate what kinds of tolerances the public works should be built to. To do things properly is basically a guess most of the time. As such, when that gamble fails, the clean-up is really something. [0] https://www.youtube.com/watch?v=0EzoHXEzdwY https://www.youtube.com/watch?v=0EzoHXEzdwY esp. around minute 3.

thephyber 7y ago
> or the houses along the Mississippi This one is different from the rest. People have lived along the Mississippi for hundreds of years and the river reliably floods beyond its banks every. single. year. The problem with dwellings along the Mississippi is the "moral hazard" by allowing the US Federal Government to insure these houses without preconditions and never denying a claim, despite the fact that one property has flooded more than 53 times in the last 50 years (claiming on flood insurance every single time). I would argue that it's just not politically sexy to say "I am going to maintain this X" as it is to say "We are going to build this Y". They are the "blocking and tackling", but the voters are in the stands waiting for the quarterback drops back to pass long.
- jjeaff 7y ago
  If it is flooding that frequently, I wonder if there is any required proof that things were fixed up since the last flood? Seems like the owner is likely just making cheap patches and then waiting for the next flood to collect another payment. Otherwise, I can't imagine anyone wanting to go through that every year.

hackeraccount 7y ago

I tend to think it's lack of competition. The industries that do best in the US are ones that foreign competitors have the easiest ability to compete in. Construction is almost inherently a domestic affair. With efficiencies gained in more competitive the money saved has to go somewhere so it gets spent on construction. Of course a problem with this is that I don't think all forms of infrastructure spending of gone up in price - look at housing; per square foot I don't think the cost has gone up that much.

sword_smith 7y ago

Why do people subscribe to the myth that US infrastructure is bad? I am Danish and was on a road trip from Houston to LA, to Caspar WY, to Denver CO in 2017 and the roads we were driving on were excellent. Better than even the German highways which are some of the best roads in Europe. Is it the construction lobby that wants more funding and creates this narrative?

Redoubts 7y ago
If your interest in infrastructure begins and ends with cars, then the USA won't disappoint.
- Aperocky 7y ago
  TBH that's the American definition of infrastructure anyways.
osdiab 7y ago
The utter lack of public transit is my main issue. Even the cities that have some tend to be very unreliable. Though to your point, interstates tend to be pretty good, but but a lot of random cities’ surface streets can be pretty bad, there have been public health scares like the lead contamination in Flint, Michigan, and there was a often cited report by the American Society of Civil Engineers that rated the USA poorly on its infrastructure [1]. [1] https://www.infrastructurereportcard.org/ https://www.infrastructurereportcard.org/
xeromal 7y ago
People on Reddit and Hackernews seem to be mostly pessimistic. I agree with you. Yeah, we have potholes in places and old bridges that need repair, but we managed to put roads across the entirety of the US in a 100 years. Most of the shitty roads I've seen in the states are in the cities where there are loads of traffic. I'm not really bothered by it.

bin0 7y ago

Union contractors and brothers-in-law are most of it. I lived in Houston for a while, which is a very large and bureaucratic city. They can't get infrastructure done right. In the area are a few small towns which incorporated before being sucked up by Houston, and are much more efficient. They are called the Villages, and banded together to run their own police, fire, public works, etc. Instead of dealing with stupid unions, they hire normal private contractors and get things done quickly. Get rid of your horrible union agreements, and be more like the Villages.

aussiegreenie 7y ago

But it does not in Europe. America pays about 2-3 times the price per mile for roads and rail than in Germany. Australia pays even higher prices than in America. eg Sydney purchased surplus trams from Spain. The Spanish tram system cost USD 115 million for about 40 km (25 miles) and Sydney has already spent nearly $3 billion (USD 2.1 billion) for about 40 km and it will cost another $500 million before a single tram starts. The project is already years behind schedule.

obelos 7y ago

As another perspective, a recent draft paper[1] notes a correlation between transportation infrastructure costs and how much community involvement there is on the project. TL;DR, infrastructure was way cheaper when we could just bulldoze through neighborhoods and wetlands without meaningful pushback. [1] Brooks, Leah, and Zachary D. Liscow. “Infrastructure Costs.” SSRN Scholarly Paper. Rochester, NY: Social Science Research Network, July 31, 2019. https://papers.ssrn.com/abstract=3428675 https://papers.ssrn.com/abstract=3428675.

magicalhippo 7y ago

Reminded me of my mom's place. They've got a multi-year project to dig up the road, replacing main water pipe and other stuff, so whole road is closed off for a few miles. So far in 2019, my mom (who's a pensioner) and me have only seen people working there during weekends or after five in the evening. Mostly sporadically, nothing for a week, then a small group on Sunday afternoon, then nothing again. Meanwhile all those construction vehicles and tools are just sitting around. Somehow these guys ended up being the lowest bidders.

dbg31415 7y ago

Digging costs a lot of money. https://arstechnica.com/tech-policy/2018/03/dig-once-rule-requiring-fiber-deployment-is-finally-set-to-become-us-law/ https://arstechnica.com/tech-policy/2018/03/dig-once-rule-re...

rayiner 7y ago

Environmental regulations. The average infrastructure project in the US spends 4.6 years in environmental review, which provides rich opportunities for NIMBYs to block the project. The purple line in Maryland, a 16 mile long above ground light rail line through the DC suburbs, is so plagued by litigation, it will cost almost twice as much as Copenhagen’s massive new subway expansion (27 miles of tunnel under downtown Copenhagen).

viburnum 7y ago

I see a lot of comments here are missing the point. America just has too much infrastructure (roads for cars), spread way too thin. Walkable, bikeable neighborhoods require much less in the way of paving, highways, interchanges, etc. It's way cheaper to invest in places for people than it is to try to solve every problem with more concrete.

massysett 7y ago

Health care is expensive. Infrastructure is expensive. Education is expensive. What all these things have in common is that they are labor intensive and must be performed with American labor—and well-trained American labor at that. American labor is expensive because we’re a rich country. So it’s absolutely no surprise these things would be expensive, and not much we can do about it. At least that’s become my theory and it’s so obvious to me that I don’t know why it hasn’t been analyzed that way.

ryanthedev 7y ago

Bad code

randyrand 7y ago

Do the numbers support this conclusion? Because without numbers this seems like complete conjecture. What a waste of time reading this article.

tabtab 7y ago

The costs probably went up for the same reason healthcare, education, and rent/housing* costs have gone up relative to inflation: they have not been able to take significant advantage of automation and outsourcing like most everything else has. It's one of the high-hanging fruits of automation and outsourcing. (I'm not putting a general value judgment on overseas outsourcing here, only saying that it lowered prices.) * You can't make land in a factory, barring a collision with Mars.