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This is an interesting read, but it's a bit insider. If you're having a hard time grokking what they mean by "growth that makes the city _less_ prosperous," you
by burlesona 7y ago
This is an interesting read, but it's a bit insider. If you're having a hard time grokking what they mean by "growth that makes the city _less_ prosperous," you should start with the Growth Ponzi Scheme series: https://www.strongtowns.org/the-growth-ponzi-scheme https://www.strongtowns.org/the-growth-ponzi-scheme
I'll attempt to briefly summarize:
The post WW2 development pattern across North America (and many other places around the world) is characterized by car-oriented development, where large collector roads fan out to support tree-like trunk-and-branches local streets full of houses, with commercial box stores and strip malls often located where the major collectors cross.
This infrastructure pattern (road, sewer, power) is much more expensive than most people realize, and (to most people's surprise), the local taxes (property, sales, and sometimes income) collected by all the properties that depend on that infrastructure are rarely sufficient to pay for it.
This means that as municipalities expand in this way they are increasing their cost of maintenance faster than they are increasing their revenue, and thus becoming poorer.
The reason this continues is that the majority of the initial capital cost (which, again, is substantially more than most people realize) is heavily subsidized by federal and state "growth" programs. Thus, in the range of the first 5-10 years, local places often get a short-term influx of cash as new development pays local taxes spurred by infrastructure the city didn't have to pay for. But it's a bad deal, because the city is on the hook to maintain that infrastructure forever, and again, the long-term tax base is rarely adequate to pay for it.
This leads to a vicious cycle - which probably sounds familiar - where city officials are desperately chasing more "growth programs" from the state and federal level because they need the income to cover budget shortfalls -- but they aren't stepping back to recognize that the budget shortfalls were actually caused by this same pattern played out over the last 50 years.
It's a fascinating, slow-moving train wreck, one of those things that is all around us, and once you see it, you can't un-see.
Strong Towns exists to spread awareness of this situation. The organization's theory of change is that if the general public were well-educated on this phenomenon, then it would change, as people in each local area would stop making the problem worse then start iterating and innovating on ways to make it better. You can see some examples of places where this is playing out on the organization's "success stories" page: https://www.strongtowns.org/success https://www.strongtowns.org/success
- bluedino 7y agoA lot of cities ran out of funds because of pension plans.
- burlesona 7y agoPension shortfalls are a problem - but consider that many of the pensions were designed in an era where the cities and towns were built very differently and where wealth was accumulating at a steady pace, so cities believed these obligations were prudent and would be affordable to future generations. The pension story is more complicated than just development patterns, but cities gradually losing more and more wealth to bad infrastructure patterns over multiple generations is a significant contributor to why pensions are out of funding (along with everything else).
- mike50 7y agoLifespans have increased. Pensions were designed with the assumption that people would die more often and earlier.
- lotsofpulp 7y ago>The pension story is more complicated The pension story is that people think they can predict economic conditions decades into the future. Which they can't. And they think they can predict human lifespan statistics decades into the future. Which the can't. More importantly, the pension story is that there's a built in conflict of interest. The politician and union bosses on the board of the pension plan get to choose the actuary that provides them with the rosiest numbers. The politician needs the union member's votes because they all vote, and the union members are incentivized to maximize benefits and show the lowest costs. This is all too complicated for normal to understand, and they don't vote for anything other than lower taxes anyway. No one gets elected promising to save future taxpayers money by properly funding pensions by raising taxes now.
- masonic 7y agopeople think they can predict economic conditions decades into the future In most cases, these deals were known to be unsustainable the day they were written. Math just isn't that hard.