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In a lot of suburban areas the density is such that the infrastructure costs more and the property value is lower (on a per lot basis). The end result is that a
by bilbo0s 6y ago
In a lot of suburban areas the density is such that the infrastructure costs more and the property value is lower (on a per lot basis). The end result is that a lot of the wealthy suburbs will go broke.
If a suburb or ex-urb's liabilities exceed their assets, weren't they already broke? I'm trying to understand because I don't know a lot about this whole issue. But unless they charge people a whole lot in taxes to live in those areas, I'm not seeing how those places weren't poor in reality from the start? It seems to me those suburbs just managed to have other people pay for their infrastructure and services for so long that they never realized they were broke. But maybe there is some other source of money that they get from somewhere?
- hiram112 6y agoMost localities sell bonds, backed up by promise of future tax revenue. Eventually their bonds are downgraded and they have to pay higher and higher interest rates. Finally, the math comes crashing down and the game is over when the market has no more appetite for the bonds and the state and feds won't backstop them.
- blululu 6y agoIn some sense yes, but the bill doesn’t come until much later. A city can run a deficit for a long time before its debt payments become its biggest budget item (or second after its police department in many cases). This leads to cuts, austerity and the usual contractions to a more manageable budget. And yes, in many cases the infrastructure for suburban development is initially paid for by someone else. Often some combination of federal and state programs to build roads and other public works projects along with subsidized loans.