Why American cities can’t keep up with infrastructure maintenance (2017)(strongtowns.org)
strongtowns.org
Why American cities can’t keep up with infrastructure maintenance (2017)
https://www.strongtowns.org/journal/2017/1/9/the-real-reason-your-city-has-no-money
471 comments
Yet again an article about how it costs $X to do something with infrastructure but no explanation for why it costs $X. Until everyone starts asking "why?" and then addressing the resulting answers (commonly: kickbacks, overregulation, collusion in bidding, and simple "match the budget" bids) this issue will continue with every aspect of government-run service.
> The median house in Lafayette costs roughly $150,000. A family living in this house would currently pay about $1,500 per year in taxes to the local government of which 10%, approximately $150, goes to maintenance of infrastructure [...] To maintain just the roads and drainage systems that have already been built, the family in that median house would need to have their taxes increase by $3,300 per year.
As best I can tell, the author was saying that Lafayette is spending only $150 / ($3300 + $150) =~ 4% of what it needs to spend to maintain its roads and drainage systems. That seems implausible. I wonder whether he has made an odd assumption: "currently, 10% of taxes go to maintenance of infrastructure; thus, if we increase taxes by $3,300, only 10% of the increase will go to maintenance of infrastructure." That odd reasoning might account for his "need to have their taxes increase by $3,300 per year" claim.
As best I can tell, the author was saying that Lafayette is spending only $150 / ($3300 + $150) =~ 4% of what it needs to spend to maintain its roads and drainage systems. That seems implausible. I wonder whether he has made an odd assumption: "currently, 10% of taxes go to maintenance of infrastructure; thus, if we increase taxes by $3,300, only 10% of the increase will go to maintenance of infrastructure." That odd reasoning might account for his "need to have their taxes increase by $3,300 per year" claim.
In my experience, it's because people in the middle of nowhere are allowed to vote on infrastructure projects. They claim they don't want "their tax dollars" to pay for "them city slickers." The important bit they conveniently leave out is that cities majorly subsidize rural living through taxes.
All of our major systems: from infrastructure to employment to graduate work, is built on the assumption of eternal exponential growth. All of these past infrastructure decisions would've been fine if we continued to have exponential economic and population growth. More taxes/funding would come in and there'd be new money to continue to grow forever. Except it can't grow forever. Eric Weinstein coined the phrase "Embedded Growth Obligation" (EGO) to describe this phenomenon.
>"An embedded growth obligation is how fast a structure has to grow in order to maintain its honest positions," Weinstein says. "If you have a situation in which you have trial lawyers and they're supported by various associates, and the associates all want to become partners and trial lawyers themselves, then what you have is a situation where the law firm has to grow at a very fast clip if all those people are going to be satisfied with their job decisions. Well, very quickly that ability to grow runs out, and then people want to know, "Why am I stuck in a position going nowhere?"
https://bigthink.com/culture-religion/eric-weinstein-intelle...
>"An embedded growth obligation is how fast a structure has to grow in order to maintain its honest positions," Weinstein says. "If you have a situation in which you have trial lawyers and they're supported by various associates, and the associates all want to become partners and trial lawyers themselves, then what you have is a situation where the law firm has to grow at a very fast clip if all those people are going to be satisfied with their job decisions. Well, very quickly that ability to grow runs out, and then people want to know, "Why am I stuck in a position going nowhere?"
https://bigthink.com/culture-religion/eric-weinstein-intelle...
This was a good explanation of why US cities will never be able to cover their infrastructure maintenance costs.
The town I live in recently completed a $20mil sewer treatment plant and is in the process of beginning a $2mil+ project to replace the water lines.
It has approx. 1,600 residents, although the neighboring town is a customer of our sewer plant and they supply our drinking water (even though we are on the river).
I believe, as an investor of municipal bonds, the tax liability is eliminated, so this may be a reason this type of investment is ‘pushed’.
The town I live in recently completed a $20mil sewer treatment plant and is in the process of beginning a $2mil+ project to replace the water lines.
It has approx. 1,600 residents, although the neighboring town is a customer of our sewer plant and they supply our drinking water (even though we are on the river).
I believe, as an investor of municipal bonds, the tax liability is eliminated, so this may be a reason this type of investment is ‘pushed’.
Why don't we just stop building all this infrastructure, and move to a micro-community or individual model?
My parents' farm is on a well and septic, and a dirt road. Water purification is done with a UV filter. The infrastructure costs are almost nil.
We are in an age now where houses don't even need to be on the power grid -- a set of solar panels and a lithium battery makes traditional power distribution obsolete.
If it costs a typical suburban house $10k a year to maintain infrastructure, that's outrageous. Move to individually or community based infrastructure.
My parents' farm is on a well and septic, and a dirt road. Water purification is done with a UV filter. The infrastructure costs are almost nil.
We are in an age now where houses don't even need to be on the power grid -- a set of solar panels and a lithium battery makes traditional power distribution obsolete.
If it costs a typical suburban house $10k a year to maintain infrastructure, that's outrageous. Move to individually or community based infrastructure.
Hot take: Its mostly just car infrastructure thats the cause of the problem. We spent way too much money for a large car-centric transport network that doesn't scale. Stop subsidizing and prioritizing cars as a primary form of transit and you fix most of the issues.
In the article there is a link to a follow-up article:
https://www.strongtowns.org/journal/2017/1/10/poor-neighborh...
And in this one, a link to another interesting explanation:
https://www.strongtowns.org/curbside-chat-1/2015/12/14/ameri...
https://www.strongtowns.org/journal/2017/1/10/poor-neighborh...
And in this one, a link to another interesting explanation:
https://www.strongtowns.org/curbside-chat-1/2015/12/14/ameri...
A critique from Bay Area planner Asher Kohn, also from 2017: https://www.asherjkohn.com/blog/2017/10/30/the-weak-logic-in...
A lot of the initial taxation and allocation discussion seems likes somewhat of a red herring. The starting point is near the end, IMO: The cost of infrastructure maintenance is $8k-$10k per home.
Is this true? How variable is this between cities? How determined is it? Could it be less, how, etc.?
IDK if this number is normal or out of line, but I think this needs to be the starting point. My uneducated opinion is that it seems high.
Is this true? How variable is this between cities? How determined is it? Could it be less, how, etc.?
IDK if this number is normal or out of line, but I think this needs to be the starting point. My uneducated opinion is that it seems high.
One difference between here and the States is that most of our tax money goes to the equivalent of city and state, and only a small percentage to the national government.
Capital is so cheap these days, Lafayette should:
(1) borrow to fund infrastructure spending; and focus that into new local jobs and economic activity
(2) A boosted economy will allow higher taxes to be collected
(3) Better infrastructure will attract investment
But in this scenario, politicians will skip step 2 because it's unpopular; and the cycle will continue in a future generation.
(1) borrow to fund infrastructure spending; and focus that into new local jobs and economic activity
(2) A boosted economy will allow higher taxes to be collected
(3) Better infrastructure will attract investment
But in this scenario, politicians will skip step 2 because it's unpopular; and the cycle will continue in a future generation.
I remember after the Northridge earthquake in 94 destroyed a section of Interstate 10 in Los Angeles. The state awarded the repair contract to a company with the stipulation of penalties of 200k/day after a certain amount of time, or a bonus a 200k/day if they finished before scheduled. https://www.planacademy.com/construction-project-acceleratio...
And every month in Lafayette, how much money goes to the interest on mortgage debt?
And how many human-hours a month do people in Lafayette twiddle away on corporate busywork so they can pay that interest?
And how many human-hours a month do people in Lafayette twiddle away on corporate busywork so they can pay that interest?
Maybe because middle class left to suburbs leaving mostly ghettos in the cities thus depriving them of them main source of income, the property tax?
In this case, the problem will fix itself, because suburbs are the Cold War creation, they can be seen as a compulsory wartime measure. Provided that relationship with China will not reach Cold War standoff levels, they will cease to exist by themselves, because modern people really don't want to live in them.
In this case, the problem will fix itself, because suburbs are the Cold War creation, they can be seen as a compulsory wartime measure. Provided that relationship with China will not reach Cold War standoff levels, they will cease to exist by themselves, because modern people really don't want to live in them.
I suspect they can keep up and they just will have to in the future. Right now you can see it in taxes for old established cities in the NE have higher taxes than growing states in the South. I saw that NY pays more for retired cops than it does for those working today - that isn't true for Miami/Phoenix/Dallas or other fast growing cities, but will be.
Cities could procure significant funds by assessing developers for long term maintenance costs. For example, it should be possible to estimate how many new housing units would require an additional fire station and the cost to build it. Then prorate that cost to each house. Same applies to libraries, parks, court houses and so on. Developers would tack the additional assessment on to the price of the house and that in turn might slow demand and growth.
Corruption is most definitely a factor, maybe not universal, but I have seen it. In my city a developer got approval for the first stage of new houses, about 130, and the county planning agency gave approval for the second stage conditional upon the developer building a bridge to allevate traffic. After the first stage was complete the county commissioners voted to pick up the cost of the bridge and the only explanation was the developer did not have the funds and the commissioners thought the second stage housing would be be an economic benefit to the community.
Corruption is most definitely a factor, maybe not universal, but I have seen it. In my city a developer got approval for the first stage of new houses, about 130, and the county planning agency gave approval for the second stage conditional upon the developer building a bridge to allevate traffic. After the first stage was complete the county commissioners voted to pick up the cost of the bridge and the only explanation was the developer did not have the funds and the commissioners thought the second stage housing would be be an economic benefit to the community.
The article talked about a “big pot of money” at the federal level but it seems that even if it addressed the backlog the problem would remain.
Why does infrastructure seem to work in Western Europe? Even little towns in Germany have good roads, water, electricity etc.
Why does infrastructure seem to work in Western Europe? Even little towns in Germany have good roads, water, electricity etc.
So basically these cities need to reduce their infrastructure to the point it's maintainable again. That could work for roads. It's not much fun, but in Russia often houses don't have an asphalted roads next to them. but perhaps it wouldn't work for pipes, because of hygiene reasons. Perhaps owners can be made to pay for at least some of those pipes through fees for the homeowners association rather than taxes. That way the excess is off the city balance sheet. Houses that are too far away from central infrastructure would just be vacated eventually. Maybe in time more efficient cost sharing appartments would replace these.
I noticed the author is a civil engineer. Asking a civil engineer if you need more infrastructure spending is a lot like asking a barber if you need a haircut or asking an orthodontist if your kid needs braces.
Does anyone know of data tools that could help (say) a city council understand the position of their own municipality? I think a lot of people are flying blind, not asking the right questions.
Discussed at the time: https://news.ycombinator.com/item?id=13370310
This does not explain long established cities such as Baltimore. They have driven all the high earners out through a combination of high taxes and lack of services. The high earners pay most of the taxes, so now they're just stuck.
From what I can tell, cities have very poor cost control, and regularly pay platinum prices for lead. And they end up not even getting lead.
From what I can tell, cities have very poor cost control, and regularly pay platinum prices for lead. And they end up not even getting lead.
> Except for a small handful of North American cities -- literally five or less -- Lafayette provides an insight into why your city has no money.
...
> It's a predicament that nearly every American city, with very few exceptions, finds itself in.
Does anyone know some of the American cities that don't follow this pattern?
...
> It's a predicament that nearly every American city, with very few exceptions, finds itself in.
Does anyone know some of the American cities that don't follow this pattern?
Man, it's too bad this author didn't read the other post on the front page about colorblindness; I can barely understand anything from his graph.
(Yes this post is from a few years ago, but it does provide a good example of the principles from the colorblindness post.)
(Yes this post is from a few years ago, but it does provide a good example of the principles from the colorblindness post.)
Georgism might be an answer to the problem of sprawling cities: https://en.wikipedia.org/wiki/Georgism
The concept of gaining public revenues mainly from land and natural
resource privileges was widely popularized by Henry George through his
first book, Progress and Poverty (1879)...
Economists since Adam Smith and David Ricardo have observed that a public
levy on land value does not cause economic inefficiency, unlike other
taxes. A land value tax also has progressive tax effects. Advocates of
land value taxes argue that they would reduce economic inequality, increase
economic efficiency, *remove incentives to underutilize urban land* and
reduce property speculation.
I still remember the title of this article before it was edited. It felt more honest before the edit.
The idea that cities must rebuild their infrastructure every generation is completely absurd.
the author did not take zoning in consideration. Public housing usually get built near transit centers where there are lots of business. The mix use zoning contribute to the higher revenue number.
This is the lens through which Strong Towns views the country's cities. It's a useful model that explains a great deal. It's also falsifiable.
The growth Ponzi scheme hypothesis says that the source of America's infrastructure problems is subsidies from higher levels of governments (e.g., federal) to lower levels (e.g., cities) for infrastructure. The outcome is always the same: infrastructure that can't be maintained because its costs were never accounted for.
The Strong Towns website is chock full of examples, and Lafayette LA is just one. At this point if you live in any US city it seems pretty likely that you'll find a Growth Ponzi at work.
Also, that 3D map should scare the liver out of local politicians.