Tuesday, October 30, 2012

Strange Bedfellows

By Matt Tester, Project Manager.

If it is true that an enemy of an enemy is a friend, then it would appear that the chips are stacking up against sprawl. A small but energized group of place-thinkers (my term), are making waves with a fiscally conservative argument for efficient land development, relentlessly deconstructing the “Ponzi scheme” that has required more and more leverage to maintain the appearance of growth. In working to address the roots of our collective indebtedness, this group is coincidentally carving out a space for the conservative soul in the anti-sprawl camp – right alongside environmentalists, urbanists, big-government types, and other conservative bogeymen. The conservative makes the case for return on infrastructure investment and the environmentalist makes the case for resource protection; each describes one side of a shared coin: compact growth. And the alignment of these groups is indeed timely, as society faces unprecedented debt levels and threats to the environment.

Chuck Marohn has emerged as one of the most prominent figures calling for this value-driven approach to growth and development. A civil engineer by training, Marohn has become a coveted speaker on placemaking across the country. Through his non-profit organization, Strong Towns, he has developed an expansive platform via podcasts, blogs, books, and speaking engagements. Simultaneously, he’s become a fixture in the New Urbanist scene, which is where we start to see (perceived) opposites attract. While the Congress for the New Urbanism (CNU) certainly has detractors from both the left and the right, it has thus far been more familiar to progressive “planner types” than conservative “anti-regulation types.” The more influence Marohn and his contemporaries wield in the New Urbanist scene, the more it might become a place where politically viable solutions to the challenges of urbanization are born.

I particularly like Marohn’s conceptualization of the “Suburban Experiment” as being fueled by a “Growth Ponzi Scheme.” Without plagiarizing, the basic formulation is thus:

  1. Since WWII, cities and towns have experienced growth primarily using three mechanisms – transfer payments between governments, transportation spending, and (public and private) debt – that seduce them with short-term cash but hang them with long-term obligations.
  2. Revenue from suburban projects increased in the near term, creating the illusion of prosperity. With maintenance obligations a generation away, cities and town didn’t notice/care that the revenues from suburban development paled in comparison to the liabilities.
  3. At the end of the suburban infrastructure’s first life cycle (somewhere in the 70s), the city/town’s maintenance bill came due, and there was only one way to cover the cost: cash from new growth, achieved by borrowing huge sums of public and private money.
  4. The Ponzi scheme similarities became most evident by the time the third life cycle hit (2000s). Like a true Ponzi scheme, our development model would've collapsed without continual infusions of new cash. This required unbelievably risky and complex funding mechanisms.
  5. The collapse of these mechanisms, and the Great Recession that followed, revealed the scheme for what it is, and growth has stopped in many places.

The question is: Will we learn, or will we ride the same flawed model into a dubious recovery? Will we see that free-flowing credit and new housing starts are only good things if they’re supporting the kind of growth that has sustainable value? Listening to our national political discourse, I’m not so sure. In this election season, nobody’s talking about whether we've got the fundamentals of growth right. Aerial shots of abandoned housing developments over the last five years were certainly shocking, but they hardly led to a sophisticated discussion on the fundamentals of our growth model. Now, housing starts are surging again (up 15% in September), and it appears we’re unambiguously happy about it.

My hope is that the common ground discovered by those motivated by ROI and those motivated by other anti-sprawl objectives will help elevate concerns about unsustainable suburban development in the national discourse, and ultimately lead to transformative action at all levels of governance. The most effective case for traditional development, with budgetary and fiscal issues so prominent in the public mind, will be a financial case. The more urbanists embrace this, the more likely we’ll start unwinding allegiance to sprawl. I think we can all agree that building great places means building places that don’t bankrupt our posterity.