The Growth Ponzi Scheme

 

By Dom Nozzi

October 15, 2016

In Charles Marohn’s 2012 book, Thoughts on Building Strong Towns, we find a five-part essay about how suburban growth is an unsustainable Ponzi Scheme.

New suburban development initially costs little for local government, infrastructure like roads is built by the developer then handed over to local government for free, and tax revenue starts flowing in quickly. Looks like a great deal.

Initially.

But what is not well understood is that the long term maintenance and repair cost is huge. And the tax revenue from the low-density development comes nowhere near paying for the ongoing costs for those roads and sewers. The “solution” has been to try to endlessly promote even MORE suburban growth. The revenue from the new growth is used to pay for the old growth. But endless new suburban growth is impossible. Particularly in Boulder and Boulder County.

The result of having new growth pay for old growth is a classic Ponzi Scheme.

Could the road funding controversy in Boulder County be at least partly explained by Marohn’s Growth Ponzi Scheme?

Compact, slower speed, human-scaled urban development creates wealth. Lower density, higher speed, car-scaled suburban development destroys wealth.

How can suburban development pay for itself? We can start, implies Marohn, by nearly doubling property (and other) taxes in new suburban neighborhoods.

Since this is not politically feasible, the future will be, shall we say, challenging.

Advertisements

Leave a comment

Filed under Politics, Sprawl, Suburbia, Urban Design

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s