The mission of Strong Towns is to support a model for growth that allows America's towns to become financially strong and resilient.
With foreclosures at record highs competition is high and housing values low. A certain amount of people's income goes to paying for housing. The proportion from their total pay goes up and down. In 2000 houses were 214% above the value that they should have been.
Between 1990 and 2005, consumer spending per capita rose 14%(inflation adjusted), yet retail space per capita rose 100%. We have six times the retail space per capita of any European country. Vacant retail space is up 42% since 2006.
Can we change our current development pattern? In the modern area "Mechanisms of Growth" have included government transfer payments, Federal/State transportation Spending, Debt (both private and public), the Growth Ponzi scheme.
The government transfer payments has not been sustainable. Our priorities have not included infrastructure and community development.
Federal Transportation Spending went into a deficit in 2008. In Minnesota a study was done on a projection on what needs to done to current transportation in the next 20 years. The results were $65 billion was needed and there was only $15 in projected revenue. This means that $50 billion is needed.
Private Sector Debt dwarfs our public sector debt. When General Motors went out of business they lost money making cars but made money financing cars.
Growth Ponzi Scheme induces new growth that solves existing problems. The initial cost to the public for new growth is minimal in respect to the benefit to the public budget for new growth. Either growth continues at ever accelerating rates or the pattern of development ultimately generates more revenue than it costs to maintain.
Mar. Marohn is now going into technical examples including Leewood Lane Street Project. The neighborhood will cost the local government $6,600 per lot. It would take a substantial amount of time to be paid off. Another example, The Afton Hills Road Rehabilitation road maintenance project would be paid off in 79 YEARS. The North Sleuter Road Project to break even in this case they would have to raise property taxes by 25%. An Industrial Park Investment cost $1.9 million for 25 lots served. These are all examples of unsustainable development projects.
An urban industrial park development was built in the mid 1990s it cost $2.1 million inflation adjusted to make the improvements needed.
Backus Wastewater System sewr rehab project would cost the a family the same as their median household income.
Implications for the future:
- The "Mechanisms of Growth" we have become accustomed to are waning
- Local governments are going to be force to absorb the local cost of the current development pattern.
- This can't be done in the current pattern of development without large tax increases and/or large cuts in service.
How do local communities create return on investment for infrastructure?
- Concentrate on High Amenity Areas
- The current path cities are on is not financially stable.
- The future for most cities is not going to resemble the recent past.
- The main determinant of future prosperity for cities will be the ability of local leaders to transform their communities.
1. How does rail service would factor in to the way of life that is discussed?
- We need the rails for future transit. Our trend of building rails to trails might actually hurt our ability to develop the rail system. Small cities are hurt by the lack of rail transportation.
- It is important for infill development to slow down the rate of annexation of small towns. We have lost our concept of growth.
- We do not need to grow, we need to build resiliency.