Rathke: Strong towns: Investing in old, lower-value neighborhoods, not more infrastructure

New Orleans       On the sometimes lonely march to try to advance and rebuild low-and-moderate income communities, it’s always a welcome relief to stumble on fellow travelers moving on much the same pathway.  At least that’s how I felt preparing to interview Chuck Marohn for Wade’s World, the author of Strong Towns:  Bottom-Up Revolution to Rebuild American Prosperity and the president and co-founder of the nonprofit also called Strong Towns.

Marohn argues against the grain of the pro-development at any price crowd as well as the infrastructure ideologues both of which to his engineer’s mind, just don’t add up.  It resonated with me when he offered an example of the added value on every bottom line of investing that is achieved putting money into lower income neighborhoods where fixing streets, sidewalks, and simple maintenance could increase the value of a family’s home and citizen wealth from $50,000 to $55,000, a ten percent jump.  He compared this to a municipality supporting a suburban or new development of $250,000 and above homes where they had to build all of the streets and infrastructure, lay the water and sewer lines, and everything else, which would never pay back, and in thirty years would need to be replaced again.  Similarly, he knocked the fake urban incentive plans and gave an example from his town in Minnesota where they essentially gave a 25-year tax break to move a fast food operation three block, getting nothing from the move and creating abandonment and less value in the former area.  Amen and hallelujah!

When it comes to roads and other big infrastructure projects, he states flatly that we could not build or expand another highway for decades and still have more road capacity than we need.  I thought of ACORN’s fight against the intercity expressway in Little Rock, then the Wilbur Mills and now the I-630, and a number of similar highway projects, including recent proposals in New Orleans 9th ward, and wished we had had him with us when we needed him then.  Our endless fights against the expansion of the Industrial Canal in New Orleans are another example, but they are endless.

Part of Marohn’s argument is that the so-called cost-benefit claims of many of these projects are fake-math as I called it, and that he called almost too kind.  The way bond markets, Wall Street, and the feds have hornswoggled cities and towns is their successful lobbying of accounting standards that makes water lines and miles of roads “assets,” as if they were producing income and revenue for a city, rather than depreciating liabilities that require constant maintenance and replacement without an income stream that supports the cost. An investment in a block of residential houses that produces more tax revenues on the other hand is usually recorded as a liability, despite the change in value.  Similarly, Marhon made a devastating argument that the math behind loss work time because of traffic and job creation through construction which are used to support highway development are totally specious, because there is no relationship to the saved minute on a commute necessarily creating addition income at all, much less for the various levels of government paying the bill.

You get the message, Strong Towns, organization and book, are worth a good luck, forcing these arguments into the public policy and budgetary debates around the country.  Recently, a real estate developer was elected as the new mayor of Nashville on campaign promises to end business incentives and to slow down or manage growth better for existing citizens.   Maybe change is coming?  If we can redirect this energy and dollars from the shiny new things to rehab and restoration of our existing neighborhoods and facilities, we will have a win for all of us.

You can check out Wade’s recent past posts here Chief Organizer Reports. And you can link to his website here Chief Organizer ACORN/ACORN International.