Why American Cities Are Broke - The Growth Ponzi Scheme [ST03]

> Do you have a citation for this? I don't have a citation for construction costs, and I will concede that there are many factors that may make some low density developments cheaper per unit then some higher density development. However, construction is only part of the picture. Low density development imposes terrible financial costs for cities that contain them. That's because the taxable value per square mile is much lower, but infrastructure (sewer, roads, etc) has the same per-mile maintenance and replacement costs. The infrastructure maintenance costs in many low density developments is often greater then the amount of tax revenue the development generates. For more information on the hidden costs of low density development, I can't recommend this video [1] by Not Just Bikes enough. [1] [this video]

This argument is commonly thrown around, but makes no sense in practice. The denser the place, the more efficient the infrastructure use. 50 families in a single apartment building use massively fewer pipes & power lines than 50 families in single family homes. But the tax revenue for the city can still be the same. In a denser area, those families are less likely to own or need cars, and if they do, they drive less. On the other hand, low-density suburban neighborhoods are often so inefficient that the maintenance cost of their infrastructure is more than the tax revenue the residents bring in. (Here's a good overview of that: [this video] ) It's more true to say that "we don't have the infrastructure for single family homes" than it is to say that we don't have the infrastructure for apartment buildings.

One comment on this is that less dense areas make it very hard to build infrastructure. For example, if there are 10 families living on a mile stretch of road, think of how much it costs to build a mile of road, along with (possibly) water and sewer there. And then the annual maintenance cost. And then the other road networks require to connect that one road, etc. Those 10 families don’t pay nearly enough in taxes to cover the cost of infrastructure maintenance. It relies on grants from state and federal governments, paid for by taxes in dense cities, to cover the expense. My point: sparse is not objectively better. I think the quality of life we have come to expect in suburbs and rural areas is not possible without the taxes gained from also having dense places. More info, and a very interesting video series here: [this video]

Americans seems to abhor car/fuel/etc. taxes to the point that they vote out any politician who dares suggesting anything even approximating that, and as a result they have a huge infrastructure maintenance backlog waiting to pop. Not helped by the fact that suburban sprawl is incredibly expensive to maintain (per the tax revenue the municipality gets) compared to more densely built environments. The "Not Just Bikes" youtube channel has a series of videos on the strongtowns, uh, thingy, that goes into more details. In particular this one describes the financing of suburban infrastructure: [this video]

> Those costs aren't really all that high, and are easily outweighed by the dramatically lower costs in the suburbs. Everything is cheaper there, land, buildings, repairs, goods and services. He's talking about infrastructure cost (how much it costs your municipality to provide the services that you use, like the roads) while you are talking about cost of life (how much it costs you to pay for other things that you need, like food or getting your car serviced). On the infrastructure front, suburbia simply cannot compete with cities. Infrastructure cost is bound to be more efficient where people live in more densely populated areas. The length of pipes that a municipality needs to lay down in order to serve a single family home in the suburbs is the same as a whole 6-story building in the city (the diameters of the pipes might differ). On a per-capita basis, there's no contest. A particular factor in the funding of suburban streets is that the initial paving is often subsidized by the federal government. Once the streets start crumbling down after ~20 years of usage, then the real cost hits. Here's an explanation by Not Just Bikes: [this video]

In large parts of the United States it should affect single-family homes. A lot of cities constructed their suburbs with one-term fees and subsidies, but are charging extremely low taxes on the houses once constructed. In fact, the taxes are so low that they don't pay for the upkeep of the infrastructure required to service those houses. They are losing money on every house and are trying to make up for it in volume! The sole reason they have been able to continue is because the dense urban core is subsidizing the suburbs. But it'll inevitably end up with decrepit and neglected infrastructure, and cities going bankrupt. The only way to solve this is to increase the revenue per land area, which means a higher land tax, which in turn means a bigger tax increase per-person for single-family homes than for multi-family dwellings. If you want to know more, the following NotJustBikes videos are a good introduction of the subject: [this video] [link]

Yes, but, the actual math matters. There are a lot of banal public infrastructure projects that cost much more than the value they create, and there are also theoretically productive public investments that are double-dipping into the same “surplus value.” To illustrate there are many roads that were built in hopes of spurring development and development never occurred, but the roads are maintained anyway at a substantial loss of taxes. And to make a simple hypothetical as you did, suppose the train subsidy creates some surplus, but then the city also runs a bus and a ferry and installs bike lanes all on the same route and all of these are gloriously uncrowded… at this point we’ve probably eaten up all the surplus value and then some. This is hopefully obvious, and yet the excess road building problem is ubiquitous in the US and costing us fortunes.[1] So we can’t just hand-wave and suggest that all infrastructure and all subsidies always create more value than they cost, we have to be critical and especially careful not to pretend that non-financial benefits can pay for real financial costs. 1: [this video]