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Thursday
Feb232012

Friday News Digest

I had an amazing night last night with some very cool New Urbanists from Dallas, Forth Worth and the nearby areas. Our Curbside Chat was in the Texas Theater, the location where Lee Harvey Oswald was arrested hours after the assassination of JFK. (I even sat in the seat he was sitting in, just 'cause it was there.) Not only was the Chat well received but participants had some great local stories and interpretations to add to the mix. And to top it off, they are starting a local NextGen chapter. Thank you, CNU-NTX for making me feel so at home.

Next stop: Austin, where I am informed they have already maxed out their capacity with people who have RSVP'd. I'm really excited to head down there and see what I've been told is a gorgeous town.

Until then, enjoy the week's news: 

  • This past Wednesday I testified at the Minnesota State Capitol giving legislators from the House Property and Local Tax Division a modified Curbside Chat presentation. I had fairly low expectations going in, largely because I've been to the Capitol before and seen how legislators suffer through hours of testimony by frequently zoning it out ("multitasking" would be the positive spin you would put on reading the newspaper, replying to emails and playing solitaire, all while someone is providing testimony). It was really fantastic to not only hold their attention for nearly two hours but to see the bipartisan interest in the Strong Towns message. If you can suffer through some bad audio, this week on the podcast we've uploaded my testimony and then also the fascinating Q&A that followed. I left feeling optimistic.

Thank you to Sally Wakefield of Envision Minnesota for passing on this photo. 

  • Then on Thursday, I had five separate people forward me an article by the League of Minnesota Cities that called the Curbside Chat report "controversial". I must admit that made me really angry. Provocative? Sure. Thought-provoking? No doubt. Pushing boundaries? I can accept that. So explain to me what is "controversial" about a dozen legislators from both parties staying after a long hearing to talk and ask questions? I've delivered the Curbside Chat presentation to well over a thousand people, it has been downloaded by well over 10,000, I've had dozens of radio, television and print interviews and through it all the only ones I've ever seen use the label "controversial" is the League of MN Cities. What makes the report controversial? Is it because we reveal what is actually going on or is it simply because we don't call for an increase in Local Government Aid? This all makes me really upset because cities need to hear this message. If the largest group representing them is going to cavalierly tell their members the Curbside Chat is "controversial", they are dong a massive disservice to the entire state. This needs to be corrected.
  • Thank you to Colin Broderick with the DT106ers for passing on my TEDx talk to your neighbors in Ireland. I'm really honored that you would be reading our stuff from overseas. You analysis of the local example of the square in Dublin was right on. Thanks so much.
  • There have been quite a few people that passed along this article from an executive in Oakland County, MI, who extolled his love for "sprawl". My friends, we have no need to suffer fools. We understand how the Growth Ponzi Scheme creates the illusion of wealth as near term cash advantages are exchanged for long term financial obligations. Let's not waste our time with such ill-informed drivel; there's too much to do in our own communities to get bogged down. Reality will come to bear too soon for all of us, and then we'll actually need some pity for this guy instead of outrage. Stay focused.

"Sprawl" is the  unfortunate pejorative title government planners give to economic development that takes place in areas they can't control. In reality, "sprawl" is new houses, new school buildings, new plants, and new office and retail facilities.  "Sprawl" is new jobs, new hope and the fulfillment of lifelong dreams. It's the American Dream unfolding before your eyes.

  • Jefferson County, AL, is often thought of as an outlier -- an extreme example of corruption and malfeasance -- and that is used to dismiss their current financial problems. The more I learn about their situation, the less I'm comfortable with that explanation. The story here is really just how financially ridiculous our pattern of growth is and how fragile it makes our local governments in time. The only thing that makes Jefferson County an outlier is that the corruption and malfeasance allowed them to drive the car off the cliff that much quicker. I could quote multiple parts of this article in the NY Times, so read the entire thing with Strong Towns eyes and see for yourself how there really is not that much difference between them and other communities across the country.

Jefferson County began to borrow vast sums of money, but that money, it turned out, was a perfect medium for graft and contract-padding. Rather than replacing more than 2,000 miles of decrepit sewer pipes, the county dispensed contracts to build water treatment plants, pumping stations and administrative buildings, some on slag heaps left behind by closed steel mills.

All this debt was supposed to be paid off with revenue from the new sewer system — in other words, by fees the county would charge residents whose homes were hooked up to the system. As the debt grew, so did those fees — and the public outcry. By 2002, the average sewer bill in the county had doubled, to $18 a month.

One thing led to another. In an attempt to expand the system and add new ratepayers, the county tried to bore a giant tunnel beneath the Cahaba River, Birmingham’s main source of drinking water. But the tunnel was so unstable that the endeavor was abandoned. The county spent millions just to extract the boring machine, which had become entombed underground.

“That cost $19 million,” Mr. Young told the bond analysts. “Now it’s called ‘the Tunnel to Nowhere.’ ”

  • Over at our Facebook page this week, we were asked by Max Seigel to report what kind of printer we have. I thought that was an odd question, until he followed up with his analogy, which was fantastic. I pass it along here:

When I bought my computer, it came with a printer costing me no more than $20. At the time I thought “Sweet, free printer!” But since using the printer, I’ve had to frequently purchase ink costing $60 a pop. Over the life-cycle of the printer, I’ve realized I’ve spent more in the printer and ink combined than had I purchased a laser printer costing $250. The upfront costs of a more expensive printer are significant, as is the toner, but I would end up paying less than the subsidized printer in the long run. In other words, I was seduced by the free machine that ended up costing me a lot of money.

Here is the connection to Strong Towns. Federal and State subsidized projects are like the $20 printer. Initially communities think “Sweet, free bridge.” But, once you figure the cost of keeping the bridge in working order, it turns out to be a major expense for communities. This is an expense that if a community couldn’t fund the bridge to begin with, likely wouldn’t have the wherewithal to maintain.

Solution: Purchase the bridge (printer) at full cost, without a subsidy. If you can do that, then you can likely afford the cost of maintenance (ink).

  • If you've felt that spring in your step lately it is likely because this week is National Engineers Week. I really would like one of these shirts so I can "tell the world" that "engineers can save the environment". Too bad I don't have the shirt here in Texas so I could tell that to the world as I drive over the High Five. I'll just have to wait until I get back to Minnesota, where someday I can drive over the federally-"protected" St. Croix river on a new, $700 million bridge. Engineers can save the environment, sure. You'll just have to pay them more (and they won't actually save it, but you'll feel better about yourself).

  • I read this article in my local newspaper and was alarmed when I got to the last paragraph where it suggested that the Coalition of Greater Minnesota Cities was calling for economic development spending in the form of $35 million for building highway interchanges in rural Minnesota. I knew that had to be wrong, so I went to the Coalition's website. Nope, they were quoted correctly. They want the legislature to borrow $35 million to spend building interchanges in rural areas. I wonder if the League of Minnesota Cities finds that proposal controversial? I think the bill should be called the "Walmart/Quik Stop/Mc Donalds Subsidy Act of 2012". It is this antiquated, 1950's mentality that is bankrupting small towns all over this country.
Approximately $35 million in trunk highway bonding for interchange projects in greater
Minnesota where the interchange will promote economic development, increase employment
and improve public safety.  No project specifically earmarked.  Repeal of Motor Vehicle Sales Tax exemption for collector cars will provide the revenue needed to pay for debt service on the
trunk highway bonds.
  • This week at the legislature, I did make the case for a land tax to replace the property tax, specifically in areas where we have made large public investments in sewer and water infrastructure. When I got back to the office, my colleague Justin Burslie asked for more explanation and we decided to shoot my response as some bonus video for the Strong Towns Network. I say "bonus" because right now the curriculum is focusing on infrastructure, not taxation. We'll be switching to zoning next month and transportation after that. If you want to get this type of stuff everyday, as well as interact with lots of people working to implement a Strong Towns approach, come over and join us.

  • The most amazing thing about elevated highway removal is how it costs far, far less money than replacement while simultaneously creating all kinds of value for adjacent neighborhoods. You spend less to get more -- it is an amazingly high-return investment. This article touches on a few examples, including one here in Dallas. In fact, if you are in the Dallas area next month (which I won't be -- too bad), Patrick Kennedy of Walkable DFW will be presenting facts and figures about a potential highway teardown in Fort Worth. The numbers will "blow your mind," he said, and I totally believe him.

For example: Since 1959, San Franciscans had to deal with the elevated Embarcadero Freeway cutting then off from the city’s eastern waterfront (and ruining their view of the Ferry Building). Nonetheless, voters kept rejecting plans to tear it down—until 1989, when an earthquake damaged it beyond repair and forced the city to consider alternatives.

Now instead of an elevated highway, the Embarcadero is a six-lane boulevard flanked by pedestrian walkways 25 feet wide. There are street lights, palm trees and waterfront plazas. Thousands of residential units have gone up, increasing the housing stock by over 50 percent, and jobs in the area have grown by nearly a quarter. The Ferry Building now contains a farmer’s market and retail shops. Neighborhoods in the immediate vicinity have seen a revival, whether they the freeway used to isolate them directly (Rincon Hill) or simply held back the entire area from flourishing (South Beach).

  • While I'm really excited to get Minnesota Twins baseball back into my life (although Twins fans need to be more than concerned about Justin Morneau), I'm enjoying watching the Timberwolves play some feisty basketball as of late. While I was packing for this trip to Texas, I was able to catch the big comeback and last second win against the Jazz this past Wednesday. If you haven't checked them out this year, you should. They are a lot of fun.

Take care, everyone. See you back here on Monday for (I think) the last chapter of our "from the mayor's office" post.

 

Strong Towns is a 501(c)3 non-profit organization. We depend on donations from individuals and organizations to support our effort. If you have the means, please consider making a donation in support of the Strong Towns movement.

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Reader Comments (5)

One wonders if this explains the controversy:

"Cities and county groups were on hand as they had been asked to give updates on unique or interesting shared-services by local governments around the state. Time did not allow for those shared-services presentations, or for the associations to make comments on the report."

Sounds like someone was upset that you were able to score the face time with legislators that they expected to be for them.

February 24, 2012 | Unregistered Commenteraim

Regarding the property tax vs. the land tax - I agree that the land tax would re-align the tax incentives for development. However, I have a few questions. Please note that I'm asking these questions from a Devil's Advocate role - I agree, in one form or another, with almost everything you post on this blog.

First, how would you justify charging the same tax for properties that have noticeably different public service needs? The vacant parcels, even if "developed" with parking lots, would have far less need for police & fire coverage. Shouldn't the vacant properties, with their lower demand for services, have a lower tax bill?

Second, would you implement the land tax everywhere? Even on the urban fringe? What's good for the urban core might not be good for other places. Would a land tax be appropriate for greenfields? If not, then what would be appropriate? If something else would be better, how could the difference in taxation be explained & justified?

Finally, changing the tax code. Oh, boy. I don't want to be a nattering nabob of negativity, but that's quite the BHAG. Especially here in CA, the supposedly "left" coast - where, in reality, many people see Prop 13 as being more sacred than the Holy Prepuce, in the hands of the Pope, on Calvary, on Good Friday. Keep hitting the financial impacts of the current pattern of development. From where I sit - a local land use planner in California - that's where the most headway can be made. Showing, with detailed numbers for "Everycity, USA" examples, that our current growth pattern is heading towards government insolvency. It's the only way to convince a large enough segment of people that change needs to happen. Other arguments will be seen either as a personal choice ("You go live in the 'city' - I'll live in my 5du/acre subdivision, thankyouverymuch."), or will be seen as doomsday bullstuff (Gore/McKibben, Kunstler, Heinberg, et cetera - all very likely valid, but people will deliberately blind themselves to reality until the train is free-falling off the broken trestle.)

Thank you for the work you do, and for the opportunity to comment.

Strangely, the headline labels the Curbside Chat as "controversial" but nothing in the text of the LMC bulletin identifies controversies, just questions and topics. I wouldn't shy away from controversy, however. It is not controversial that cities are in deep budget trouble, nor controversial that we cannot maintain current infrastructure, nor controversial that state and local governments are struggling for solutions. The Curbside Chat message is, I would argue, controversial to the extent that it challenges a deeply held belief about growth and development which will not be discarded easily. I just heard my state legislators talk about cutting taxes and growing our way out of the current economic downturn. I regularly drive past MNDOT's $34 million diverging diamond interchange on Highway 52 at the unbuilt Elk Run Biobusiness Park in Pine Island. You just referred to the call for improvements in rural interchanges. It is controversial to be told that the best direction is not toward bigger, better, more of the same growth. Controversy is an opportunity to educate the status quo folks, generate debate, and (we hope) move ahead.

February 26, 2012 | Unregistered CommenterBetsey Buckheit

You did a great job at the hearing, Chuck! I also appreciate the video talking about the land tax vs. property tax issue. However, I think you may have missed one of the good features of a system like a land tax: it should encourage large parcels of land to be broken up into small ones. Unfortunately, many cities tend to see small parcels get consolidated into very large ones (sometimes even superblocks that take away street grid connections) in the course of redevelopment.

I don't think that a system based purely around land taxes would necessarily be a good idea, but hopefully there are some relatively simple hybrid systems out there that would work fairly well. New tax systems would also need to have phase-in periods -- perhaps even on the order of a decade or two -- so that they don't cause an undue financial shock.

February 26, 2012 | Unregistered CommenterMike Hicks

One thing I don't quite get about the land tax situation. One example given was that people under the current property tax structure would balk at streetscaping or other similar improvements because it would increase their taxes. But this wouldn't be solved with a land tax, it would be an issue in both systems. That beautiful street isn't making your building more valuable, it's making the land/location more valuable. Or am I missing something?

I'm also curious how the land valuation is done in the first place. I know that the land and building improvements are already calculated, but how much "reality" is there to them, especially to the land value? One way to sell suburbanites on a land tax scheme is to point out that being farther from the city center or transit lines means a lower land value, and thus their tax burden will be lower as well.

Do you think that the existing land valuation is properly done? I can see how a blighted inner city neighborhood would have low land values, and thus low taxes. However, would the valuation of that land be tied to its proximity to the city center and access to transportation and other services (thus leading to a high valuation which might discourage redevelopment) or would it be based on the neighborhood's own more self-contained status (thus a low valuation which can encourage development, but then becomes burdensome after the land value is reassessed)?

Of course implementing a land tax must, MUST be accompanied by a parallel relaxation of zoning. The point of a land tax is to get land to be put to its highest and best use by allowing higher density to spread the tax burden among more people/renters/lessees/etc. That can't be done if zoning is restricting that land use.

Maybe the land tax is something worth its own post and further discussion.

February 27, 2012 | Unregistered CommenterJeffrey Jakucyk
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