Who's Subsidizing Who?

Anthony Kalvans

San Miguel is a small town in San Luis Obispo County, California—not even a town technically, but a “Community Services District” (CSD). It’s one of the poorest communities in the county and often gets called “the ghetto,” according to the Vice President of San Miguel’s Board of Directors, Anthony Kalvans.  

But San Miguel is also working hard to become a strong town. By doing the math on how productive their developments are (and whether those developments are able to cover the public costs they incur), by taking small steps to make their downtown more inviting, and by intentionally planning for the future of the community in a way that fully engages residents, Kalvans has been moving his town in the direction of resilience.

Kalvans started reading Strong Towns a few years ago and joined as a Strong Towns member in early 2020.  He regularly attends Strong Towns webcasts and read Charles Marohn’s recent book, Strong Towns: A Bottom-Up Revolution to Rebuild American Prosperity.

He specifically cites several Strong Towns articles as important guides in his work to make San Miguel more resilient, including “Poor Neighborhoods Make the Best Investments,” The Growth Ponzi Scheme series, and “Most Public Engagement is Worthless.”

After plugging into the Strong Towns movement, Kalvans was inspired to conduct a “value per acre” analysis on different neighborhoods in San Miguel, as well as some specific businesses in his community.  (Get instructions for doing your own analysis here.) This research helped him to see that the suburban style developments in his community were costing far more than they were contributing to the city budget, and he shared this crucial information with fellow San Miguel leaders.

Significantly, an analysis Kalvans conducted of the tax value per acre for different neighborhoods in San Miguel revealed that Jazzytown, an area with smaller homes and denser lots, is producing nearly $3.8 million in value per acre, while the most suburban style neighborhood (San Lawrence Terrace), where lots are an acre or larger, is producing a meager $183,798 tax value per acre. Jazzytown occupies just 5 acres of the city. San Lawrence Terrace takes up more than 70. The comparison is staggering, especially when you consider the vast amount of infrastructure needed just to keep that spread-out suburban area fed with water, electricity and roads.

The small rectangle in the top left corner is Jazzytown. The large rectangle in the bottom right is San Lawrence Terrace.

Take water, for example. Kalvans reports that San Lawrence Terrace (SLT) has 70 homes paying for water services, uses 8 miles of water line and currently needs about $1.8 million in water infrastructure updates. As Kalvans writes in a memo, “If, starting today, all of the money collected from the SLT Area went into these two projects, it would take 21 years to pay for this.”  

In contrast, the more compact Jazzytown has 58 homes using just 1 mile of water infrastructure.  In other words, San Lawrence Terrace has just under 9 homes served by every mile of water line, while Jazzytown serves more than 7 times that.

“If both these neighborhoods are paying the same exact [water] rate, who’s subsidizing who?” Kalvans points out.  He says that some local officials want the town to keep growing, but the numbers show that this type of growth is simply not fiscally sustainable. As San Miguel looks to its future, Strong Towns member Kalvan is working to hard to make sure their plans will pave a path toward financial resilience, not failure.

Instead of developing a traditional strategic plan or master plan, Kalvans proposed creating what he calls a “Community Reinvestment Empowerment Services Toolkit,” (CREST, for short), based on the Strong Towns approach.  As Kalvans shared in a presentation to local leaders, the CREST will:

• Identify small low-cost projects that the CSD could easily act on

• Develop tools for building community wealth in underperforming neighborhoods

• Empower the community with buy-in

• Empower the CSD Staff and Board with the flexibility to innovate and prepare for future challenges to the district.

• Encourage innovation in the community.

• Make the community and CSD more fiscally resilient.

• Set a clear vision and mission for the San Miguel CSD

Kalvans shares a presentation about CREST with fellow city leaders.

Unlike a typical strategic plan, which, Kalvans notes, can often sit on a shelf gathering dust for years, he wants this Toolkit to be accessible to every resident in his town and be based on taking action now to make the community more financially strong. The city can prioritize which neighborhoods to focus on based on their value per acre.

Kalvans says he was inspired by Strong Towns’ “Neighborhoods First” report which is only about 30 pages (unlike the standard thousand-page strategic plan), but covers so many small-scale, incremental steps that would make a town more financially resilient. 

San Miguel has begun some of those small steps already.  One project they spearheaded this summer was an effort to clean up the downtown, getting rid of weeds, updating lighting and improving the landscaping.  Not only did this make the space more attractive, it also helped avoid flooding due to irrigation problems (something the city has experienced in the past, Kalvans says).  “This is an example of a small project that didn’t cost us much and now people want to spend time downtown,” Kalvans explains.

Another small project he’s eyeing is an effort to better connect San Miguel’s historic mission district and its downtown. “A residential neighborhood disconnects our tourist area from our downtown,” says Kalvans.  This means that tourists are not as easily drawn to downtown businesses.  Kalvans says he’s thinking about doing a “walk audit” to help his community get a better sense of gaps in pedestrian infrastructure.

As the city shifts toward this a planning process, Kalvans is also hopeful that citizen engagement is shifting to be more representative of the San Miguel population.  Kalvans is seeing more young people and Latinos (who make up about 50% of San Miguel) show up at public meetings and run for office. 

Kalvans’ message for communities like his that are often seen by outsiders only as poor or neglected is, “You don’t have to be a fancy, well-off place. You can make things happen, too.”

---

This is Member Week at Strong Towns. Every time you advocate for change in your community, thousands of us are standing with you. Imagine what would be possible if there were thousands more. Consider becoming a sustaining member today.

---