Adding insult to injury

It is difficult to imagine the story of the traditional commercial block versus the redeveloped, auto-centric commercial block getting any more insulting to our senses. Today I will stretch your imagination.

A timeline of decline.

Decades ago, the Department of Transportation, in the name of growth, builds a highway through a traditional neighborhood. The highway maintains its character -- high speeds, wide lanes, channeled traffic -- despite going through a developed urban neighborhood.

The city embraces the highway and the promise of prosperity it holds. Over the years and at tremendous expense, the city's traffic engineering department converts the local streets to auto-centric corridors, widening lanes, removing on-street parking and eliminating sidewalks.

The city's planning department promotes a "modern" land use code, complete with use-based zoning that reinforces a hierarchy of streets (local/collector/arterial), the need for off-street parking and makes much of the traditional development pattern non-conforming.

The state reinforces the horizontal growth pattern with subsidies for new infrastructure on the periphery and a property tax system that rewards dis-investment and decline with lower rates of taxation.

The federal government adds subsidies for single-family homes, energy and transportation to the mix, further reinforcing the horizontal nature of local growth.

In response, the city's traditional neighborhoods stagnate and decline. The growth that is a natural byproduct of successful is now directed to the periphery. This only reinforces the dependency on the automobile as, perversely, residents of once-walkable neighborhoods with a variety of commercial options are now forced to drive to the periphery.

Further dis-investment. It makes no sense to live in a traditional neighborhood, or own a business in one, if you must drive everywhere anyway. There is no spatial advantage. When a person of modest means can get a larger home, a larger lot and have the same conveniences -- if not more -- outside of town while paying lower taxes, it is rational that they will do so. Why stay? Further decline.

As the transformation from traditional to auto-centric continues, parking becomes more valuable for those establishments that remain. Commercial businesses that in another era would have been expanded or rebuilt at a grander scale as the community grew are now more valuable being demolished for parking. The same thing is happening to the homes throughout these neighborhoods. They are being taken down in favor of garages and "buffering". Neighborhoods originally designed to define space are now becoming space.

These changes are devastating to the tax base. Where the public has made the greatest investments in infrastructure (and has the greatest obligations for maintenance) the neighborhoods stagnate. But nobody has the job of worrying about the tax base throughout the existing neighborhoods. The traffic engineer worries about moving cars. The public works director runs the utilities and is primarily concerned with new connections. The planner administers the zoning code and is particularly zealous about parking ratios.

This all devolves into a farcical feedback loop. More people driving means that more transportation improvements are needed. There is a greater need to channel cars, to control the flow, to improve the capacity of the transportation system. The more the public realm is given over to cars, the more people must drive. The more people that drive, the more cars on the road. Etc. Etc. Etc. Nobody realizes that we're not actually adding cars. We're all just making more trips.

To keep things moving, more automobile capacity is needed. As a society, we've come to believe now that somehow more space dedicated to cars means more growth, even though one can essentially go anywhere at high speeds and reach any location in minutes at any time of day parking just outside the destination. The only way to create more capacity is literally to tear down more of the city.

We'll get it all, eventually. Or die trying.

As the decay accelerates, in a move reminiscent of James Taggert in the book Atlas Shrugged, the local officials look at the owners of the remaining buildings with disgust. They brand them "slum lords", somehow believing that it is they that are causing the decline. (Note that this is a reverse of the way they believe that Walmart is creating the growth -- both are simply reacting to what is given them.) The city goes so far as to create an ordinance limiting the number of rental properties, as if there is some alternative, viable use that the market will magically bring to bear.

So what do we do when we find ourselves in this desperate situation, surrounded by stagnation and decline, a budget stretched to the max and completely at the mercy of aid from outside the community

Do we examine the commercial blocks of our traditional neighborhoods -- the last remnants of the hard work and ingenuity of our ancestors -- and notice that they have actually retained their value -- actually have value greater than their planned replacement -- despite our efforts to destroy them?

Do we examine these same blocks and see that they provide a myriad of opportunities for the many hard-working, entrepreneurial residents of the city?

Do we get professional assistance from people expert in creating value in our community to give us coherent advice on how to start leveraging our remaining resources?

Unfortunately, no.

What we do is turn to our economic development official and ask them to salvage the situation. And we give them a blunt instrument to do it.

Tax. Increment. Financing.

Tax Increment Financing (TIF) is the devil's tool of decline. There are two things necessary to make it "work" (and by "work" I mean as a way to corrupt your community's soul). First, the city must reconfigure as much of the community as possible in an auto centric manner so as to make it very advantageous to develop on bare ground on the edge of town. Then -- and these work together -- the city needs to continue policies that devalue neighborhoods to the point where decent commercial or residential activity is no longer viable.

Once these two conditions exist, TIF can be awarded. Simply demonstrate that it would be cheaper (for the developer at the moment -- not for the taxpayer over multiple life cycles) to build outside of town than to redevelop the blighted property in town and -- bam -- a tax subsidy can be awarded for the difference, if not substantially more, as an enticement to redevelop the blighted property.

Bring in the planner and the engineer to ensure that the new property conforms to the auto-centric design and you have successful redevelopment. Overlook the fact that it took decades of painful decline, millions of dollars of public malinvestment and that the final product creates less value than what would otherwise be there. This is something the politicians can crow about, the public can see improve in short order and the economic development team can put in their annual report.

As we call it in America: progress.

In the case of Brainerd and the two blocks -- one traditional and one auto-centric -- that we have been comparing and contrasting these past two weeks, you can probably guess by now that Taco John's received Tax Increment Financing for their new building. 

So not only is the block with the national chain restaurant valued less than the traditional block of local businesses, it is receiving a tax subsidy for the next 26 years. In the year 2033 the city of Brainerd will begin collecting taxes above and beyond what it collected in 2007 from this property.

All that for drive through tacos.

As a final note, readers should know that to grant TIF an application must pass a "but for" test. "But for" the TIF subsidy, this redevelopment wouldn't happen. When you get beyond the immediate transaction and understand the full picture of what is going on, you realize that this is a little like an alcoholic hitting the bottle and saying, "but for...." TIF is the co-dependent enabler of the suburban experiment.

And our lifestyle clearly makes us the drunk.

I want more than anything for us to sober up and start building value again in our places. We can do it if we want. We have the resources and the capacity. Let's work to make our places into Strong Towns.


If you find this material interesting and would like to know more about how to apply this thinking to your community, join us at the Strong Towns Network, a social enterprise for those working to implement a Strong Towns approach.