We have come to see the stagnation and decline of our blocks and neighborhoods as a normal part of the development process. It is not. The normal course of human development is for successful cities to mature incrementally over time. When that occurs, they become financially resilient. To build Strong Towns, a community's emphasis needs to shift from creating growth quickly and easily to building value in a broad and incremental way.

In May of 2000, I took my first trip out of the country. Having grown up in a small town in Central Minnesota, I had seen quite a bit of the United States (excluding major cities, which my parents avoided) but had no idea what a country like Italy was going to be like. In fact, in my naivete, I probably assumed it would look at lot like the United States with a few more churches and some Roman ruins here and there. The truth is, while I had pondered a different culture, it had not occurred to me that the very place would be so different.

As we flew into Milan, someone said we could see the city outside the window. Milan is one of the major cities of Europe -- a cosmopolitan capital -- but when I looked out my window, I didn't see it. Where were the skyscrapers? Where were the highways? The stadium? None of the landmarks I had grown accustomed to seeing in major U.S. cities were visible. Everything just seemed so short.

I'll spare you the story of my awakening, from engineer to planner to Strong Towns advocate, but simply note that this flight into Milan was a major turning point in that story. It took me years of reflection and many trips to the neighborhoods of Milan, Rome, Paris, Amsterdam, Dublin and London, not to mention dozens of small towns throughout Italy, France, England and Ireland, to piece it all together. What I was seeing for the first time in Milan was a city that had progressed through centuries of development. I was looking at a place that had matured.

Last week I polarized our pleasant conversation here by writing the following:

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.

And later in the same piece I wrote:

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.

Why don't we have a Milan here in the United States? Easier still, why don't we have a Stresa (Italy, population 5,000) or an Avignon (France, population 95,000), two cities of immense beauty, character and, I am quite certain, financially able to maintain their basic infrastructure? Years ago, I would have believed it was because our cities were younger and had not had the time these great towns of Europe had. Then I came across this picture of my hometown of Brainerd and realized what had happened.

Everything you see in that picture from 1894 is now gone. In its place are a bunch of parking lots, abandoned buildings and very low rent, marginal establishments. As James Howard Kunstler wrote me once in an email, my hometown -- like so many other American cities -- simply committed suicide.

It was self-inflicted damage, but injury was not the intention. The goal was growth. At Strong Towns we've discussed fairly thoroughly the illusion of wealth our development pattern creates and the workings of the Growth Ponzi Scheme. Today I want to describe what a normal, healthy pattern of development looks like. We'll focus on commercial districts and look at residential neighborhoods later in the week.

Start with the earliest settlement. In the case of my hometown of Brainerd, this photo was taken in 1870. For those with local knowledge, this is Front Street. The sign on the clearest building reads, "Billiard Hall." This is a place in its infancy.

Front Street 1870.jpg

Brainerd, MN. Front Street. 1870In terms of a country making many little bets, a lot of cities at this stage did not mature beyond infancy. That wasn't a problem as there was little wealth wagered at this point (it would be another century before we reached the beginning of the too-big-to-fail approach). Brainerd was one of the cities that did mature further, however. This is how this same street looked a mere 24 years later.

Brainerd 1894.jpg

Brainerd, MN. Front Street. 1894

There are two critical things to note about the changes. First, "maturing" meant horizontal expansion, but it also meant vertical expansion and enhancement. Growth meant that the core of this city increased in value, which prompted both a simultaneous investment in improving the core as well as lesser investments in adjacent properties.

It should be noted that, while the architecture has a distinctive frontier look and feel to it, the layout and intensity of development is very similar to that of the small towns I mentioned above, Stresa and Avignon. In Stresa you will find distinctive Italian architecture and Avignon is the city of the papacy and also has its own distinct character. That being said, someone could be dropped on Brainerd's Front Street in 1894 or in Stresa/Avignon today and get meal, have a drink, find a room, buy some supplies, get a haircut, hire a lawyer, etc... In short, what you see here in 1894 is a perfectly viable place.

At this point then, the maturing process is simply a matter of enhancing the value of the existing properties. In the case of Brainerd, what that meant was that many of the wooden buildings were replaced with buildings made of rock, brick and concrete. Again, the maturing process added to existing investments, simultaneously adding value to existing developed sites as well as new growth on the periphery.

Brainerd Laurel Street.jpg

Brainerd, MN. 6th Street. Believed to be taken in the 1930's.It is important to understand that the maturing didn't simply take place automatically. There were so many things being done to build value in this community. Open spaces that had been reserved near town were now developed as parks. Neighborhoods around these parks were also filling in with residences of all styles and neighborhood businesses. Schools were being built along with other civic infrastructure imbedded in the surrounding neighborhoods. A new county courthouse was constructed in a prominent location using a distinctive architectural style. Incrementally and across a broad spectrum, things were maturing.

It is here that I need to depart from photos of Brainerd for quite obvious reasons. America began its suburban experiment and the maturing process ended. It was no longer the community's objective to incrementally add to the store of value within the community but instead to grow quickly and easily, leveraging the automobile, government transfer payments/incentives and abundant private sector capital to invest in the periphery of town. The traditional parts of Brainerd -- like most American cities large, medium and small -- reflects our change in approach.

Had we continued on the same path, it is hard to say what a city like Brainerd would look like today, but it would be much closer to Stresa and Avigonon than it currently is (and a place like Minneapolis/St. Paul, closer to Milan in its layout). That is what literally thousands of years of human history tells us is the "normal" pattern for cities; an incremental maturing process where prior investments are built on, expanded and enhanced over time. And to understand what a Strong Towns approach means, it is important to realize that an incremental maturing process over a broad community (a) increases the value of the community without (b) significantly increasing the cost of infrastructure or of neighborhood facilities like parks, schools and fire stations.

In the suburban experiment  we've gone the other way with our public balance sheet. Our historic tax base has not matured but has stagnated or declined. We've made up for that with new growth through horizontal expansion, but the increase in value with that approach has been accompanied by huge increases in long-term public expenses. It is not financially sustainable.

It was my original plan to discuss how we reverse this trend, but last week's interlude (and subsequent discussion) on Tax Increment Financing (TIF) got in the way. I'm going to get to "solutions" soon, but first let me try to build the bridge from what we've been talking about so far this year (a comparison of the traditional commercial block and the auto-oriented commercial block) to where we need to go to fix this.

We have to stop looking at the stagnation and decline of our blocks and neighborhoods as a normal part of the development process. It is not. Yes, there are certainly parts of Milan, Stresa and Avignon -- as well as historic Brainerd -- that experience periods of stagnation and decline, but these are isolated areas and the decline is not persistent. The normal course of human development is for successful cities to continue to mature incrementally over time. When that occurs, they become financially resilient and are able to withstand periods of macro-stagnation without falling apart.

Now here's the mental bridge: To build Strong Towns, a community's emphasis needs to shift from creating growth quickly and easily to building value in a broad and incremental way. 

That's my core problem with TIF, and I acknowledge that it's more intellectual than it is substantive. TIF is a short cut. Yes it builds value, but as a short cut, it doesn't do it in a broad, incremental and ultimately sustainable way. It doesn't require us to think through and come to grips with the reasons for the decline that makes the tax increment transaction possible. It allows us to continue the suburban experiment believing -- or at least not disbelieving -- that the failure of properties, and subsequent "rescue" through a tax subsidy, is a natural course of action. Failure is prerequisite for a successful TIF project. Today it may be a necessary evil, but it is an evil nonetheless.

Now I will grant that this is an intellectual argument I'm having with the choir. We're all going to be singing from the same page when we're talking about using TIF to revitalize an historic downtown or cleaning up a contaminated site. But for the sake of what is coming next, I really need people to understand what I wrote last Wednesday.

Use TIF if you must, but we should be shaking our heads in shame when we have to, not congratulating ourselves on our resourcefulness and innovation.

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