Neighborhoods First In Shreveport
In Strong Towns: A Bottom-Up Revolution to Rebuild American Prosperity, I discuss how cities should structure their capital investments—such as investments in infrastructure—to give themselves financially the most upside potential with the least downside risk. Called the “barbell strategy” in investment terminology, the same principle is observable in the traditional development pattern. It involves allocating nearly all of a portfolio to projects that offer low risks and steady returns (primarily maintenance of high-productivity neighborhoods) while using the remaining sliver of capital for venture capital style of investment. I’ve written about the barbell strategy here in the past and had a section on it in the book, including this:
If a barbell investor puts 90% of their portfolio in the safest assets, they have limited their exposure to loss. If everything in the risky end of the portfolio fails disastrously, the most they can lose is 10%. However, if some of those risky investments do well, the upside potential is tremendous. Turn 1 dollar into 10 on the risky end and the portfolio nearly doubles. Turn 1 into 100 and it is transformative.
It’s incredibly sound and pragmatic advice, but I’ve found it difficult for those—especially those close to the game—to grasp what a safe municipal investment looks like (basic maintenance) and then how to do venture capital investments (Tactical Urbanism / Better Block).
The Neighborhoods First presentation I routinely deliver is a focus on this core insight, with an emphasis on taking the next step. It comes from a report I developed while doing some work in my hometown of Brainerd, neighborhood work that itself was a response to local critiques of my Taco John’s analysis.
Last week, I was able to share this presentation—updated with some new insights and information—for an audience of roughly 125 in Shreveport, Louisiana. They were gracious enough to record it with good audio/video and so I’m able to share it here. If you’re interested in the slides, they are publicly available here.
Charles Marohn—known as “Chuck” to friends and colleagues—is the founder and president of Strong Towns. He is a land use planner and civil engineer with decades of experience. He holds a bachelor’s degree in civil engineering and a Master of Urban and Regional Planning, both from the University of Minnesota.
Marohn is the author of Strong Towns: A Bottom-Up Revolution to Rebuild American Prosperity (Wiley, 2019) and Confessions of a Recovering Engineer: Transportation for a Strong Town (Wiley 2021). He hosts the Strong Towns Podcast and is a primary writer for Strong Towns’ web content. He has presented Strong Towns concepts in hundreds of cities and towns across North America.