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Measuring Productivity

In an age of austerity, we need to make our public investments go further. No longer is it acceptable to simply analyze public projects in one dimension, such as cash flow or job creation. Our projects need to leverage our limited revenue to do all that and much, much more. Our top priority today needs to be on making our places more productive.

Thank you to everyone who engaged with us on our two "Infrastructure Cult" pieces last week. The response was overwhelming and I apologize to those who have emailed me and have yet to hear back. We're working on it and some other things soon to be released. Thank you for joining us here each week and for all of your support of the Strong Towns movement.

In last week's Friday News Digest, I wrote about the work of Joe Minicozzi, whose speech from CNU 19 I had included in an earlier podcast. While we at Strong Towns often start with the public cost for infrastructure and then compare that to the revenue yield from the property it serves, Minicozzi comes at the productivity equation from a different -- and thought provoking -- angle.

Let me share an analogy from Minicozzi's CNU talk: When we look at the productivity of a car, we measure it in miles per gallon. The question we ask is, how many miles does a car travel per gallon of gas used? We are comfortable with this approach because it is vastly more logical than a miles per tank calculation. Nobody asks: how many miles can I travel on one tank of gas? We all understand that, while a Hummer may have a bigger gas tank than a Honda Civic, it does not make nearly as productive use of gasoline.

Cities often vigorously pursue that large business -- think Wal-Mart -- instead of the small ma-and-pa shop under the guise that the large business is going to generate more tax base. The same with the big house in the suburban subdivision. That sheetrock palace is paying a lot more tax than the little house on the city block. Isn't it logical that a city will be better off if they have more of these large businesses and homes?

Minicozzi's analogy would suggest that revenue per lot is a poor measure of success. The large business may provide a lot of tax base, but it also chews up a lot of land and requires a lot of infrastructure. Same with the house on the large lot. A better way to measure success, and true productivity, would be to look at the tax base on a per acre basis.

Seem abstract? Let me give you a real example.

At my other job with Community Growth Institute, we are working with the City of Pequot Lakes, MN, to expand their Grow Zone, an area in town where we helped establish a form-based code two years ago as part of a plan to promote business development. Last month we analyzed two streets that had just been reconstructed as part of a routine city maintenance project. What we found affirms Minicozzi's premise.

2nd Street in Pequot Lakes, MN.

The street reconstruction cost $180/foot. These costs were actual construction costs from 2010, so there is nothing theoretical about them. The tax base calculations were based on (1) the city's current budget, (2) the city's current tax rates and (3) the actual assessed value for each property. We assumed a 20-year life span for the street and put the total revenues collected over that period of time into a present value (at 4% for anyone interested). The results reveal two streets in the heart of the city's downtown that are not even close to being productive.

Street #1

  • Total cost for street reconstruction: $104,400
  • Total revenue collected for maintenance over one life cycle: $23,400
  • Revenue gap in current configuration: ($81,000)
  • Percent of project covered by adjacent tax base: 22%

Street #2

  • Total cost for street reconstruction: $126,000
  • Total revenue collected for maintenance over one life cycle: $50,000
  • Revenue gap in current configuration: ($76,000)
  • Percent of project covered by adjacent tax base: 40%

These are streets -- especially Street #2 -- that, if you asked a local to name the five most productive streets in town, would assuredly be on the list. It has some of the largest businesses and the town's major employers. Even so, the taxes collected from the adjacent properties are not even remotely close to covering the basic maintenance costs of the streets that serve them.

The premise of our work there is not just identifying this imbalance, but solving it. The standard "miles per tank" approach would suggest that we seek to attract another large business to locate along this street. That would be the wrong move.

In the spirit of Minicozzi's work, we analyzed the yield from each property along the streets. The one with the highest total value is also one of the city's largest employer and a business that the community values greatly (with good reason). It consumes five acres in the heart of downtown and, while it pays over $14,000 per year in property tax to the city, the yield is only $2,860/acre.

Major business in downtown Pequot Lakes. Tax yield: $2,860/acre.

In contrast, a small little shop that had lost its tenant and was currently sitting vacant -- a place that, quite frankly, nobody in the city government much values -- paid only $1,200 per year in property tax. However, it only consumed a quarter of an acre. Its yield: $4,960/ acre.

Vacant business in downtown Pequot Lakes, MN. Tax yield: $4,960/acre.

To be successful, the City of Pequot Lakes does not need to attract another large employer to build a new business. All it needs to do is get this run down little shop reactivated -- something that is actually much easier to do -- and then create an environment that would allow 20 more of them to be built along this same street. This is also doable over a longer time horizon. When all you need are a bunch of these modest-sized establishments, all of a sudden there is tons of room for growth.

I can already hear the chorus of objections from the "jobs first" crowd. They will say that the low-yielding, big business is creating a lot of jobs -- many of them high-paying -- and this little shop, even on a good day, will create few. They will argue that economic development is all about job creation and so focusing on this small end of the spectrum is missing the point.

I could question the basis of that assumption, but instead let me point out the obvious fact that always makes these economic development people angry. From the city's perspective, there could be a thousand jobs at that business and a billion dollars worth a sales run through there. None of that will change the property value and thus none of it has any bearing on this city's revenue. You can argue that tax laws should be changed to provide for a local income tax and a local sales tax (some places have one or both of these, but not Pequot Lakes), but until that happens, the only way this street pays for itself is by becoming more productive from a tax base standpoint.

That is not to say that jobs are not important. They are. But they are one factor in many. We can spend a million dollars to attract or create a job, but if that job doesn't generate any financial return to the community, it is going to be hard to repeat that effort. In an age of austerity, we need to make our public investments go further. 

This brings me to a final, obvious question: If these streets are not productive, why are we building them this way? There is a long answer to that (and I am currently working on a book proposal to answer it), but the short version is this: we've not had to bother about productivity until now. Since the end of World War II, we've been so wealthy and had so much growth that, for most parts of the country, the productivity of our places did not matter much. If it created a job, it was good. If it brought in a new business, it was good. We didn't ever pause to worry about what happens when the maintenance bill comes due.

Those bills are due now, and more are arriving each day. We don't have anywhere near the money to maintain so many unproductive places. What we face is a choice between a chaotic reset or a strategic contraction -- one where we intentionally divert our limited resources into those endeavors that are most productive while we seek -- block by block and neighborhood by neighborhood -- to improve the productivity of our places.

At least, I'm optimistic that we still have time to choose.

 

Additional Reading

 

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More than just a bike lane....

I recently had the chance to apply the principles of a Strong Town to a project I worked on in my real day job at Community Growth Institute. CGI had been asked by the City of Perham, MN -- a small town of around 2,500 in Central Minnesota -- to examine one street and make some recommendations on how it could be modified to accommodate bike traffic. Their request for proposals was actually targeted to engineering firms, but we latched on to it as a way to have a deeper dialog on how to create value in an otherwise straightforward project.

I don't share a lot of what we do at Community Growth Institute here on the blog (probably should), but I wanted to get our readers connected to this report for a couple of reasons. First, I'd love the critical feedback from the intelligent group we have here. I can't say that bike lanes are my specialty, so particularly you cyclists, I welcome your critique.

More importantly, we talk a lot in theory on this blog about how to create more valuable places. This report does a good job (IMO) of  connecting those concepts to an actual street. We provide a lot of background information, some technical analysis and then ultimately connect the addition of bike lanes -- and the restoration of the historical development pattern -- to the financial health of the community.

This report is now property of the City of Perham, which means it is public information. Feel free to copy anything from it that you can use in your community.

The following is a brief excerpt:

....

2. Understanding Perham’s Layout

The original layout of the City of Perham follows a traditional pattern of placemaking found in cities across the world. This is a pattern that was adopted by the earliest civilizations and has been refined throughout the centuries. It is an approach that seeks to maximize value and return-on-investment by creating a human habitat that is designed to improve over time. Understanding the intentions of Perham’s founders is important to recapturing lost value throughout the community.

It is important to understand that Perham was originally designed around values and principles much different than what exists today. As manifested in early Perham, the historic pattern of development has five main components: the grid layout, wide streets, purposeful views, the intentional sense-of-place and connections between neighborhoods.

The Grid Layout 

The grid layout has its origins with the first cities in ancient Mesopotamia. These places developed a less-rigid block structure within fortified walls. This approach can still be seen in the historic sections of very old towns, such as Paris or Rome.

In the United States, most of the early settlements took advantage of improvements to surveying methods and established along a grid pattern. As settlement went further west, the ease of surveying a grid made it the standard approach to development surrounding railroad stops. Nearly all Midwestern cities established during the 1800’s, including Perham, have a historic grid layout at their core. 

Just prior to the Great Depression, as automobiles were starting to become more prevalent, and then following World War II when auto ownership became ubiquitous, the grid design was largely replaced by the curvilinear, suburban design.  The historic districts of many cities, such as Perham, are now surrounded by suburban-style development. The streets in the grid pattern have been subsequently retrofitted for automobile travel. Accommodating automobiles is now the primary design criteria for the public right-of-way in most cities.

Besides the ease of surveying, the grid pattern provides a number of design advantages that were important in an era prior to automobile-base design. The public realm (the space between buildings now devoted largely to automobiles) provided space for social interaction. The orientation of the homes towards the public realm increased security. Mobility for pedestrians was enhanced by the connectivity of the grid. Most importantly, the grid provided a platform that could grow over time as the community matured.

Sense of Place

The social space of the public realm was created by a design that emphasized the value of that space. The layout and spacing of the buildings created what has been called a “sense-of-place”. This is a design technique that also goes back to ancient times.

Sense-of-place is easy to understand and identify. A room has a sense-of-place. When you are in a room, it is clear that you are in a place. The feature that gives the room this feeling is the walls. Without walls, the room would not exist and there would be no “place”.

So it is with the public realm. When the buildings on either side of the public space line up and form walls, the public space feels like a room and there is a sense-of-place. The primary design element is to make sure that buildings are properly spaced. If the public space is too narrow because the buildings are too close, the space will feel cramped and the sense-of-place will be lost. If the public space is too vast because the buildings that bound it are too far apart, the effect of the walls will be gone and there will be no sense-of-place.

There is a standard design ratio to obtaining sense-of-place that is captured in the layout of Perham. That ratio of the width of the public realm to the height of the buildings must fall between 3:1 and 6:1. This is how that looks in a residential neighborhood, which in Perham’s case falls close to the upper limit of 6:1.

This is how the ratio is applied in a commercial neighborhood, which in Perham’s case measures close to the lower limit of 3:1.

In the historical parts of Perham, the public realm was scaled and the buildings placed with the intention of creating this sense-of-place. This would not have been a special design criteria – it was simply the standard approach for the period.

....

Read the entire Perham SHIP report at the Community Growth Institute web site

 

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Inside Stuff, A Single Recipe

Strong Towns is a joint collaboration between Community Growth Institute and Donjek Reinvestment Strategies. Both organizations have long embraced the need to change the traditional approach to growth and development, CGI largely from a land use and engineering perspective and Donjek primarily from a financial viewpoint. Strong Towns has given us a vehicle to discuss these issues and advocate for a different perspective.

The last time CGI developed a new advertisement I previewed it here for STB readers on one of our off-days (we post at least Monday, Wednesday and Friday each week). I'm going to preview our next ad here as one of our regular postings because it contains a Strong Towns message.

"Communities should not be made from a single recipe."

This ad touches on something basic. None of us want to live in a cookie-cutter world. We want to live someplace unique, and so we do things to our homes and yards to express that they are uniquely ours. This is a natural human reaction. 

But look beyond the individual homes and see the pattern of development - the recipe - that all of our communities are now being built. It is the same, auto-centric, Euclidean-based model. We separate uses from each other and connect them with a network of local, collector and arterial streets. It is the same everywhere you go, with a few small exceptions.

One exception you can easily find to study is the historic downtown of any small town. Go there and you will see the vestiges of a different recipe, this one a rail-oriented approach where development was grouped within walking distance of a railroad stop. You may have to use your imagination - most of our small towns have been devolving in the auto-era based on the new recipe so the remnants of the old town are sometimes hard to see.

You can also study the photos and captions from our tour of Celebration, Florida that we posted on our Facebook site. Celebration is a different recipe based on the concepts of New Urbanism.

If you start to critically examine the layout, form and function of our communities, you will realize that they are nearly all made from the same recipe. If you continue to read this blog, you will also grow to realize that this recipe is very, very expensive and provides minimal return on the investment.

So why do we keep doing it?

It is time we demand that our communities provide us value greater than the sum of their parts, or at least as much as the investments we put into them. It is time for a new recipe.

 

You can continue this Strong Towns conversation by posting a comment or by joining us on Facebook. You can also follow Strong Towns on Twitter. We appreciate all of the feedback and support.

Celebration in Photos

Last week I went with some of my colleagues at Community Growth Institute on a two-day retreat so that they could see what I consider to be a brilliant application of neighborhood design principles. While you can study good design through text and pictures, immersion it is a completely different  - and most beneficial - experience. With that in mind, one of the stops our team from Minnesota made was in Celebration, Florida.

By way of some context, at Strong Towns we are advocates of making better use of our massive infrastructure investments. Increasing our public Return on Investment (ROI), so to speak. While there are a lot of elements to this, in more cases than not it includes increasing the density of our current development pattern.

When you start talking at a public meeting about increasing density, the typical reaction is fairly negative. And understandably so. If you look at our current development pattern - which most people would agree is uninspiring at best and depressingly ugly at worst - and then imagine squishing it closer together, it is not a pretty sight.

If all you know is our modern pattern of development, you can't imagine more density. Low density is the way we all "escape" the blight that is the American public realm. The reason people commute for hours in congested traffic through miles of asphalt and billboards is because at the end of it all is their own private oasis. Their own personal place where they can escape the blight of the landscape they travel day after day. We all understand this. It is the current version of the American dream.

The only problem is, we can't afford this style of living any longer.

If more density in our development pattern is financially inevitable, than we have two choices. We either choose to live in a harsher reality, or we adopt a new and affordable development pattern that provides a higher quality of life, even with a greater density. At Strong Towns, we choose the latter.

Our Placemaking Principles for Strong Towns are a place to start to envision a new model. Another place is on Facebook where, on the Community Growth Institute fan page, we have posted pictures along with a frame-by-frame narrative of our recent walking tour of Celebration.

For those of you not on Facebook, I'll post some of those photos here over the coming months as part of our ongoing Brainerd/Baxter Strong Town series as a way to contrast the harsh elements most of us encounter in our daily lives with those present in a well-designed community. And if you are interested, Community Growth Institute and Strong Towns are planning to offer an annual tour for placemakers of sites like Celebration. If you want to receive information on our 2010 tour, you can email me at marohn@strongtowns.org.

One other fun fact about Celebration: When we were envisioning the streetscape for the ideal town we feature on our home page, we incorporated a bit of Celebration's Market Street. Here is how it looked last week.

Market Street in Celebration, Florida

Pequot Lakes Resolved

The post answering Monday's questions was put on hold as I was forced to do something last night I normally don't do: sleep. Sorry Strong Town advocates. We've got a lot in the works here - announcement to come soon - and so I have been stretched a little thin. I'll shoot for Thursday for the next posting in the Brainerd/Baxter ST series. In the meantime, I wanted to pass on this resolution, which was approved by the Pequot Lakes council last night, as well as the Strong Town analysis that prompted it. 

To give the short version, the highway through Pequot Lakes is being realigned outside of town. As per America's recent development pattern, some were advocating for a commercial zoning along this corridor and the extension of municipal utilities to promote commercial growth. As the analysis shows, this financially is a huge loser for the city. There is no way that new development in this corridor - even if it did happen in the most robust manner - would come close to paying for the upfront costs of the city.

Congratulations, Pequot Lakes, on a Strong decision.

 

RESOLUTION REGARDING THE ZONING OF PROPERTY ALONG THE TH 371 ALTERNATE ALIGNMENT

WHEREAS, the City of Pequot Lakes, through numerous resolutions, has demonstrated a commitment to the realignment of Highway 371 (Alternate Alignment) to the east of the current alignment, and  

WHEREAS, the future zoning along the Alternate Alignment has the potential to dramatically alter land use patterns and real estate investments throughout the City, and

WHEREAS, uncertainty over the future zoning along the Alternate Alignment adds to uncertainty in the economy as a whole and, in expanding uncertainty, discourages solid, long-term investment in the community, and

WHEREAS, the City of Pequot Lakes needs quality commercial and industrial investment to build a solid tax base, create jobs and grow the local economy, and

WHEREAS, attracting quality commercial and industrial investments requires a business-friendly regulatory environment, a stable rate of taxation and certainty over the future direction of the community, and

WHEREAS, the Planning Commission has undertaken a study of zoning alternatives for the Alternate Alignment and found that:

  1. Extending sewer and water infrastructure to the Alternate Alignment, and maintaining that infrastructure over time, would cost the City of Pequot Lakes significantly more money than can reasonably be expected to be recovered through additional tax base induced by the investment, and
  2. Zoning properties along the Alternate Alignment for new commercial or industrial growth without extending infrastructure would only induce low-value investments and would detract from the significant investments that have already been made within the community, and
  3. The City of Pequot Lakes has already made significant infrastructure investments and commitments throughout the community, almost all of which is under-utilized, yet must be maintained by current taxpayers, and
  4. A policy of maximizing the return on current infrastructure investments is necessary to pay for the maintenance of that infrastructure over the long term, and

WHEREAS, the vision of an economically strong downtown Pequot Lakes surrounded by equally strong and vibrant neighborhoods requires a clear and consistent approach to land use.

THEREFORE BE IT RESOLVED that the City of Pequot Lakes is committed to maintaining the current low-density zoning designations along the Alternate Alignment and, with that in mind, encourages potential commercial and industrial investors to proceed with confidence that this commitment is broadly supported throughout the community.

Rethinking Rural Character

As a Thursday bonus, I wanted to send along a copy of a report I recently put together for the City of East Gull Lake, where Community Growth Institute has not only served as City Planner for the last ten years but where my family and I have lived since 1996. This gives me some liberty to use real examples since I can pick on myself. Some of the information I'm passing on here was originally developed for this blog, and I'll link that in. It is a small example of how the Strong Town discussion is becoming part of the larger debate.

....

In the past decade, city officials have debated off-lake development densities. The debate has often been between 2.5-acre and 5-acre lot sizes, the former being preferred ultimately because of the flexibility it provided the landowner. Support for this development approach has been based on a number of specific values: 

  • The community preference for the low-density development pattern of 2.5 and 5 acre lots.
  • Protecting the right of a property owner to develop their property in a reasonable way.
  • The desire to promote growth and development throughout the community. 

The last decade has also seen some developments built in this style that have been less than successful in the market. That would include:

  • Maplewood Ridge (10 of 14 lots vacant)
  • Gull Meadow Estates (9 of 11 lots vacant)
  • Ruth Lake Estates (10 of 11 lots vacant)

Currently there is a glut in the market for off-lake lots. The CGI Planning Team has analyzed sales and marketing data and estimated that the Brainerd Lakes Area has in a best-case at least ten years and, if we have truly adjusted to a “new norm”, potentially over thirty years worth of vacant, off-lake lots available in the market today.

Each of these failed developments in East Gull Lake has roads that are being maintained by the city, yet the city collects minimal amounts of property tax from the undeveloped lots. That means the general taxpayer is subsidizing these developments.

We have also come to understand that, even if the developments were successful, the property tax collected by the city from the properties is a fraction of the cost to maintain the infrastructure that serves them. A handout was provided in last month’s packet that showed how the tax revenue from City Planner Charles Marohn’s house on Leewood Drive would take 37 years to pay for that property’s share of the road cost. The entire $252 received in city tax in 2010 from the Marohn property would not even cover the cost of snowplowing a proportional share of the road that serves it.

Of the three community values listed as supporting the 2.5 and 5-acre off-lake development pattern, the desire for growth and development has its root in the belief that new growth will generate additional property tax that, in turn, will lower overall tax rates. For off-lake development in East Gull Lake, the opposite is happening. Each new development that adds roads will cost taxpayers more to maintain than is gained in new tax revenue, even if the development is successful.

This brings up a fourth community value: the desire to maintain a fair rate of taxation.

How do the remaining two pro-development values – the rights of the property owner to develop and the desire for the 2.5 and 5-acre development pattern – weigh against the desire to keep taxes low?

  • Are the residents of East Gull Lake willing to continue to develop in this way when each new development causes an increase in the overall tax rate?
  • Would residents prefer to require new developments to be cost-effective, which would effectively mean that – at current lot sizes – no new developments would happen off-lake unless they were along existing roads and contained no new municipal infrastructure?
  • Would residents want to consider more-intensive styles of development that would generate more tax revenue if those styles were not traditionally compatible with the character of the community (for example, high-density housing in our off-lake residential neighborhoods)?

The City’s Comprehensive Plan does not suggest how to resolve this clash of values. The outcome of this discussion should ultimately lead to amendments to the plan that would clarify the direction of the City.

Community Growth Institute, Inside Stuff

On one of our off-days for blogging this week I wanted to share some inside happenings here at Community Growth Institute. Next year will be our tenth year in business, which statistically means we are here to stay. We've managed to make it the entire time with the same website, hardly any marketing and no advertising. Our growth has been near exclusively based on word-of-mouth, which is the best kind.

As we've toiled in the trenches for nearly a decade, we have not lost sight of the notion that we are inspired to be agents of change. And not just change on a local scale but, the more we examine what we see going on nationwide, the more committed we are to broad, systematic change for Small Town America. This blog (and your ongoing feedback) are part of a refinement process for us to ramp our urgent message up to a broader audience.

As part of that, we are starting to do some active outreach, including a modest advertising campaign that kicks off with this ad that I wanted to share with our readers. Kudos to the artistic genius of Michael Kooiman for the idea and the amazing work.  

News Brief, Form Based Code in Miami

The week before last we wrote a couple of short news briefs (and, thanks to a bad, lingering cold did not put out a Friday News Digest). The first was on Streets We Can't Afford and the second was on Dollar Devaluation. We tied these into small towns by pointing out that rural communities typically have vastly more infrastructure than they can afford to maintain and that the debt that they either currently have or are going to soon have because of that infrastructure is going to be more costly to service if we have large devaluations in the dollar.

Good times.

Neither Ben or I are simply naysayers or backbench bomb-throwers. This blog is sobering at times because the extent of the problems are so great and mindset of most of the country so oblivious to the financial situation small towns actually face. When people complain about the size of government, the amount of taxes they pay, the poor shape of their towns, the fact that nobody seems to be thinking ahead, the lowing standard of living, congestion, safety, crime, etc., etc., etc..., they are pointing out real frustrations with the current system. We echo that, but try to explain it AND try to point the way to an alternative.

Strong Towns.

We are convinced that the current way we plan small towns and then regulate their development (their zoning) and subsidize their key components (roadways and other infrastructure) is financially unsustainable. When local government spending goes from 3% of GDP to 15% of GDP during the highway era when we really didn't change the responsibilities of local governments (infrastructure, public safety and general government), it should be a wakeup call to people. The fact that we really can't point to broad prosperity in most of our small towns, despite this enormous amount of government spending, is sobering. More of the same is not the answer.

So the planning needs to be dramatically different. The subsidies - if they continue to exist, and there is reason to believe they will not - need to be redirected. And finally, the approach to zoning needs to be dramatically overhauled.

Enter Miami. A couple years ago I visited Miami to attend a conference on the Smart Code to find out what was going on and to see if I could learn anything I could incorporate into Small Town America. Miami is the home of Andres Duany and a talented group of urban planners working on form-based coding (FBC). At the time, Miami was in the process of developing a FBC to replace their existing Euclidean zoning code.

Fast-forward to September of 2009 and Miami looks poised to be the first major metropolitan area to adopt a form-based code citywide. Some quotes from the article:

This is about the future of Miami, about building sustainability,'' a beaming [Mayor Manny] Diaz said after the vote, noting that the plan is designed to guide development in the city for the next century.

...

Diaz framed Miami 21 as a bid to tame intrusive and over-scaled development fostered by an outdated, hodgepodge zoning code he said was easily exploited by developers' lawyers.

A vote to support Miami 21 will be a radical departure from our city's plan -- a past best exemplified by the philosophy of `build now, plan later,' '' Diaz said at the hearing, which included four hours of public testimony.

Passage of the plan puts the city at the leading edge of urban planning nationally. Miami 21 represents a rejection of zoning as practiced in much of the country, which mandates separation of residential and commercial uses, in favor of a ``form-based'' code that encourages mixed-used districts and mandates that buildings hug the sidewalk with shops, homes or offices to encourage street life.

While not the complete answer, Form-Based Coding is part of the Strong Town solution. Changing the orientation of small towns from pass-through automobile hubs to complex destinations of commerce and community is going to take at least a generation. FBC will help to get them there, both physically as a development code and intellectually by getting cities to emphasize neighborhoods and providing value for each public investment (instead of the current emphasis on new development on the periphery and the endless fight against traffic congestion.)

 

Note

Community Growth Institute is finishing work on the Code for Strong Towns, a model development code for small towns and rural areas that incorporates some of the principles of form-based coding. The model code is designed to strengthen small towns by facilitating robust development on existing infrastructure, getting a better return on existing investments and reducing or eliminating public subsidies for inefficient development patterns. It contains a long-term reorientation of our approach to development in small towns and rural areas and, in doing so, builds on the rural-American values we understand from our decades of living, visiting and working in small towns across the country.

We will be making the Code for Strong Towns available for free to any community that would like to adopt it. If you would like to be notified when this document is available, please email me at marohn@communitygrowth.net and we will put you on the notification list.

A Blog Facelift

We started this blog late last year for a handful of specific reasons. First, Community Growth Institute is an idea-machine, and we had a lot of thoughts that we wanted to organize, present, debate and discuss that we couldn't find a way to do in the normal course of business. There is nothing that disciplines a thought process more than writing, especially when one knows that writing is going to be released for public consumption. We wanted to impose that discipline on our thought process and see if it bore fruit.

We also wanted to expose our ideas to the world and see how they stood up to scrutiny. Ben and I, along with the other planners at CGI, believe strongly that the current approach to zoning and land use in small towns is counterproductive, at best. There has been only marginal innovation over the past two generations of planners, and those have been variations on the same theme. We believe our current approach is bankrupting us, destroying our communities in the process. With this blog we want to sharpen our analysis and proscribed solutions by exposing them to wide public scrutiny. While we don't generate a lot of comments on the blog itself, our readership has grown and I get a lot of people who email me privately about posts. We really value the feedback.

Finally, we want to start a movement pointing the way to a more prosperous approach for our small towns and rural areas. It is not enough for us to simply work in a few communities - noble as that may be - but we are driven to create a demand for change on a broad scale. So there is a touch of evangelism in what we are doing. We're not simply critics, but critical practitioners leading people to a better way of building our communities.

Building Strong Towns.

The Strong Town concept is one we have had for a while, but it is this blog that has given it life and greater definition (see objective number one, above). In recognition of how this concept has taken center stage in our thought process, we have been retooling the blog to capture that energy. The Planner Blog was a catchy idea, but the Strong Towns Blog projects what we are doing and will tie in more closely with other things we have in the works here at CGI. 

So, for our readers on this off day (we typically post Monday, Wednesday and Friday), that is the explanation for the face lift. It is a work in progress, so as with everything we do, your feedback is appreciated. Do us a favor and tell a friend or two about what we are doing here. That is how revolutions really happen.

Corinna Town Update

One of the most frequent questions I am asked while out working in small towns is to give an update on the Corinna Township / Wright County situation. Unfortunately, I'm not in a position to comment at this time or provide any analysis. I can link you to this article though, that will provide those of you outside of the Corinna area with an update.

You can always check the Community Growth Institute website as well for information on the legal challenges and the ongoing morass.

Incidentally, the Wright County URL frequently shows up in the reports on visitors to this blog. We'll only assume good things from that fact. Perhaps the initial stages of some glasnost.

Book Review: The Orange Code

My partner in this blog, Ben Oleson, convinced me to give ING Direct a try for my personal banking. It actually took him months to convince me, dropping subtle hints and endorsements here and there. When I opened my account, I found out they were much more than simply an on-line banking organization. They were a business on a mission, and a disruptive mission at that. That's all I needed to hook me in.

ING Direct's mission is simple: Save the Saver. It is based on the premise that money had become (falsely) too easy, that saving your money for the future was a virtue and that they would fight for the average saver who wanted to play by the rules and, in my words, get rich slow. ING Direct felt that the only ones benefiting from today's banking system is the banks, not the people giving them money. It is a grand vision that I have no problem relating to.

Community Growth Institute is a company with a similar vision. When asked in 2001 what I wanted to accomplish with CGI, my immediate answer was, "I want to save Rural America." It was only the modesty of my co-workers and advisors that tempered my hubris down to the idea of Buildings Strong Towns, which is how we express our mission today. Like ING Direct, we stand for those communities that strive to do things right, slowly and over time. Theirs is the difficult path, because putting off short-term gains and focusing on long-term strategies takes courage and leadership. 

And like ING, ours is a socially disruptive calling. The status quo of engineers and planners, while good and decent people for the most part, have been the ones that have primarily benefited from our current mode of operation in small towns. Not the communities they server, certainly not over the long-term. 

When I found out that ING Direct had released a book - The Orange Code, How ING Direct Succeeded by Being a Rebel with a Cause -  on their organization and their management approach, I had to read it. It was a quick read. For anyone wanting to lead an organization that is looking to bring about systematic change in the world, it is a must read.

Here is an excerpt from a chapter on "herding cats", describing some of the management challenges and benefits to an organization that actually makes decisions based on an internal compass firmly pointed towards the mission:

For any business, but especially for a rebel innovator like ING Direct, the environment is never a static thing. It's in constant flux, and it's often you that's causing that flux. By definition, then, there is never any convention to fall back on - no well-worn path, no time-proven standard solutions, no industry norms, no defaults. So, when you set a new goal or face a new challenge in the marketplace, a playbook solution is always going to feel a little bit wrong, never going to fit quite right. For ING Direct, and it would seem for many disruptive innovators, the solution instead is to have the clearest, most deeply committed sense of who you are and what your mission is.  The better people understand these things, the more naturally and organically they're able to improvise and innovate as hoc, because they're not serving some kind of operational orthodoxy.
Imagine a manager, alone, hard at work in an evening or on a weekend, bumping into some kind of dilemma: Does she call her supervisor and ask what to do? Or does she just know what your way of solving this would be? Not the solution itself, but the principles by which the solution should be formulated and by which it will get the natural support of the organization on Monday morning? At ING Direct, that's what empowerment really means.  It's not a matter of just granting autonomy to employees but of enabling it with a code that directs it. Think of this as the difference between having a conscript army and having a volunteer one: Soldiers in the latter always know, at least in the most general terms, what they have to do. The former will always wait to be told.
It's easy to imagine that there's an Apply way of doing things, or a Disney way, or a Virgin way; there is absolutely an ING Direct way, and steering by that star has made it a terrifically efficient and productive organization to helm.

I think the small towns that are most successful are the ones that have a real strong sense of who they are. Those communities benefit from the same principles. Have a belief system, they are able to more-quickly be able to put critical decisions into their own context and make decisions that reinforce their vision of the future, not undermine it.

A side benefit of reading the book is that it reveals a lot about the banking industry, especially at a time when everyone is talking about banking and how it is impacting our country. I highly recommend the book and, if nothing else, also highly recommend banking with ING Direct.

Book Review: Made to Stick, Why Some Ideas Survive and Others Die

Most planning information is dull and boring. This is related to the fact that most planners that disseminate the information are also dull and boring. An R-2 zoning classification with an impervious surface ratio of 0.3 and a length to width ratio of......okay, you get my point. Don't stop reading yet, because here is a book that can help planners, and their supporters, communicate more effectively.

Malcolm Gladwell's book, The Tipping Point, is one of the most extraordinary and influential books ever written on making systematic change. It is in our top ten of essential reads for planners. If you have not read it, you really need to.

Drawing inspiration from Tipping Point are the brothers Heath - Chip and Dan - with a great book called Made to Stick, Why Some Ideas Survive and Others Die. While Gladwell wrote about social epidemics and coined the term "stickiness" to describe an idea or concept that catches on and persists, the Heath's book focuses primarily on what makes an idea "sticky". They identify six principles, which are:

  1. Simplicity, the concept of stripping an idea down to its core.
  2. Unexpectedness, the notion that a sticky idea will violate people's expectations.
  3. Concreteness, to ensure that ideas are relayed in explicit, human terms.
  4. Credibility, which requires that an idea, although unexpected, can be believed once offered.
  5. Emotions, details how people connect to the information.
  6. Stories, to help people connect the idea to their life and experiences.

The book is a really quick read, packed full of examples and applications of these principles to learn from. Like The Big Sort, it also delves into human psychology with some revealing stories of social experiments that have been performed. One that was profound for me was the Tappers and Listeners experiment, which creates the Curse of Knowledge.  From the book:

In 1990, Elizabeth Newton earned a Ph.D. in psychology at Stanford by studying a simple game in which she assigned people to one of the two roles: "tappers" or "listeners". Tappers received a list of twenty-five well-known songs, such as "Happy Birthday to You" and "The Star Spangled Banner." Each tapper was asked to pick a song and tap out the rhythm to a listener (by knocking on a table). The listener's job was to guess the song, based on the rhythm being tapped.

The listener's job in this game is quite difficult. Over the course of Newton's experiment, 120 songs were tapped out. Listeners guessed on 2.5 percent of the songs: 3 out of 120.

But here's what made the result worth of a dissertation in psychology. Before the listeners guessed the name of the song, Newton asked the tappers to predict the odds that the listeners would guess correctly. They predicted that the odds were 50 percent.

The tappers got their message across 1 time in 40, but they thought they were getting their message across 1 time in 2. Why?

when a tapper taps, she is hearing the song in her head. Go ahead and try it for yourself - tap out "The Star Spangled Banner." It's impossible to avoid hearing the tune in your head. Meanwhile, the listeners can't hear that tune - all they can hear is a bunch of disconnected taps, like a kind of bizarre Morse Code.

In the experiment, tappers are flabbergasted at how hard the listeners seem to be working to pick up the tune. Isn't the song obvious? The tappers' expressions, when a listener guesses "Happy Birthday to You" for "The Star Spangled Banner" are priceless: How could you be so stupid?

It's hard to be a tapper. The problem is that tappers have been given knowledge (the song title) that makes it impossible for them to imagine what it's like to lack that knowledge. When they're tapping, they can't imagine what it's like for their listeners to hear isolated taps rather than a song. This is the Curse of Knowledge. Once we know something, we find it hard to imagine what it was like not to know it. Our knowledge has "cursed" us. And it becomes difficult for us to share our knowledge with others, because we can't readily re-create our listener's state of mind.

Imagine being a property owner or resident in a community appearing before a planning board. The board starts tapping.....R-2, coverage limits, floor/area ratio.... No wonder so many applicants and residents walk away angry while the board walks away indignant.

Put another way, how many times has a local official run a campaign to make changes in the zoning office, only to become a big supporter of zoning six months into office? We've seen it dozens of times. After six months in office that official is now hearing more than just tapping.....they are getting some of the music too.

Wouldn't it be great if we could communicate with everyone the same way we are able to communicate with that public official over their first six months in office?

Let me give an example of how Community Growth Institute has tried to do this. When we first started working in the City of Emily, they had standard Euclidean zoning. Their zoning classifications were the familiar R-1, R-2, R-3, C-1, C-2, B-1, B-2 and I. These designations, while common across the country, impart little information to members of a community. What would you expect to see in an R-1 District? How about a C-2 District? You may have a vague idea of what should be there, but nothing real concrete in your head.

Following a planning process, we created entirely new designations in Emily. In comparison, now ask yourself, what you would expect to see in in these districts:

  • Forest Preservation
  • Forest Residential
  • Rural Preservation
  • Neighborhood Residential
  • Downtown Mixed-Use
  • Commercial Transition

We have actually had people come into the office and ask if they needed to plant trees because they were in the Forest Residential area. Completely unprompted too. That is making an idea sticky!

Read this book. Highly recommended.

And for the television generation that can't focus long enough to read an entire book, here is a video interview with the authors that you can watch. 

Visit msnbc.com for Breaking News, World News, and News about the Economy

What Level is Best?

This week I received an email from a student writing a report on "Which level of government is best equipped for planning and zoning administration?" What a question!

People may be surprised to know that this is a question we have debated at great length at Community Growth Institute. With the very bright people we have in our organization, along with the close, professional colleagues we have included in these discussions, we really have not found a consensus. It's an open issue.

So let's start by identifying the possible choices. In Minnesota they are: 

  • Federal Gov't
  • State Gov't
  • County (Regional) Gov't
  • Cities and Townships 

Let's look at this issue in the theoretical sense. Assume (and this might be a leap for some) that all of these levels of government are equally competent, operate in a transparent manner, are responsive to what is going on in the world and, in a general sense, are going to do a good job. So we are not dealing with competence in this discussion. (A good argument can be made that you can't discount this, but we will for this discussion. We've seen great and disastrous at every level of government.)

In the theoretical sense then, my answer would be: All of the above, but with different responsibilities.

Federal and state governments are best-suited for policy-level planning. They function best when setting the goals and the overall strategy (then creating the right incentive framework for implementation). Federal and state governments can budget money for studies. They can gather statistics and measure results. When political involvement is limited to oversight, they can also balance competing interests in the policy realm.  They tend to become very inefficient, rigid and bureaucratic when they are involved in the day to day application of standards. 

Cities and townships, our local governments, are best suited to making most day-to-day decisions on implementation. We've found that most local government officials are quite conscientious and, when a federal or state policy makes sense (and most often even when it doesn't), these officials do their best to implement it. And when the policy doesn't make sense, they provide a valuable check on the system that should alert policy-makers that something isn't working. They have the ability to talk with people, smooth over rough edges and, in an efficient way, make things work. Give them a good policy with the right incentives, and they can get it done.

That leaves counties, which to me are the fulcrum in this system. A well-functioning county or regional government should be sophisticated enough to take policy from federal and state governments and translate it into the "local language". That means they need to be smart, proactive and well-functioning. That is doubly true because a good county government should also be able to guide and oversee (and correct where necessary) a robust local implementation program. In other words, they are the go-between.

When we have this discussion internally, I find it easiest to use a military analogy. The federal government is like a general and the state government is like a major or a colonel. They are giving the overall guidance and direction. In military-speak: they set the mission. Cities and townships are your enlisted troops. In the U.S. Army, you give them the mission, some sophisticated training and as much latitude as possible and they can accomplish amazing things. 

In this analogy, counties are your non-commissioned officers, captains and lieutenants. These are the toughest jobs in a combat situation. They don't set the policy, they carry it out. But they don't actually do the work. Their job is to ensure that others get the mission done.  A captain/lieutenant or NCO gets it from above and below, but without them, nothing would work.

If I were a federal or state policy-maker today, I would focus on strengthening the planning operations and roles of counties. Great things can happen when a county planning department sees its role as a regional leader, working with the state and federal governments to establish policy while working with local governments to implement. The greatest breakdowns we see today are where counties lack sophistication, where they are territorial and adversarial to their local governments or where they are disconnected from the public (or, in the worst case, all three).

So, for the student working on the project, my opinion is that each level has a critical role to play. Where they are competent in filling that role, great things happen. Where they aren't, the government tends to be....well.....government.

In a related note, if you are interested in seeing what a sophisticated, well-operating county planning and zoning department looks like, check out Stearns County, Minnesota. While they don't do everything perfect (shocker - nobody does), they understand their role, are very smart and play well with others. They do vastly more right than wrong, which is a standard they should be judged by. If we could clone them a thousand times across this county, we'd solve a ton of problems.

What Makes a Strong Town

At Community Growth Institute, our mission (and we say it with conviction) is to Build Strong Towns. In a day and age when it seems like everything we thought was strong is now collapsing around us, I thought it might be helpful to ask the question: What makes a Strong Town?

Now, when we talk about towns, we are talking about places that, I assume, most people know what we mean. If you are having trouble, think of the entire United States, take out the large cities and metropolitan areas, take out the developed and developing suburbs that surround them, and what you have left is pretty much small towns and rural community. These are the places we call "towns".

It seems to me that a Strong Town would have a few, fairly simple, characteristics. 

  1. It would currently be financially stable.
  2. It would have managable long-term financial obligations.
  3. It is not losing population faster than it is being replaced.
  4. It is not losing jobs faster than they are being replaced. 

Now, right away, I can see the planners all protesting at this list. They may argue that a Strong Town would have a "sense of place", would have things like a pedestrian downtown and affordable housing, would have a good jobs/housing balance, etc...  Without making the counter-argument here (I will make it in the comments section if someone wants to make the argument), I believe those things would all fall underneath the four criteria I have listed. At least in the small-town context.

Let's examine the criteria.

1. Currently Financially Stable. It would be hard to say that a town is strong if, at the present time, it is having budget upheavals. As a current example, if a town were too dependent on subsidies from the state and federal government, had a high foreclosure rate, lost its pension fund in the stock market, etc...those things would tend to disqualify a town from being considered "strong". This is a short-term indicator, to be certain, and would need to be considered along with the second criteria.

2. Managable long-term financial obligations. Many towns that are currently financially stable would have a hard time meeting this second criteria. In fact, this is where most towns fail miserably. There are very few that, if they did a real capital-improvements plan and calculated what their long-term (20-year) infrastructure costs would be, can actually afford to simply maintain the infrastructure they currently have. Putting off maintenance today in order to meet the first criteria simply makes this second criteria tougher to meet. Most towns depend on subsidies from state and federal governments just to survive. It is hard to imagine calling that a position of strength, especially given how well those levels of government are currently doing.

3. Not losing population faster than it is being replaced. It is imprtant to note that we are not saying that a Strong Town has a population that is growing. There are plenty of growing towns that are not Strong Towns. I know lots of places that are adding people, but they are all in the nursing home. Those places are ultimately going to be losing population faster than they replace them. The key here is "replacing" and it denotes a population that contains a distribution of ages and enough opportunity where, when someone moves out or passes on, other people desire to move in or stay. A stagnant population where the birth rate equaled the mortality rate would work in many senses. A population that replenishes itself through migration and births is ideal. 

4. Not losing jobs faster than they are being replaced. Again, we didn't say "adding new jobs" but talked about not losing them (retaining) at a rate faster than they are being replaced. A lot of small towns confuse job losses and business failures with community failure. Not true. Businesses come and go for many reasons, most beyond the control of a local government. It is healthy and necessary to have business turnover. A Strong Town is able to attract businesses at a rate that is equal to or greater than the rate of loss. A business closes and, instead of it being a loss, it is an opportunity for another business to give it a try. Over time, the strong businesses last and form the backbone of the strongest towns. This calls into question some of the short-term tax benefits and other schemes and would reward those towns that create a climate for stable, long-term investments.

The thing I perhaps like most about these four items is that they can be quantified, tracked and scored over time. If your community wants to be a Strong Town, figuring out where you are with these criteria is a good place to start.

Okay planners - go ahead and make your argument. The rest of you should also feel free to let me know if I've missed the mark. I have not spent a ton of time on this particular list and would be interested to hear other opinions.

Township Annual Meetings

Democracy is the worst form of government except for

all those others that have been tried.

                                                    - Winston Churchill

Last night I spent over five hours in the car, driving through a nasty snow storm, so I could attend a township annual meeting in Corinna Township. While I'm not going to get into what I said in my 15-minute presentation (sorry TS), I do want to say a few things about township meetings.

Once a year in Minnesota, townships hold an annual meeting that is open to all property owners. It is direct democracy at its finest, with binding motions and resolutions coming from anyone on the floor, subject to immediate vote. Anyone can propose just about anything. A majority vote rules.

While it might sound like chaos, and sometimes it might look like it, township annual meetings - and the governance that comes from them - work really well.  Residents make the decisions, and live with the consequences. I've seen townships have excellent policy debates, covering all perspectives and interests, in a way that a city or county never could. It is fun to watch.

That being said, I've also seen townships do really stupid things at annual meetings. But again, people live with the consequences. With the direct democracy of a township, these bad decisions tend to work themselves out over time. People know they can show up and actually be heard, so they do. They also know who to blame for poor decisions (themselves).

We've spent a lot of time at Community Growth Institute discussing the best roles for different levels of government. In Minnesota, there is certainly an important policy role for counties. Assuming competency and transparency, the most effective planning is done at a county or regional level. Implementation on the other hand, especially day-to-day decision-making, works really well in a township government where the bureaucracy is closer to the people. Where counties and towns work together, the system can work incredibly well.

There are times like these, driving home after a meeting, when I can't help but think of Samuel Adams getting the Sons of Liberty together for a town hall meeting in Boston. These were people that started our country and, truth be told, there was nothing extraordinary about most of them in terms of intellect or education. But they met frequently, debated a ton of critical issues and, in the end, made some of the most extraordinary decisions - decisions that ultimately sparked the American Revolution.

And even though Thomas Jefferson was cut from a different clothe and really had little time for Samuel Adams (or his brother John, whom he defeated to become the third president), it was Jefferson's vision that created the six-mile by six-mile grid that we experience in Minnesota as the township. There is no question that Jefferson envisioned township meetings similar to the one I attended last night and the ones going on across the entire state. Government of the people.

To make sure this is not all rose-colored glasses, I am going to offer the following video. While I was not at the meeting shown in this clip, I can close my eyes and picture many that I have been at that had this tone. Democracy is messy, but in the end it works. I love being part of it.

Letter to the City of Pine River

Dear Mayor and City Council,

It would be an understatement to say that we were disappointed with the administrative law judge’s decision regarding our annexation petition. The circular logic used to develop the premise of the decision (that the townships are growing but Pine River isn’t, therefore there is no need to consider annexation) overlooks key testimony and facts stipulated to by all sides. The decision lacks an understanding of how small-towns grow and thrive and, in our opinion, misapplies the statutes. We believe it was a bad decision.

We also believe it to be a harmful decision. Our testimony and reports were not generated exclusively for the purpose of arguing your case. We passionately believe that the annexation, as proposed, is in the best interests of the entire Pine River area and that, without it, the prosperity of the entire area is threatened. This decision sets a chilling precedent for small-towns across the state.

We are heartened by the news that you will be appealing the decision. We know the City has already been financially burdened by the process up to this point. It is a tragedy that you are required to spend the amount resources you have pursuing this. We are sensitive to your financial position and have tried to reduce the costs you have incurred for our planning expertise.

We want you to know that we are committed to you and to seeing this process through to its completion. To that end, we are going to work for you on this appeal as your planning expert at no cost to the City of Pine River. We will do what is needed to supplement our reports and testimony, as well as provide additional testimony as needed in District Court, and you will not be charged for that effort. We’re on your team, and we are in this together.

We’re optimistic that District Court will be a more favorable forum for us. The judge there will certainly be familiar with life in a small-town and, therefore, have a better context for the case we present. We’re going to work with your legal team to make the best argument on your behalf. Our organization is proud to be a partner with you in this effort.

Sincerely,

COMMUNITY GROWTH INSTITUTE

 

Charles L. Marohn, Jr., PE AICP

President, Professional Engineer, American Institute of Certified Planners