The Real Reason Your City Has No Money

I read two fascinating articles on the Strong Towns web site. The first article was The Real Reason Your City Has No Money.

Through a combination of federal incentives, state programs and private capital, cities were able to rapidly grow by expanding horizontally. This provided the local government with the immediate revenues that come from new growth — permit fees, utility fees, property tax increases, sales tax — and, in exchange, the city takes on the long term responsibility of servicing and maintaining all the new infrastructure. The money comes in handy in the present while the future obligation is, well….a long time in the future.

The second and follow-up article was Poor Neighborhoods Make the Best Investments.

What is obvious here is that the poor neighborhoods are profitable while the affluent neighborhoods are not. Throughout the poor neighborhoods, the city is — TODAY — bringing in more revenue than they will spend to maintain the neighborhood, and that’s assuming they actually invest the money to maintain the neighborhood (which they have not been). If they fail to maintain the neighborhood, the profit margins will be even higher.

This might strike some of you as surprising, yet it is important to understand that it is a consistent feature we see revealed in city after city after city all over North America. Poor neighborhoods subsidize the affluent; it is a ubiquitous condition of the American development pattern.

Yes, this was all very surprising and revealing. The explanation is plausible. I’ll have to read more to see if plausible in this case is also actual. However, I bet that most people were as ignorant of this as I was. Do you think 45 knows this?

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