Ted Koppel Truth Quote1 688w320h

"Civil Engineer Charles Marohn worked his whole life trying to make his community better—until the day he realized he was ruining it.

Marohn primarily takes issue with the financial structure of the suburbs. The amount of tax revenue their low-density setup generates, he says, doesn’t come close to paying for the cost of maintaining the vast and costly infrastructure systems, so the only way to keep the machine going is to keep adding and growing. “The public yield from the suburban development pattern is ridiculously low,” he says. One of the most popular articles on the Strong Towns Web site is a five-part series Marohn wrote likening American suburban development to a giant Ponzi scheme.

Here’s what he means. The way suburban development usually works is that a town lays the pipes, plumbing, and infrastructure for housing development—often getting big loans from the government to do so—and soon after a developer appears and offers to build homes on it. Developers usually fund most of the cost of the infrastructure because they make their money back from the sale of the homes. The short-term cost to the city or town, therefore, is very low: it gets a cash infusion from whichever entity fronted the costs, and the city gets to keep all the revenue from property taxes. The thinking is that either taxes will cover the maintenance costs, or the city will keep growing and generate enough future cash flow to cover the obligations. But the tax revenue at low suburban densities isn’t nearly enough to pay the bills; in Marohn’s estimation, property taxes at suburban densities bring in anywhere from 4 cents to 65 cents for every dollar of liability. Most suburban municipalities, he says, are therefore unable to pay the maintenance costs of their infrastructure, let alone replace things when they inevitably wear out after twenty to twenty-five years. The only way to survive is to keep growing or take on more debt, or both."

- Leigh Gallagher, Assistant Managing Editor of Fortune, writing in Time MagazIne,

The entire article, "The Suburbs Will Die: One Man’s Fight to Fix the American Dream," is here.