Corner Liquor Stores vs. Fancy Shopping Malls

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One of the fundamental insights of the Strong Towns movement is that in the 20th century, we built vastly more public infrastructure than our tax base can support long-term maintenance on. Too much of our shiny and new development actually has a low value per acre and for the amount of public investment required to support it. We call this “doing the math.”

For example, a developer comes to your town to build a new cul-de-sac carved out of a farm on the suburban fringe. In exchange for the right to build twenty houses, they will build all of the public infrastructure to support them: roads, pipes, power lines, fire hydrants, etc., and then hand that over to the town. The town gets a free road and a bunch of new tax-paying houses—growth! Tax receipts go up and the town uses them to pay for more and better schools, parks, public buildings, police, fire, etc. However, the long-term maintenance cost of repairing the roads, pipes, lines, etc. cannot be supported by the low tax revenue per length of road, pipe, line etc. Everything is great for the first 30 years, but then the road needs to be repaved, the pipes need to be lined, and the sidewalk starts looking shabby.

Roughly speaking, public infrastructure needs can be understood as a function of intensity of service, amount of private investment, and land area. Bigger sites have more road fronting them, longer for pipes and wires to travel, etc. Higher demand uses create more demand for wider roads, bigger pipes, and fatter wires. A city or town should, in general, be looking to get the best value per acre. After all, the city or town’s most fundamental resource is its land. Are you using it well? Are you getting a good return in tax revenue on your public investments? You might be surprised at how properties stack up.

For example, here’s a typical house in a suburb outside of Providence, assessed value $305,000, on a almost half-acre lot; value per acre: $664,782 per acre.

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