The Growth Ponzi Scheme
For those unfamiliar with Strong Towns, here’s a best-effort summary of what they do:Strong Towns is a non-partisan non-profit that advocates for governments to build financially solvent towns. Many cities are perpetually broke because they owe more money in maintenance burden (fixing roads, pipes, etc) than they bring in through tax revenue.This happens because towns in North America tend to build out large neighborhoods all at once (think: suburbia). At the start, the developers pay for all the infrastructure, and then “give” it to the city to maintain.At first, everything seems fine. The city gets plenty of new tax revenue! But come 20 or 30 years later, it turns out that the tax revenue of the new development is not enough to replace the roads, fix the pipes, and so on.And so to pay for the repairs, the city then builds yet another neighborhood in the same strategy to collect the initial tax revenue and use it to pay for the repairs of the previous neighborhood. It’s effectively a Ponzi scheme (as referenced in the article).The gist is that many low-density spread-out suburban neighborhoods with expensive infrastructure are a huge cost center for a city. And since most North American cities build this way, we have a lot of cities that are “functionally bankrupt” or will be soon.If you're a systems thinker who lives in a town that can't seem to fix it's potholes, you may want to check out the book they've published with the same name: "Strong Towns".(Adapted from a previous Strong Towns post)