Letting go of “dead ideas” about growth

Last week Charles Marohn gathered with leaders from Baldwin, Princeton and other area communities to share strategies for the future maintenance of cities and towns of all sizes in a Curbside Chat. The talk's primary recommendation was for cities and towns to become resilient by realizing their current trajectories are not financially feasible, letting go of dead ideas and beginning to transform communities into self-sustaining entities.

This is a two-part post. Part one highlights Marohn's comments on where cities went wrong on growth. Part two will explore techniques to improve resiliency in communities moving forward.

There are four primary mechanisms that fueled current growth patterns that will not fuel growth patterns in the near future, Marohn explained.

Transfer of money from state or federal programs -- whether through earmarks, grants or other programs -- have helped fund projects in the past. But local and national government debt will prevent much aid from filtering into cities and towns in the future.

Government transportation spending, seen in Baldwin as improvements to county roads, Highway 169 and other grants for improvements, will also likely wane over time due to budget shortfalls.

Whereas infrastructure was once funded primarily through taxation, recent development has been funded mostly through public and private debt accumulation. This is not sustainable.

Recent growth has been funded through a ponzi scheme. New growth has been paying for old growth. But now the growth has stopped and there is no new growth to contribute money to maintenance of old growth, leaving cities desirous of new growth.

Marohn calls these four "dead ideas" that must be left behind.

He adds towns tend to think attracting a large employer to a small town will solve a their financial problems. Instead of searching for a business that would employ 25 people, Marohn argues, cities and towns should invest in building 1 new job among 25 businesses that already exist in the community.

The reason why centers on one of his key points of resilience: cities and towns need to start thinking about the continuous cost of growth.

In the past, when a new development was built, developers paid the up-front costs for most improvements. This made developing seem like a great asset for cities and towns because their up-front cost was low and they would get the tax benefit of having their land developed.

But what city council members and town board members failed to internalize was that the responsibility to maintain those developments -- the sidewalks and streets providing access to these places -- belongs to the city forever. As it turns out, most developments cost cities and towns far more than they earn beginning in the 25th year of their existence.

Marohn doesn't oppose public incentives for private growth. A town might offer funding to employers as an incentive to create new jobs. This one-time fee is a better financial decision for the city or town than taking on the long term liabilities of new growth.

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