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Suburban sprawl: A Ponzi scheme?

One of the deepest critiques of expansionary American growth patterns comes from a surprising quarter: Minnesota fiscal conservative Charles Marohn. He even blames suburban sprawl for our current financial crisis.

"The great experiment of suburbanization that America embarked on following World War II has no precedent in human history," Marohn writes in his Strong Towns blog. "As it enters its third generation, the flawed assumptions that were overlooked are now coming back to bite us in a cruel way. Like any Ponzi scheme, there is only one way this ends."

As Marohn acknowledges, this is an extremely dark vision of a problem for which there is "no solution," only "rational and irrational responses." And he minces no words in his disdain for an autocentric social order built on "two-ton prosthetic devices" and "snout houses" with garages sticking out the front. Even schools these days are designed with "drive-thru lanes" where motorists can pick up their "McChildren."

The heart of his argument is that our increasingly spread-out built environment, nurtured by flawed government policies and cheap oil, is financially unsustainable because life-cyle maintenance costs of supersized infrastructure far exceed the revenue sprawl can produce.

"Our places do not create wealth, they destroy wealth," he writes. "Our development pattern ... creates modest short-term benefits and massive long-term costs."

Projected $50 billion long-term shortfall
Proof of this can be seen in official projections of a $50 billion long-term shortfall for Minnesota's trunk highways, most of it for necessary maintenance and reconstruction, or in any city council debate over deteriorating streets. Some policymakers are facing up to the problem. Where Twin Cities planners once envisioned another ring road far beyond the 100-mile Interstate Hwy. 494-694 beltway, the Metropolitan Council now focuses transportation resources inside the suburban freeway system.

Marohn would probably call this a "rational response," albeit one that will be painful for many. At least it attempts to short-circuit a vicious cycle he describes thus:

"Suburban development entices communities to take on long-term liabilities in exchange for near-term cash advantages. But as those liabilities cost the community more than the development creates in overall wealth, the approach ultimately results in insolvency. To forestall the day of reckoning, more growth is induced, setting up a Ponzi scheme scenario where revenue from new development is used to pay liabilities associated with old development. This is unsustainable, but that has not kept us from trying desperately to keep it all going."

Borrowing from author Richard Florida, Marohn also draws economic lessons from America's Long Depression of the 1870s and the Great Depression of the 1930s.

Overdevelopment of railroads
The former he blames on overdevelopment of railroads and corresponding real-estate speculation, along with greater access to markets for farmers that led to a crash in commodity prices. The bust ended with what Florida calls a "spacial fix," the growth of industrial cities drawing masses from the agrarian landscape. "For many people of that era, this was a painful transition," Marohn writes.

The Great Depression arose from a financial bubble that tried to compensate for a "lack of fundamental growth in the real economy" and "huge gains in productivity, production-capacity that actually outstripped our consumption-capacity," Marohn writes.

World War II provided "a temporary recovery, but economists at the time were concerned that the end of war spending would send the United States back into depression," he adds. "What happened next was another spacial fix: suburbanization. We ... created the greatest economic advancement the world had ever seen. It was a very painful transition, especially for our major cities."

Suburbanization in Brainerd, Baxter
Marohn was born in 1973 in Brainerd, Minn., and grew up on a farm in adjacent Baxter, now a sprawling, big-box suburb where he lives today. He bemoans what suburbanization has done to both cities. He has illustrated one of his blogs with a picture postcard of Brainerd's West Front Street bustling with pedestrians and horse-drawn wagons in 1894. "Today this street looks like Dresden in 1945, an empty wasteland of parking lots and low-value, partially-abandoned buildings," he writes.

In Baxter, he sees a different wasteland of local, collector, arterial and major arterial roads, large setbacks, excessive parking lots and "separation of uses through a Euclidean zoning model."

Tough times lie ahead for this sort of development, he warns, and it will be "far messier than the urban decline of two generations ago." Abandoned structures in the future Suburgatory will be used for salvage, he predicts, as gasoline prices rise, road maintenance falls further behind and public safety services atrophy.

What to do? "The answer is another spacial shift, a change in the pattern of development moving away from mass-suburbanization," he writes. This includes a focus on walkability in city and suburban neighborhoods alike scaled for people, not for cars. For example, he says, a small part of Baxter could accommodate 10 times its current population "without significant investments in additional infrastructure."

Redevelop strip malls
Strip malls can be redeveloped with extra stories and broader footprints for neighborhood-focused uses, he suggests, reducing "the vast amount of wasted space between structures ... These things can be built into each neighborhood incrementally over time."

Not every Wisteria Lane, especially those on the far edges of development, will survive this shift, Marohn says. But many can if they downsize roads to neighborhood standards, prioritize maintenance of existing infrastructure and build transit connections with other neighborhoods.

"This will certainly be much more cost-efficient for everyone than the ridiculous dial-a-ride system currently being used," he writes. "Maturing neighborhoods will create demand for more frequent and reliable transit service, which will build more demand for neighborhood life, which will build more transit demand, and on and on in a virtuous self-reinforcing loop.

'No large up-front bet'
"The neighborhood approach requires no oversizing, no large up-front bet, no stifling congestion if the system doesn't respond as predicted, no more building multimillion-dollar industrial parks to gamble on attracting offices and churches. Instead of looking for one business with 50 jobs, Baxter can now find success adding one job to [each of] 50 businesses.

"This is the true essence of a Strong Town. A local economy that is resilient in the face of outside shocks. A place that has built-in vibrancy, sense of place and community cohesion. A town that is designed to grow stronger, incrementally over time. And a people not dependent on what happens in St. Paul, Washington, D.C., or Saudi Arabia but fully in control of their own destiny."

Right-wing sprawl apologists will fight this blueprint at every step. But when the money runs out to keep propping up the great suburban experiment, Minnesotans will again gather together in Strong Towns scaled to people, not cars.

Conrad deFiebre is a Transportation Fellow at Minnesota 2020, a nonpartisan, progressive think tank based in St. Paul. This article originally appeared on its website.

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Comments (17)

Altho I agree with many of the concerns with suburban sprawl, I am confused by the example of Baxter, MN which is an urban, not suburban, city of 7,000.
Baxter is a directly connected part of the twin cities of Brainerd/Baxter. You can step from Brainerd to Baxter.
The big box stores are there with space between for parking, as the urban area is the shopping center for Central Minnesota. The shoppers come by car from all points of the compass.
The population density for this urban area of about 20,000 is similar to that of most cities of that size.

Am I the only one who is sick of the "Ponzi Scheme" metaphor? Life is a Ponzi scheme, its unsustainable and we will all die eventually.

The problem with this conservative analysis is that it actually perpetuates the Ponzi scheme it criticizes by advocating the abandonment of existing suburban infrastructure and investing in new development in urban centers. The assumption is this will, on balance, be cheaper.

Marohn suggests that all that existing suburban infrastructure will end up as salvage. This sounds suspiciously like the urban renewal advocates of the 60's who thought the solution to urban decay was to tear down and salvage old buildings and replace them with the parking lots necessary for modern life.

Far from being a plan for transforming our communities, this appears to be more an excuse for not making the necessary investments to maintain existing public infrastructure. The idea is that since we don't want to pay taxes to pave the streets, we should just leave the private investments in those areas to be reclaimed through salvage.

Just as the new urbanism is tranforming many cities that were once seen as only useful for salvage, there is a need for a different approach to small town and rural development. That transformation of urban centers has resulted from large public investments. And the transformation of small towns will require similar commitments.

The problems for small towns are very similar to those faced by the central cities. They provide jobs, entertainment and a marketplace for a wide area. The urban services necessary to support those functions are expensive. But they have limited ability to recover those expenses from many of the people who benefit from them but live and own property in the surrounding area. In fact, in many cases, the county collects taxes on property in the city to provide services to the surrounding area.

The resources are there to revitalize our small towns along the lines Marohn suggests. Unfortunately, that approach does not match conservative ideology.

I find Mr. Marohn's perspective on suburbanization to be spot-on, and his proposals for responses generally quite sensible. I was raised in a small Main Street town with many built-to-last two- and three-story buildings along the length of the business district. They were built that way because they worked in a time when passenger rail was the only viable way to get to the next town or beyond.
As the drive-everywhere arrangement unravels, it seems likely that that basic Main Street model will be adapted to the suburban landscape, or at least tried. As Marohn says, “Strip malls can be redeveloped with extra stories and broader footprints for neighborhood-focused uses.” I wonder, though, how many strip-mall structures are capable of supporting additional stories. Were any of them built with that in mind?
Check out his TEDx1000 Lakes talk on his StrongTowns.org site. He rocks.

Thank you, MinnPost and MN2020, for looking at this important issue. It is obvious that deFiebre spent a lot of time read our stuff. I do appreciate that. And thank you Peter Doughty - you are very kind.

For Rolf Westgard, in the language we are using, Baxter is a small town that has been built primarily using the post-WW II, suburban model. Almost all of the development there today was built after 1950. This contrasts with Brainerd, which was an historic railroad town built largely pre-WW II. Brainerd's story is one of grafting a suburban development pattern onto traditional DNA. Baxter's was suburban from the beginning.

Because they are such fantastic case studies in these two different faces of suburban expansion, we have an entire series on these two cities on our website. Go to the blog on StrongTowns.org and then look in the right column for the Brainerd/Baxter series.

Also, I feel compelled (against my better instincts) to respond a little to Ross Williams. He is a frequent commenter on our blog who, unfortunately, tries to put things through a political prism. For him this is a matter of people paying their fair share. I think good people can disagree on the degrees of that point, but it is not relevant to Strong Towns thinking (despite Ross's persistence). Even if we took all of our resources and put them into sustaining the development pattern, it would ultimately fail. We could push the date back a ways for certain, but you can't lose money on each transaction and then make up the difference in volume.

I actually find Ross's thinking dangerous because it suggests that nothing needs to change if we just go get the money. You can believe what you want about the tax system -- and it is an unfair mess, to be sure -- but it does not impact our analysis. When we are talking about the future of our cities, we need to get past this narrow line of discussion.

Finally, just for the record, I did not suggest that all existing suburban infrastructure will end up as salvage. That is crazy. I wrote what I thought was a reasonable take on the future of our places and concluded that salvage was one alternative some places faced. You can read that at: http://www.strongtowns.org/journal/2011/10/10/suburban-salvage.html

Thanks everyone. Do important work. -Chuck

Thank you Charles, but I suggest there are better examples of urban sprawl than Baxter which is not sprawled from Brainerd.

I sure love hearing this, but there have been many voices singing this song for the last 20 years, and yet so many Americans (and Minnesotans) still scoff at the ideas Marohn is putting forward.

Quite honestly, I was hoping a few years ago that high gas prices would start to force the kind of transformation he's discussing. For awhile, I thought that was finally going to happen, but then gas prices fell back from their peak, and we got used to $3.99 gas as the new normal.

This whole way of thinking crystallized for me when I was living in Charlotte, N.C., in the mid-90s. A developer built a giant suburban shopping project that aimed to recreate the feeling of the old downtown. It had a business district with sidewalks and storefronts. There was even a movie theater with an old-fashioned marquee and a glass ticket booth that you walked up to.

People drove in from the suburbs, parked their cars in the giant parking garages ringing the development, and walked out into this Disneyland re-creation of the *real* downtown that the suburban mentality destroyed and the suburban residents would never dream of visiting.

@Rolf Westgard

I appreciate your point, but you won't find me using the word "sprawl" anywhere. That was the title of the article, but not mine. Sprawl is not the correct word for what we are describing.

What we are describing is the suburban pattern of development. You can also call it the post-WW II pattern of development or an auto-based pattern of development.

Throughout all of history there has been "sprawl" if that means homes placed across the landscape on the periphery of an urban center. It is only in the suburban pattern of development that we (a) industrialized the construction of an auto-based pattern on the periphery of cities and (b) simultaneously gutted/stunted the natural maturing cycle within cities.

-Chuck

There are many ways that existing suburbs could be retrofitted for a more sane way of life:

1. Put pedestrian/bicycle bridges at major intersections, so that people don't have to get into their cars to go from Strip Mall A to Strip Mall B, 100 feet away.

2. Require new strip malls and covered malls to have parking either in the back or underground, so that they are pedestrian friendly.

3. Create a network of bicycle/pedestrian paths among the housing clusters and commercial clusters.

4. Encourage development around existing or potential bus or train stops. Put little mini commercial areas around these stops, so that commuters can buy a newspaper, drop off dry cleaning, or put their kids into daycare on the way to work without using these errands as an excuse for driving.

5. When planning a new residential or commercial development, think of pedestrian access first instead of ignoring it entirely or putting it in as an inconvenient afterthought.

I would also discourage suburban-style development in urban areas, such as along North Broadway and the central part of Lake Street. Note that these are both low-income areas, as if the developers felt that ticky-tacky was good enough for poor people. Note that urban redevelopment in affluent areas like Linden Hills or 50th and France has much more esthetic appeal.

"For him this is a matter of people paying their fair share."

It has nothing to do with "fairness". The problem is that when you create a marketplace that is hugely subsidized, you naturally get unsustainable results. That is what created the suburbs. Suburban development was economically attractive only where there was an urban center to support it. And it was economically attractive only so long as the suburban development did not have to pay its share of the costs of maintaining the urban center.

What Marohn proposes is that we continue that process, only abandon the existing suburban development for new development with a different set of design standards. He is not proposing transforming the suburbs, but abandoning them to neglect and eventual salvage.

He proposes abandoning existing communities and infrastructure for building new infrastructure somewhere else with the notion, false I think, that it will save money. That is exactly the same process that took place in the urban core with much the same argument appealing to modernity used to support it.

I agree with Chuck's design arguments about what makes good places to live. But implementing those ideas in existing communities will likely require more resources, not fewer.

"Even if we took all of our resources and put them into sustaining the development pattern, it would ultimately fail."

That is not really the only alternative to abandonment and salvage. Moreover, I doubt it is true. The development pattern in question does not require that past development be sustained, only that the cost of new development be subsidized. The failing inner ring suburbs in the Twins Cities didn't prevent a continued pattern of suburban development in the exurbs. We simply continued the pattern of disinvestment and abandonment. Abandoning those for creating a bunch of new development with all the urban amenities is just repeating the pattern with a new theme.

That may not be what Chuck wants, but I think that is where you end up if you abandon public investment in existing communities. Its likely going to be cheaper and easier to build that new development with sidewalks, parks and shopping all in walkable surroundings on a nice greenfield somewhere. Cheaper, that is, if we continue to heavily subsidize it with the same pattern of disinvestment we have seen and Chuck argues for continuing.

If we want to restore walkable small towns with services that are scaled to their local residents, then we need to figure out how to stop subsidizing the alternative. We need to acknowledge the burdens that the surrounding auto-dependent development places on those towns. Because there is no real shortage of resources,they are just being used to support and encourage the wrong things.

BTW Here is the opening sentence of the link Chuck provided:

"What is the future of the structures built during the Suburban Experiment? While it is unsettling for many to even consider, it is likely that a high percentage will be used for salvage material"

Ok, its not "all". But then not all of the inner cities was ever abandoned for salvage either.

Karen -

The experience with pedestrian bridges has been that people don't use them. There are exceptions, but they are really a last resort.

What is needed are direct, grade level pedestrian and bike friendly crossings. That means eliminating slip lanes, creating pedestrian islands, adding curb extensions, slowing down traffic, etc.

It also means narrower streets with fewer lanes to cross. But MNDOT and Minnesota's other traffic engineers apparently love five lane roads expanding to seven or more with tutn lanes at intersections. But then MNDOT hates pedestrians and bicyclists since they slow down traffic.

The rest of your ideas are spot on. In particular the setting of buildings adjacent to sidewalks so that people can easily walk between them. Its sometimes controversial since it controls private development choices.

OK. The old downtown of Brainerd was essentially put to sleep by the big box stores of Baxter.

@Ross, you would be well served to just say what you think and stop trying to represent what I think. You have my words 100% backwards.

I've never suggested we build any new infrastructure. In fact, if you read the report that prompted this article, the first strategy we recommend for each community is to STOP building new infrastructure. Completely stop.

I am also not suggesting we abandon the suburbs. This article pulls extensively from a series we ran on Baxter and how to improve the return on their infrastructure investments. The entire last part of the series deals with improving this situation, not walking away from it.

Seriously, I'm not sure who you are quoting but it is not me. I wish you'd quit misrepresenting what I've said.

-Chuck

"Seriously, I'm not sure who you are quoting but it is not me. "

I thought you were the author of Strong Towns. In fact you provided the link this quote is cut and pasted from:

"What is the future of the structures built during the Suburban Experiment? While it is unsettling for many to even consider, it is likely that a high percentage will be used for salvage material"

Its not a sentence buried in the article, its the lead YOU wrote. Every other quote I used is directly from your posts here.

"I've never suggested we build any new infrastructure. In fact, if you read the report that prompted this article, the first strategy we recommend for each community is to STOP building new infrastructure. Completely stop."

And that is where I completely disagree with you. Substantial investment is required to restore and maintain walkable communities.

You seem to believe all those folks living out on the lakes are going to move to town. I don't think that is going to happen. And Brainerd/Baxter's economy depends on it not happening.

You can't accomodate all those folks in their automobiles and still have a walkable community. Not without new investment in things like sidewalks, structured parking and street improvements to slow traffic and create attractive pedestrian environments.

The problem gets worse if you decide you won't invest to create pedestrian connections for the existing suburban style development within the cities. Now you need to figure out how to accommodate even more people who are dependent on their automobile.

You have simply confirmed what I said above:

"this appears to be more an excuse for not making the necessary investments to maintain existing public infrastructure. The idea is that since we don't want to pay taxes to pave the streets, we should just leave the private investments in those areas to be reclaimed through salvage. "

@ Charles Marohn

"@Ross, you would be well served to just say what you think and stop trying to represent what I think."

Let me suggest that the one seeking to misrepresent someone is you. Here is your statement from above. Again, a direct quote:

"For him this is a matter of people paying their fair share. "

I have never said anything like that. Perhaps that is your ideological misinterpretation the issue of "equity".

But, as I explained above and on your blog, equity in this context is not a moral argument about what is fair. It is an argument about the results of disconnecting benefits from burdens in a society that relies on the marketplace to allocate resources.

I got out of suburbia a couple of years ago because I believed I could see some adverse things happening. Property prices were dropping from the outlandish heights county assessors had put on them and it seemed clear those prices weren't going to recover. I was right. I sold for about 2/3 of the assessed value and am glad now I did. Suburbia and we have known it may be coming to an end.

At the end of WWII suburban housing flourished because land was cheap and city properties were expensive. Millions flocked to places where they could have a single family home with a nice yard and decent schools for the kids. City folks looked down on them. Then the worm turned and there was an exodus from the cities, which left them looking like downtown Brainerd or worse.

I believe things will change again and people will seek more urban settings if, but only if, they can have decent amenities at reasonable costs in areas where they feel, and are, safe. For reasons I have never been able to understand it costs more to live in the city than suburbia. It should be reversed where there are more people living closer together there should be more money for fewer improvements, that is fewer acres for streets, shorter routes for water, sewers etc., but in spite of that city taxes are higher. This needs to change.

Here's a novel idea. Let the

Here's a novel idea. Let the market decide what neighborhoods and what homes look like! In a bad economy, people (in the macro sense) will lose interest in living far from where the work is. Money will be better spent re-habing older homes in town than being spent on new construction on large parcels out of town. To suggest that policy dictating what someone's home looks like is a good idea is as scary as it is rediculous.