Themes

Raw Notes

• In public spaces, people naturally gravitate toward the edge and stay to the sides. Jane Jacobs talked about this as did Christopher Alexander in “A Pattern Language”
• Humans have a natural disposition toward symmetry. We process symmetrical designs more quickly and it subconsciously activated our smiling muscles.
• We developed our American cities in an era of abundance where we could afford to not be efficient and we could ignore issues by just building more and going bigger.
• Post ww2 we built highways to places outside of the city, going right thru the city and also gutting the city land value by spreading out huge suburbs. This was great for the middle class who didn’t have access to those land values, but it completely gutted our cities, which took decades to rebuild and recover
• Public sector of a city always backstops private land development, either with money upfront or my assuming the risk of the project by assuming the long term maintenance obligations before the tax base of the project has matured.  This wasn’t always the case, but is the way things work today. This has enormous impact, bc once a place is developed, the long term maintenance the city provides becomes a sunk cost. This blunts the intensely motivating premise of financial failure and replaces it with the abstract notion of political failure
• Need to organize cities around incentivizing shared growth. The opposite happens today - someone buys home on culdesac and they will do everything in their power to make sure no one else does, they’re incentivized to lock others out.
• Cities are playing infinite games, which has a tension with the more finite games that the inhabitants of the city are playing
• It’s not hard to calculate the financial stability of a certain investment in a city. The author talks about a simple maintenance project on his culdesac road. He and his neighbor paid for half of it, and the city paid for the other half. Base on that cost, it would require 40+ years of property tax just to pay back the city’s half, and that’s not even considering that property tax is going to be allocated to many other things
• Many improvements are never able to cover their own basic expenses, or would take many decades even to cover the interest payments on loans taken out by the city to pay for the expense. The author shared his findings with colleagues, but they said he wasn’t taking into account the value of job creation. But where in the municipal revenue stream does “job creation” show up? In the city the author was looking at, there wasn’t a municipal level income tax. There was no way to distinguish between a municipal investment that created jobs and one that did not.
• Lets take two cities, one his Job City and one is Housing City. Everyday 1,000 people from Housing City goes to Job City to work. In a city where municipal activity is funded via a property tax, Housing City has no jobs but it has 1,000 homes it can tax and receive revenue from. Jobs City has 1,000 more jobs but has no revenue from those jobs it is creating. The same can be said of sales tax. Sales Tax can be at the city level, but it often goes to the state, not the city, so even though the city is the one attracting all the major retailers and the commercial activity, that revenue from the commercial activity doesn’t show up in the municipalities revenue stream. How do you then measure the impact that the city is having, or appropriately compensate the city for that activity? How is the city supposed to pay for all the infrastructure it created and maintain on an ongoing basis to enable that commercial activity to happen?
• “It is difficult to get a man to understand something when his salary depends on his not understanding it.” - Upton Sinclair
• It seems like the more our cities build, the poorer they become.
• A lot of municipal growth is a Ponzi scheme. Local officials want to show growth so that they get cash upfront in the short term, but that growth is funded by long term liabilities that will never be paid off. And the cycle continues with each new official.
• Consider an ideal scenario where a developer comes to town, brings outside money to develop a building in an area. They follow all the rules and regulations, they’ll even install and pay for all the required roads and streets sidewalks pipes pumps valves etc. the only thing they ask for is for the local govt to take over the responsibility of the long term liability of maintaining the property, that’s police, fire protection and basic maintenance provided by the city. This by the way is an ideal scenario, one that is very rare. Most places ask for concessions from the city. In many places, it would even be illegal for the city to choose a deal like this.
• So lets say the deal happens. Tax revenue jumps up in the near term. Let’s say the gov’t even puts it aside - this is also not likely, as a people often don’t want the gov’t to horde cash for a later date. It would only look like the original deal was insolvent almost a generation later when everything had to be fixed and maintained. So instead, cities say, lets just have more growth, then we can use the new tax revenue to pay for the old fixes, and so on. So the more a city grows this way, the deeper into future insolvency it pushes itself. This is not without reason - imagine if new buildings kept coming in at a steady pace, then the tax revenue would accumulate at a steady pace, especially if the gov’t put that money aside. So in year 25, when that first maintenance liability comes due from that first building, the city can draw on the huge pile of cash it saved, it’s not a big deal bc the money is there from all the growth. But each new development makes them more insolvent in the long run. If each new development operates at a loss, it doesn’t mean that the whole thing can operate at a profit at a certain volume. Growing in this pattern just buys time, and time makes the urgency to grow even greater. Cities today are now defined by the liabilities from decades of past unprofitable development are now coming due - all the miles of roads and pipes etc. The growth we paid for didn’t create enough prosperity to pay for it all. And if the gov’t bailed out local gov’ts, they’re only doubling down on wealth destroying investments, buying time in a race to the bottom. Pension payments are often considered the tragedy of our time with regard to this framework. The city negotiated with unions for lower pay today for more pensions tomorrow, and the city spent the money they saved today on what ultimately were money losing endeavors, and it wasn’t guaranteed that the invested money for pensions would be at the level they promised. We just assumed everything would keep growing.
• The unfortunate thing is that this is human behavior. It’s called Temporal Discounting - essentially we are hardwired to think short term. This makes sense evolutionarily, being able to capitalize on opportunity immediately would have been key to survival. Jared Diamond describes this in “The World Until Yesterday.” He says a hunter gatherer perfect male physique would allow him to gorge on food he found in abundance, convert that into fat, and slowly burn that over time so that he could survive until his next meal. That served us really well in a world without an abundance of food. It’s a great irony of evolution, that the qualities that helped us survive helped us create a world in which we didn’t need to rely on those innate qualities for survival, but we still have those innate qualities, and they don’t serve us well in the world we created. Instead they lead to obesity, diabetes, etc.
• Its survival of the most adaptable, not survival of the fittest.
• Detroit is an easy case study in all of this, altho no cities ever think they will be Detroit. Detroit really was one of the greatest cities in the world prior to the Great Depression. But they were the first to create automobile suburbs. The first to experience really commuting to the city by day and leave in the afternoon. First to run major roadways thru their neighborhoods. First to create massive parking structures. They were the first to transform cities into what we think of today as the modern American city. And when the Great Depression happened, Detroit did very well compared to the rest of the country. So by the end of WW2, we decided we need to copy the success of Detroit - take a prosperous city, spread it out over a huge area at enormous cost, and bisecting the city the major roadways, and then saddle it with decades of liabilities, you get Detroit. Detroit isn’t the anomaly, it was just the first to do it. Like most bankruptcies, it happens slowly, and then all at once.