Strong Towns, New Development and Ponzi Schemes

The contents of the following blog:
http://www.strongtowns.org/ are very relevant to Canadian Cities and Towns including our own.

The mission of Strong Towns is to support a model for growth that allows towns to become financially strong and resilient.
The following are three quotes from a series of articles from:
http://www.strongtowns.org/journal/2011/6/13/the-growth-ponzi-scheme-part-1.html



“In yesterday's post we pointed out how cities routinely trade the near-term cash advantages of new growth for the long-term financial obligations associated with the maintenance of infrastructure. Cities pay little for new growth, but receive enhanced revenue from the development. In return, the city assumes the obligation -- and the long-term financial liability -- to maintain the now-public infrastructure.”



“The results are obvious and devastating. When the private-sector investment does not yield enough tax revenue to maintain the underlying public infrastructure, the balance can be made up in the short term with new growth. Over the long run, however, insolvency is unavoidable”


“Examining the underlying finances of our cities at face value, one must acknowledge the following: In order for our development pattern to financially work, the amount of revenue generated by the new growth must ultimately cover the expenses incurred by the public for maintaining the new infrastructure. If cities are not raising enough revenue to repair and replace their infrastructure, the system cannot sustain itself”.

To read all articles just Google the titles or go to the link above.


The Mechanisms of Growth - Trading near-term cash for long-term obligations.


Case studies that show how our places do not create, but destroy, our wealth.


The Ponzi scheme revealed - How new development is used to pay for old development.


How we've sustained the unsustainable by going "all in" on the suburban pattern of development.


The Growth Ponzi Scheme, Part 5 (finale)