Chuck Marohn's talk about Strong Towns last night at the Salem Library was hugely inspiring. And, well attended. I was pleased to see Mayor-elect Chuck Bennett and City Manager Steve Powers there.
Now, they need to take to heart the logical, evidence-based advice Marohn gave to Salem. This town is doing a lot of things wrong. Of course, we aren't alone. Most cities in the United States have fallen into the same traps.
Here's five things Marohn said Salem needs to fix in order for us to become a strong smart town, city planning-wise, rather than a weak stupid town.
(1) End our Ponzi Scheme development approach.
This truth is at the core of the Strong Towns philosophy: almost always, building new roads, water lines, sewers, and such doesn't pay off in the long-term. Even if private developers pay the full bill for the initial infrastructure construction, the increased taxes generated by the new development isn't nearly enough to pay for maintenance of what has been built.
Roads need to be repaired. Water and sewer lines break, or need to be replaced.
So since the new development isn't generating enough revenue to pay for long-term maintenance, Salem has to keep playing the Ponzi Scheme game: keep building new stuff that produces short-term revenue, but long-term debt.
This Strong Towns slide that I found on another blog post about a Marohn talk shows how the scheme works. For a while, the City of Salem gets positive cash flow from new development, especially when a developer pays the full infrastructure bill.
But after a few dozen years, or even before, the publicly-owned stuff that has been built -- roads, water lines, etc. -- needs to be fixed. Now the cash flow turns highly negative. The money that's been coming in from the new development is way less than the money needed to maintain that development over the long-term.
So this is why the City of Salem can't afford to maintain our town's parks, but City officials want taxpayers to spend hundreds of millions of dollars on a new bridge and new streets. The Ponzi Scheme keeps on scheming, until citizens say "No more! Stop the craziness!"
(2) Fix what we have first; build new stuff last.
"We are fools if we build more," Marohn, who toured Salem yesterday morning, said. He made similar negative comments about the $500 million proposed Third Bridge several times during his talk.
As noted above, his main theme was that cities can't afford to build costly infrastructure that costs way MORE money to maintain over coming decades. "How much does your tax base have to go up to pay for this project?" he asked.
The answer is that there is no way the economic benefit of the Third Bridge is going to exceed the costs. This is how cities like Salem go broke: they make stupid, rather than smart, decisions about how to grow.
In a Q and A session, City Councilor Tom Andersen asked Marohn, "Is it wisdom or folly to be building new roads and bridges when we can't fix what we have now?"
Marohn's answer: folly.
He offered up the analogy of someone wanting to build an addition to their house, but not first fixing the leaky roof. Large infrastructure projects almost never pay off financially, Marohn told us.
As we've seen from the chart above, they look good on paper for a number of years, but when it comes time to maintain and repair them, the costs bankrupt a city like Salem because the projects don't generate enough economic activity to make them worthwhile.
(3) Downtown and lower-income neighborhoods need to be priority #1.
Marohn showed this slide last night, a comparison of the economic vitality generated by dense mixed-use development compared to sprawling suburban development. Here's what a Easton, Pennsylvania blogger said about this after attending a Chuck Marohn talk in his own town:
Using examples from his home town of Brainerd, Minn., Marohn showed how even the most run-down city blocks generate more value to a community than suburban-style new development.
City blocks generally hold several properties, all individually paying taxes and requiring less infrastructure, while suburban-style development will generally support only one property or business on the same amount of land. Therefore, the "old" planning style will generate more tax revenue while costing less in the way of municipal services and maintenance than the single property.
Additionally, this old style of planning lends itself to building reuse, while when suburban shopping centers and big box stores go out of business, they are hard if not impossible to repurpose.
Last night Marohn showed other slides that gave a graphical view of the most economically vital areas of a typical town. It isn't suburban places like south Commercial Street. Rather, it is the downtown area, and the older more densely populated neighborhoods that surround downtown.
THIS is where City officials should concentrate on spending public funds. But they aren't.
The core of Salem is a net financial plus for the City of Salem, while sprawling suburban development is a net minus. So why is so much attention given to expensive road improvements in the suburbs, when that money would be much more wisely spend on bike paths, neighborhood greenways, streetscaping, and such in Salem's central area?
Answer: the unwise Ponzi Scheme mentality.
(4) Stop stupid subsidies to developers and corporations.
Marohn was highly critical of the tax subsidies City officials routinely give to both local Salem developers (like Mountain West Investments for the old Boise Cascade site along the riverfront) and corporations seeking an incentive to locate here (like property tax breaks given to occupants of the Mill Creek Corporate Center).
He said that tax subsidies no longer work, so it doesn't pay to offer them, adding "We have a name for paying someone to love you." Or more accurately, pretend to love you.
The City of Salem shouldn't be prostituting itself to lure developers and corporations into its economic development fantasy room. As is evident by the fact that Portland and Eugene are kicking Salem's butt when it comes to attracting high-growth, high-wage companies, Marohn said it is important for us to "build up our cultural presence so high-quality people move here."
The kinds of companies Salem wants desire a high-quality work force.
So the old notion of "Build it and they will come" doesn't work anymore. Witness the mostly unoccupied shovel-ready Mill Creek Corporate Center. If a city isn't highly livable, and thus attractive to skilled, educated, creative people, it isn't going to attract businesses that need those sorts of people as employees.
(5) Embrace bottom-up, not top-down, development.
Marohn started off his talk by showing photos of his home town in Minnesota in the early 1900s. Here's a similar one of Salem that I found online.
He pointed out that back then cities didn't have complicated zoning codes, rooms full of planners, voluminous rules and regulations. They just grew. What worked, remained and was built on. What didn't work, faded away.
This was also true for Ur and Rome, Marohn said. Humans have experimented with what makes for a vibrant, vital, livable city for thousands of years. In the not-so-old days, Salem and other towns grew organically, from the bottom-up.
But when an autocentric era really took off after World War II, the United States began a very rushed experiment with suburban sprawl and car-focused urban planning. The experiment has failed, in large part because people haven't sat back and taken a calm, cool look at its results.
I like how Marohn isn't easy to categorize.
He creatively melds conservatism and liberalism in his Strong Towns philosophy. For example, rather than have strict top-down zoning rules that typically keep residential and commercial uses separate, Marohn favors what basically is a "whatever works for people" approach.
If a convenience store fits with the needs and desires of a suburban neighborhood, why not allow it? Try many small inexpensive experiments, not a few hugely costly ones (like a billion dollar Third Bridge).
Marohn told us that bottom-up innovations are chaotic but smart, while top-down planning is orderly but dumb.
Salem doesn't need more of this -- orderly sprawl that costs taxpayers way more than it benefits them.
Rather, Salem needs more dense old-style "chaotic" development that is way more interesting, creative, and economically vital.
Great summary Brian! Thanks. The biggest takeaway for me was when he talked about how poorer residents of a community tend to subsidize richer residents. He said this when he was showing the slide of Lafayette, LA, which was the best slide of the bunch for me. Lois Stark asked him to repeat it in the Q&A, just to make sure that's what he said. Yup, that's what he said. Because the infrastructure in older, poorer parts of town was bought and paid for years ago and is not being maintained like it should, property taxes from those places are flowing to the fringes of town to fund new development. I'm sure it's true in Salem.
Posted by: Jim Scheppke | October 06, 2016 at 03:11 PM
Excellent recap! I'm saving (and sharing). The path is so clear. Do you really think our new mayor will be on board? I can tell you our neighborhood associations mostly will be. The bit about poorer against wealthier neighborhoods will probably take some deft negotiations.
Very inspiring evening. Hope he comes back!
Posted by: Maren Wryn | October 06, 2016 at 03:43 PM
You left out one great idea, Brian:
In order to free up more land for housing, we need to divert I-5 southbound onto Portland Rd.
We need to divert I-5 Northbound onto Commercial St.
I-5 travelers will dump into downtown Salem, wander around lost and eventually find themselves on the other side, back on I-5.
If it's good enough for HWY 22 East & West,, It will work for I-5.
Then remove the vacant lanes of I-5 from Portland Rd to Commercial St and allow housing development.
I'm sure that you have already thought of this brilliant idea, Brian.
Just a reminder...
Posted by: Harry Vanderpool | October 06, 2016 at 07:29 PM
Posted by: Walker | October 08, 2016 at 02:53 PM