"Dare I say it? Sprawl is "Ponzi scheme,"Lee Myers told the assembled audience of a dozen or so working architects and developers yesterday during a noon hour box lunch presentation.
Just to remind you, a Ponzi scheme uses funds from later investors to pay-off earlier investors, giving the impression of greed enticing growth, drawing in more investors, who in turn have to be paid off by the next round of suckers. Soon or later, the whole house of cards collapses and people like Bernie Madoff end up going to jail, often leaving behind financial devastation and sometimes suicides in their wake.
In a similar, but far less manipulative way, America has been involved in a vast Ponzi scheme (https://en.wikipedia.org/wiki/Ponzi_scheme) since the 1950s. Cheap oil and land fueled the "American dream" for half a century, creating vast tracts of low density development and the infrastructure around which it was built: roads, bridges, sewers, gas lines, water mains. And the further out we built, the more we drove and the more gasoline we consumed. That was good for Detroit, good to Standard Oil, and good for the government, both federal and state who collected taxes not only on all that property but also on all that petroleum, which after 1970 came increasingly from foreign sources.
As Beth Osborne explains in our video interview, as long as Americans drove 2-3 percent more miles each year, the revenues from motor fuel excises taxes pretty well kept up with the growth in new road construction. That enabled Congressmen to lobby for and often receive funding for their "constituents" pet projects.
So, more roads meant more development, more homes, more schools, more shopping centers, etc. The trouble is, that growth in miles driven and fuel consumed has pretty much plateaued. We've effectively built more than our tax dollars can pay for in terms of maintenance and replacement.
In an amazing coincidence, I interviewed Ms. Osborne, who previously oversaw the Department of Transportation's TIGER grant program and now works for Transportation for America, just before driving over to the University of Nebraska Omaha campus for box lunch lecture hosted by the Nebraska Flatwater Chapter of the U.S. Green Building Council. The topic turned out to be essentially the same message found in her report, "New Principles for Our Transportation Program," but put into a local perspective. https://tcf.org/content/report/new-principles-transportation-program/
After highlighting all the exciting infill condo and apartment projects doing on downtown, Myers pointed to a plan in the works to build a costly beltway around Omaha, starting just a few miles south of our home. Proponents of the project apparently believe it will spur economic activity in the Sarpy County, which is part of the Greater Omaha metro area.
Myers, on the other hand, who lives in one of those new infill developments, having moved from the suburbs, argues that the project and a related development in northwest Omaha will "suck up" all the street, road and highway funding for years to come, essentially stymieing efforts to repair or replace existing infrastructure that is aging.
That's exactly the point Osborne makes, citing the example of Cleveland, Ohio, which doubled in land area since 1948, but hasn't changed much in terms of population. There are about the same number of people, they're just spread out more. With that low density sprawl comes "ten times" the amount of supporting infrastructure, she points out.
In plain language, there's now too much stuff to take care of and not enough people to tax to pay for it. That's why Myers calls it a "Ponzi scheme."
So, what's the solution? Osborne's report, written for the Century Foundation and the Bernard L. Schwartz Rediscovering Government Initiative, offers four recommendations to the "next President" of the United States, starting with the obvious:
"Repair the current system first. The bulk of federal funds should go to states and transit agencies for maintenance and replacement projects. Only after repair needs are addressed should money go to new projects."
Unlike Bernie Madoff's scheme, there really are no "villains." We're all guilty: politicians who want to please their constituents, federal officials who oversee the funds, state highway planners who spend it, often without oversight or even logic.
Whether the next U.S. President, "whoever she is," to quote President Obama, listens and acts, remains to be seen. We have been warned and the house of cards is starting to teeter.
First Published: 2016-05-18
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