Category Archives: Land use & development

Surprise — People Who Live in the Burbs Like Living There

Suburban living -- people seem to like it.

Suburban living — people seem to like it.

Americans living in the suburbs are more satisfied with their communities overall than their counterparts in urban or rural areas, finds the new Atlantic Media/Siemens State of the City Poll. Eighty-four percent of suburban residents rated their communities excellent or good, compared to 75% of urban dwellers and 78% of rural residents.

That finding seems all the more significant given the strong pro-urban bias of Atlantic Media, which publishes the Atlantic CityLab. A major theme of CityLab is how city centers and downtowns are undergoing a renaissance, reflecting a profound shift in American preferences for urban living over suburban living. It cannot have been easy for CityLab to conclude, “When it comes to overall community satisfaction, the suburbs are still king.”

But a closer examination of the data shows that conclusion to be almost meaningless — and that’s before considering the methodological issues related to divvying up the country into “urban,” “suburban” and “rural.” (CityLab acknowledges that some “suburban” areas are hard to distinguish from “urban” and others hard to distinguish from “rural.”) The poll results released yesterday don’t tell us what it is about “suburban” versus “urban” that people like or dislike.

Urbanism advocates generally argue that the preference for the urban way of life resides in its human settlement patterns — more compact development, walkable streets, transportation options and availability of amenities not found elsewhere. I would argue that those urban advantages were overwhelmed by unrelated issues such as inner-city poverty, crime, troubled schools and higher taxes, which drove whites and middle-class blacks into the suburbs. Any analysis needs to distinguish between the human environment and the built environment.

According to the Atlantic Media/Siemens data, white people, college-educated people, homeowners, older people, people with higher incomes — all categories with a high degree of overlap — tend to be happier with their communities than non-whites, less-than-college educated, younger, lower-income Americans. What a surprise. People with greater financial resources gravitate to the more desirable neighborhoods and are happier as a result. Who would have thunk it?

In coming weeks, CityLab will explore its findings relating to crime and policing, transportation, education, housing, energy and infrastructure. I expect those findings will be more revealing.

– JAB

Overruns, Subsidies and Pollution

Tide Light Rail in downtown Norfolk. Photo credit: Hamptonroads.com

Tide Light Rail in downtown Norfolk. Photo credit: Hamptonroads.com

by James A. Bacon

Randal O’Toole, the Cato Institute’s transportation scholar, has penned a devastating take-down of Norfolk’s light rail system, the Tide. The rail line, which opened in 2011 60% over budget and 16 months late, ran operating losses of $12.5 million in 2012, about double projections. Farebox revenues covered about 5% of operating costs. Hoped-for redevelopment around the Tide’s eleven stations has yet to materialize. (The post is supposed to appear on O’Toole’s blog, The Antiplanner, but I could not find it there. I am relying upon an email version.)

Now, says O’Toole, the editorial writers at the Virginian-Pilot want to compound the folly by slashing fares from $1.50 per trip (before discounts), among the lowest in the nation, to $.50 in a desperate bid to jolt ridership and stimulate economic development. The problem with that idea, he says, is that it cannot generate sufficient ridership to encourage developers to build around the train stops. The idea would expand the operating deficit while doing nothing to build the property tax base.

Ironically, light rail, much beloved by environmentalists for taking CO2-emitting cars off the road, is more energy-intensive at low levels of ridership than automobiles. Writes O’Toole: “Norfolk’s rail line uses far more energy than cars: 5,400 BTUs per passenger mile in 2012 compared with an average of less than 3,400 for cars and 4,100 for light trucks (and 3,7000 for Hampton Roads buses).”

O’Toole continues:

Rail transit is supposed to be about bringing large numbers of people into major job centers. But there are no major job centers in the region, or at least none served by the Tide rail line: Norfolk has only about 24,000 downtown jobs, less than 3 percent of the metropolitan area. Transit subsidies are also supposed to help low-income people who don’t have cars reach jobs, but the 2012 American Community Survey found that only 2.6 percent of workers in the Norfolk-Virginia Beach urban area lack cars, and half of them travel to work by car, while only 32 percent ride transit.

In fairness to the Tide, the rail line’s financial performance has improved since 2012. A mid-2014 review indicated that farebox recovery had increased to 17.7% and the operating cost had declined to $3.4 million (or $6.8 million annualized).

Still, even the updated numbers call into question the wisdom of extending the line to the Virginia Beach resort district, a project that could cost more than $1 billion. Does Virginia Beach really want to spend hundreds of millions of its own money (the state and feds would pick up much of the tab) for the privilege of creating a permanent subsidy and tax drain at a time when Americans are driving less and congestion is easing?

Bacon’s bottom line: Mass transit is a great idea… when it works. But the fact that heavy rail has done wonders in New York City and the core Washington metropolitan area does not mean that light rail will have a similarly transformative effect in a sprawling, low-density metro like Norfolk-Virginia Beach. You can’t force-feed mass transit. Commuter rail requires high-density, mixed-use pedestrian friendly development around rail stations. That land use pattern does not exist in Norfolk/Virginia Beach right now. It will take appropriate zoning, years of re-development and public investment in creating walkable streets before there is any chance of generating sufficient ridership to justify the investment.

There is a logical progression for mass transit: Serve a transportation corridor with scheduled bus service and support it with higher-density, mixed-use rezoning. If and when sufficient redevelopment occurs along the corridor to support it, upgrade the service to Bus Rapid Transit. If and when sufficient redevelopment occurs to support another phase transition, upgrade the route to rail. That process could well take decades, too long a time to satisfy impatient environmentalists who want to save the world now. But it would be fiscally sustainable in an era in which Virginia local governments are increasingly hard-pressed to meet their obligations.

Meanwhile, the Uber-Lyft revolution continues to roil the transportation industry. Using smart phones to connect drivers with riders and writing algorithms that optimize the distribution of fleet vehicles serving different price points and demographics (Cadillacs for rich riders, vans for poor riders) could render much of our transportation infrastructure obsolete. I’m still waiting for a politician who says it’s time to prioritize ride-sharing over mega-road and transit projects. Surely, there’s someone out there!

Sharing Information to Gain Competitive Regional Advantage

by James A. Bacon

Very different models of regional competitiveness are emerging as people think seriously how to harness the power of smart cities. In metropolitan regions like Charlotte, Seattle and San Diego, for example, major property owners are collaborating with municipalities and power companies on communal energy-efficiency initiatives.

Tapping the potential of “smart grids” is a great idea. But that’s just a start. Udaya Shankar, a vice president with Xchanging, sees smart buildings as the foundation for smart cities. Writing in IoT World, he recommends that smart buildings pool information for mutual benefit. “When buildings operate in a silo, we gain no insight into the effects one has on the other, and if a smart city is the sum of its parts then there is something to be lost in keeping them separate.” He envisions a future in which smart buildings connect and talk to cities and to one another.

It’s an intriguing premise. Shankar provides few examples of what kind of information sharing property owners can share, but we can think of a few.

Smart grid. Almost all smart buildings draw electricity from the electric grid. They monitor their consumption carefully and have some flexibility as to how much they consume and when. Sharing this information can help the power company optimize its generation and transmission assets, benefiting everyone through lower rates.

Water. All smart buildings consume water. In many municipalities leaking water pipes is a major issue (up to 20 percent of all water is lost through leakage). Sharing of usage data can help water companies identify leaks, reduce water loss and delay the need for expensive capacity expansions.

Parking. Many smart buildings maintain parking assets for their employees: either open parking lots or parking garages. Sharing information about parking capacity and usage can help cities better match parking supply and demand. By optimizing the amount of valuable urban land dedicated to parking, cities can convert excess parking to more productive uses that yield more taxes.

Lighting. Cities operate street lights. So do many smart buildings. Sharing information can allow cities and building owners to reduce the wattage needed to light public spaces, thus conserving electricity and curbing light pollution.

Security. Smart buildings typically are equipped with security cameras to provide added security for occupants. Sharing video feeds with the city can provide law enforcement authorities with more eyes on the street, helping prevent and solve crimes.

Transportation. Smart cities utilize a variety of strategies — mass transit, walkable and bikeable streets, road improvements, car- and van-pooling — to manage traffic demand, many of which require cooperation with employers. Sharing information about employees and their transportation needs can help cities fight congestion.

We’re moving into a world where the sharing of information confers competitive economic advantage. Here in Virginia, we should start by encouraging state agencies and local governments to open up their data — not just to link to it from websites but to make it available so anyone, whether a business enterprise or a civic activist, to add value to it. Then we should start creating mechanisms whereby building owners can share information with local governments to tackle public challenges ranging from energy conservation to traffic congestion.

Communities that move first will gain competitive advantage. Those that are slow to adapt will fall behind.

Let the Grass Grow Free

Native meadow grass

Native meadow grass

There’s a movement afoot in Henrico County to make it easier to grow grass. Not marijuana. Meadow grass.

Lawns are one of the banes of suburbia. They are biologically sterile, supporting very little wildlife. They require constant maintenance, including applications of fertilizer that washes into the watershed and causes algae blooms in the Chesapeake Bay and its major tributaries. They hold little water during a downpour, contributing to the problem of storm water management. Last but not least, they require mowing, and small, inefficient lawnmower engines contribute disproportionately to air pollution. As a society, we’d be better off without lawns. Just one little problem: Homeowners love them.

If people want to keep their lawns, that’s fine with me. But people who want to convert their lawns to prairie grass should be free to do so. Trouble is, they can’t. Suburban county ordinances require homeowners to cut their grass.

In Henrico County, according to the Times-Dispatch, land within 250 feet of a residential property must be cut to a foot or less in height. But the Board of Supervisors is considering an ordinance that would loosen that restriction to 150 feet, and even 50 feet if a property owner is involved with a bona fide conservation program.

“This is a very positive step that the county is taking,” said Nicole Anderson Ellis, chairwoman of the Henricopolis Soil and Water Conservation District Board. “We had a case where somebody wanted to let their property go natural, and there really wasn’t a mechanism to allow that under the code.”

– JAB

The Chuck and Joe Traveling Municipal Salvation Show

The Joe and Chuck Traveling Municipal Salvation Show

Joe Minicozzi (left) and Chuck Marohn

Chuck Marohn and Joe Minicozzi, principals with Strong Towns and Urban3 respectively, travel the country telling cities, towns and counties how to build better communities while remaining fiscally solvent. I have borrowed heavily from both Chuck and Joe in my writing about land use, transportation and community building, and it’s reassuring to see that as their own thinking evolves, it has moved in concert with mine.

Most recently, Chuck has blogged about the paucity of useful information cities have to guide them in make zoning and capital spending decisions. He makes many of the same points I did in my recent post, “How Planners Can Rescue Virginia from the Fiscal Abyss.Writes Chuck:

Despite running corporations (most cities are “incorporated” municipalities) that have billions of dollars in assets and liabilities and annual cash flows in the tens, and sometimes hundreds, of millions of dollars, few ever ponder some shockingly simple questions.

  • What are our total assets, the value of the tax base that constitutes our community’s wealth?
  • What are the long term obligations for infrastructure maintenance associated with sustaining those assets?
  • In terms of geography, what parts of our community have a positive Net Present Value (cash from long term assets minus the cost of long term liabilities) and which have a negative Net Present Value?

The answers to these questions constitute a community’s balance sheet, the most basic of accounting requirements for any family or business but one which cities largely ignore. …

Since we don’t know the answer to these basic questions, we can’t even begin to ponder some more sophisticated, but obvious, things that all cities face.

  • How does that tax base change in response to certain policy decisions?
  • What types of land use patterns create the most wealth for the community?
  • What types of land use patterns experience the greatest degree of volatility?
  • How does a park impact Net Present Value? How far from the park does that effect extend?
  • How does a stroad impact Net Present Value? How far from the stroad does that effect extend?
  • Where can we deploy limited resources to have the greatest overall impact?

Keep up the good work, Chuck and Joe!

– JAB

State Workers: GiftGate’s Unsung Heroes

mcD.pixBy Peter Galuszka

The McDonnell corruption trial, now going into its third week, is an enormously sad and tawdry affair bringing shame on the defendants and the prosecution’s key witness, businessman Jonnie R. Williams Sr.

Yet there are heroes — state employees. A number of them have testified over the past week that they sensed that something stunk with the way Williams, who has no formal science training, relentlessly pushed his questionable product and maneuvered to get the state’s prestigious universities to put their imprimatur on it so it could move from being a low margin neutraceutical to a real and profitable pharmaceutical.

“Perhaps the only gratifying aspect of the trial last week was the extraordinary professionalism of the Virginia bureaucracy,” Richmond political analyst Bob Holsworth told the Richmond Times-Dispatch.

He’s spot on. One reads so many attacks on government workers among more conservative writers who see public workers as slow-minded except when it comes to tying business up with regulations — the theory goes. Private workers build wealth and create products. Public workers live off the taxpayer’s dime and should be fired in droves, one theory goes.

Not true in the McDonnells’ case. Tae Health and Human Resources Secretary William Hazel. Former Gov. Bob McDonnell pushed him, including with late night-emails, to set up meetings to promote Williams and his Anatabloc product.

Hazel responded with not only brave professionalism but common sense. “I wouldn’t put the stuff in my mouth,” he testified. When Williams gave him samples, he didn’t put it down in his disclosure forms because “I didn’t think it had any value.”

Hazel is a serious doctor of medicine, honed by science and reason. Someone like that just isn’t going to be swayed by a business hustler with a private jet, Ferrari, various vacation homes and a gigantic credit limits on his cards.

Other heroes and heroines appear to be some of McDonnell’s staff such as Sarah Scarbrough, former director of the Executive Mansion, who worried about Maureen McDonnell’s “mental capacity” and campaign manager Phil Cox who was upset when Ms. McDonnell pushed Williams’ little pills on Ann Romney, the wife of the GOP’s 2012 presidential candidate.

Somewhat less impressive are other witnesses from Star Scientific, Williams’ former company. Former Chairman Paul Perito claimed that he had no idea just what Williams had given the McDonnells and how deeply he had gotten into  the muck with them.

Last summer, I was spending a lot of time reporting on Star and admit that I could never figure it out. Williams’ seemed like money-losing huckster — someone so over-the-top that he could be easily seen through. Yet the other officers and directors at Star, like Harvard-trained Perito, seemed solid.

Perito nixed McDonnell’s campaign to become a paid board member of Star (she’s hardly qualified) and he seemed stunned when Williams’ told him in 2013 that he’d been interviewed by the FBI and state police. It raises questions about Perito that he didn’t know of all of this much sooner.

Still, many Virginia workers caught up in this farcical mess deserve credit for sticking to their guns and professionalism. Hats off to them.

Union Presbyterian and the Parable of the Buried Talent

union_presby James A. Bacon

Union Presbyterian Seminary settled into its current location off Brook Road in northside Richmond in 1898, when industrialist Lewis Ginter donated land to the educational institution from the streetcar suburb he was developing. The seminary has been a good neighbor ever since, leaving a large tract of the land vacant as a park open to the public. Now the seminary needs some of that land to build new housing for seminary students and their families in place of antiquated housing that it provides at present.

The neighbors are up in arms. Many people who live nearby, it appears, are worried about the loss of open space, traffic and the impact on property values, according to the Times-Dispatch. A “crowd of hundreds” packed a meeting in the seminary auditorium when the institution unveiled a proposal to build 349 housing units. At one point, some in the crowd erupted in loud boos.

I find this extraordinary. Who do these people think they are? It’s one thing if the City of Richmond decided to sell a public park to a developer. It’s quite another when a private institution, which has been a foundation of the community for more than a century, wants to sell the land in order to preserve the viability of that institution. The seminary owns the land — not the neighbors!

The Presbyterian denomination has fallen upon hard times. The number of adherents is shrinking. Between 2008 and 2011, the denomination closed churches at the rate of 75 to 80 per year. Under the 2009-2014 strategic plan, Union Presbyterian slashed its budget by $3 million, reduced the number of students to 180 FTEs, and cut its faculty from 32 to 22.5 FTEs to align with the smaller student body.

Now the seminary is seeking to raise $75 million to reinvent itself — in effect, to stay relevant in a changing world. According to the 2014-2019 strategic plan, the campaign has raised $27.2 million, but achieving its goals also requires maximizing the value of its real estate holdings that have long laid dormant.

Here’s the killer. According to the T-D, the seminary could extract even greater profit from the property by building at greater density, as allowed under existing zoning, or by selling the land on the open market. It is not pursuing those options. The seminary wants to be a good neighbor. “We’re trying to do what’s right by the community and what’s right by the seminary,” said Andrew M. Condlin, a local land-use attorney.

Apparently, that’s not good enough. Some attendees took exception to the idea of the seminary erecting a four-story building at the corner of Brook and Westwood — as if a four-story building would be out of character for a higher ed setting!

They’re worried about traffic, too. Have these people been possessed by Beelzebub? The housing would be occupied by seminary students who would walk to the campus across the street! OK, some students might be married and have kids. Gee, spouses might drive to their jobs or run errands. I’ve driven on those Northside Streets and they are way under-utilized. Traffic fears are utter nonsense.

As for property values, adding quality density development will increase the value of property along the Brook Street corridor, not diminish it. More to the point, maybe the neighbors had better focus on what would happen to property values if Union Presbyterian closed its doors! Imagine the impact if the buildings were vacant and the landscaping was going to pot?

The incident brings to mind the parable of Jesus and the talents:

For it is like a man going on a journey, who summoned his slaves and entrusted his property to them.  To one he gave five talents, to another two, and to another one, each according to his ability. Then he went on his journey.  The one who had received five talents went off right away and put his money to work and gained five more. In the same way, the one who had two gained two more. But the one who had received one talent went out and dug a hole in the ground and hid his master’s money in it. After a long time, the master of those slaves came and settled his accounts with them. The one who had received the five talents came and brought five more, saying, ‘Sir, you entrusted me with five talents. See, I have gained five more.’ His master answered, ‘Well done, good and faithful slave! You have been faithful in a few things. I will put you in charge of many things. Enter into the joy of your master.’ The one with the two talents also came and said, ‘Sir, you entrusted two talents to me. See, I have gained two more.’ His master answered, ‘Well done, good and faithful slave! You have been faithful with a few things. I will put you in charge of many things. Enter into the joy of your master.’ Then the one who had received the one talent came and said, ‘Sir, I knew that you were a hard man, harvesting where you did not sow, and gathering where you did not scatter seed, so I was afraid, and I went and hid your talent in the ground. See, you have what is yours.’ But his master answered, ‘Evil and lazy slave! … You should have deposited my money with the bankers, and on my return I would have received my money back with interest! Therefore take the talent from him and give it to the one who has ten.

For years, Union Presbyterian had done the functional equivalent of burying its talent in the ground — to the benefit of its neighbors. It can no longer afford that luxury. It’s time to put that asset to work. Jesus understood how capitalism functioned and cited approvingly the investment of money to make more money. (He also thought that the kingdom of God was at hand and urged his followers to give their money away, but that’s a different issue.) The seminary is acting entirely within its rights. The neighbors ought to be darned grateful their input was solicited at all.

The people at Union Presbyterian are far too nice to say this but I will: It’s time for the neighbors to stop bellyaching over trivial inconveniences and time to help make sure the seminary is still around another century from now.

Williams: How to Reach the High and Mighty

Photo by the Richmond Times-Dispatch

Photo by the Richmond Times-Dispatch

By Peter Galuszka

The McDonnell corruption trial has its high and low moments. One theme stands out: the trial is a guidebook of how to gain broach and compromise the power elite of Virginia politicians, in this case the Republicans.

Here are a few takeaways:

  1. Want to break in? Having a private jet is a must, testified former Star Scientific CEO Jonnie R. Williams Sr., also the government’s star witness with immunity from prosecution. By offering the jet to politicians and aides, you a captive audience for the length of the flight. Williams said he got up to six hours of almost undivided attention from Robert McDonnell when he and the former governor were flying in his plane across country from a campaign event with the GOP’s Meg Whitman, then running for governor of California in the Fall of 2010. That’s when they started talking in earnest about promoting Jonnie’s products. Richmond’s odd location is a problem with travel. Having your own plane helps the pooh-bahs bypass “ RIC, IAD, and DCA and fly directly to GOP.”

  2. Republicans like living large. Big names impress. Just after McDonnell won the governorship in 2009, he and his wife meet at the Four Season Hotel in Manhattan. Williams was there with his buddy, high fashion male model Brad Kroenig. During that meeting Ms. McDonnell thought it would be a great idea if she could get an Oscar de la Renta dress for the upcoming inaugural ball. Williams bought drinks, but not any drink. He blew $5,000 on a bottle a Louis XIII cognac. Asked by a defense lawyer why he did so, Williams replied, “I actually don’t care for it all that much but some other seem to.”
  3. Looking for funding under strange circumstances? Somehow Virginia’s Tobacco Indemnification and Community Revitalization Commission always seems to pop up. On his cross-country trip with Williams, McDonnell suggested it as a source of research funding for Williams’ Anatabloc dietary supplement., Williams said. Apparently the plan was to get the University of Virginia to ask for research money, keeping Star and the governor a step or two removed. McDonnell encouraged Williams to contact Jerry Kilgore, a former attorney general and partner at McGuire Woods. Jerry, who later became Williams’ lawyer, has a brother, Terry, who is head of the tobacco commission. In an unrelated matter, the tobacco commission was involved with the sudden and strange resignation this summer of state Sen. Phil Puckett just as a key vote on Medicaid expansion was to happen. The plan was for Puckett to take a top-paying, sinecure-type job at the tobacco commission but it didn’t work out once it was publicized.

As the trial continues, there may be other tips for success. I will pass them along as soon as I can.

The Movement Grows

City living -- not just for liberals anymore.

City living — not just for liberals anymore.

Political and philosophical conservatives in the United States are far more likely to live in rural areas or suburbs than in the city  – and that augurs ill for the conservative movement and for America, observes Michael Hendrix, in the inaugural guest blog post in a new blog, “New Urbs.”

Cities are the centers of wealth creation and cultural influence in the modern world. By concentrating disproportionately in small towns and rural homesteads, conservatives isolate themselves from the institutions that dominate the country. “If conservatives feel like they’re on the outside looking in on culture-making now, just wait a decade or so—it’ll get worse,” Hendrix writes. “Both for our culture’s sake and our own, conservatives should learn to stop worrying and love the city.”

If Hendrix’s contribution is any indication, New Urbs is likely to make a lively contribution to the small but growing ranks of conservatives who advocate development of more compact, urbane, fiscally sustainable communities.

The blog is an initiative of The American Conservative. Explains Associate Editor Jonathan Coppage:

This is an emerging discussion on the right, and we’re excited to take a leading role in pushing it forward. Talk of conservative reform can only get so far before it accounts for the actual ways in which people live. Transit, development, zoning codes all shape our culture, and are ripe for conservative engagement. Conservatives have too often neglected cities to their own disadvantage. We aim to fix that.

Keep it coming!

Update: I just came across by a great essay by Matt Lewis (a denizen of Alexandria) explaining why New Urbanism (an urban design movement which bears much in common with Smart Growth) “isn’t just for liberals.” Conservatives, he argues, should embrace it, too.

– JAB

How Planners Can Rescue Virginia from the Fiscal Abyss

This is a copy of a speech that I presented to the Virginia Chapter of the American Planners Association Monday, with extemporaneous amendments and digressions deleted. — JAB

Thank you very much, it’s a pleasure to be here. Urban planning is a fascinating discipline. As my old friend Ed Risse likes to say, urban planning isn’t rocket science – it’s much more complex. Planners synthesize a wide variety of variables that interact in unpredictable, even chaotic, ways. In my estimation, you don’t get nearly enough respect and appreciation for what you do

OK, enough with the flattery. Let’s get down to business.

toastThis is you. You’re toast. Unless you change the way you do things, you and the local governments across Virginia you represent are totally cooked. … Here’s what I’m going to do today. I’m going to tell you why you’re toast. And then I’m going to tell you how to dig your government out of the fiscal abyss, earning you the love and admiration of your fellow citizens.

Why You’re Toast

old_people2Here’s the first reason you’re in trouble — old people. Or, more precisely, retired government old people. Virginia can’t seem to catch up to its pension obligations. The state says the Virginia Retirement System is on schedule to be fully funded by 2018-2020. But the state’s defines 80% funded as “fully funded,” which leaves a lot of wiggle room. The VRS also assumes that it can generate 7%-per-year annual returns on its $66 billion portfolio. For each 1% it falls short of that assumption, state and local government must make up the difference with $660 million. As long as the Federal Reserve Board pursues a near-zero interest rate policy, depressing investment returns everywhere, that will be exceedingly difficult. A lot of very smart people think 5% or 6% returns are more realistic. In all probability, pension obligations will continue to be a long-term burden on localities.

potholesSecond, the infrastructure Ponzi scheme — that’s Chuck Marohn’s coinage, not mine — is catching up with us. For decades, state and local government built roads and infrastructure, typically with federal assistance, proffers or impact fees with no thought to full life-cycle costs. State and local governments have assumed responsibility for maintaining and replacing this infrastructure. Well, the life cycle done cycled, and the bill is coming due. We’re finding that we built more infrastructure than we can afford to maintain at current tax rates, leaving very little for new construction.

accotinkThird, after years of delay, serious storm water regulations are kicking in. Local governments bear responsibility for fixing broken rivers and streams like Accotink Creek, showed here. (Yeah, that’s a creek. It’s having a bad day.) Best guess: These regs will cost Virginia another $15 billion. But no one really knows. And it may just be the tip of the iceberg. I recently talked to Ellen Dunham-Jones, author of “Retrofitting Suburbia,” and she noted that a lot of the storm water infrastructure that developers built in the ‘50s and ‘60s is crumbling. The developers are long gone. Someone’s going to have to fix that, too. Guess who?

property_taxMeanwhile, the largest source of discretionary local tax dollars – real estate property tax revenues – is stagnating. According to the Demand Institute, residential real estate prices in Virginia will increase only 7% through 2018 – the third worst performance of any state in the nation. Don’t count on magically rising property tax revenues to bail you out.

In fact, the tax situation is worse than it looks. Demand for commercial real estate is dismal, too. Consider what’s happening to the retail sector. We’re going from this…

shopping_centerTo this..

amazon_warehouse

Every Amazon.com distribution center represents dozens if not hundreds of chain stores closing. It means more vacant store fronts, more deserted malls, less new retail development. Continue reading