Suburbia is Subsidized: Here's the Math

[Nite]

Suburbia is Subsidized: Here's the Math
• Video Link

[kingkirbythe....]

Damn.

[pj3000]

Lovely... and if it were only that easy.

We've long know that urban areas subsidize suburbia, but how do American metros round everyone together when short-term profit is the rule of the day?

[mhays]

I have no reason to distrust them, but they don't get into their methods or what they're counting at all.

[Pedestrian]

Suburbia is subsidized because in the USA it’s where the majority of taxpaying voters want to live. People who vote get what they want. Nothing wrong with that.

[C.]

Nothing new

Think of cost of providing K12 education. In all cases where property taxes fund the majority of the local school board budget, the single-family home with 3 kids is going to be a net drain on municipal finances due to the cost of educating a single student being around $10,000 or more every year while property taxes only collect a couple thousand a year. The downtown one-bedroom condo with DINKs is always going to be a net positive.

Taking education out of it, cost of road maintenance, storm sewer, policing in low density subdivisions are going to be higher than what it costs for a single market rate building on a half acre of land. Where things get tricky if it's subsidized/public housing... these are going to cost more in city services than they generate.

One real world example. In Jersey City, a luxury condo at 99 Hudson was recently constructed containing 781 units in 79 floors. It replaced a parking lot. The city now generates $8.2 million more in annual property taxes from this one building. However, it's not really costing the city any more to service it since the infrastructure was already there. It's not adding new students to the public school system, it has private trash collection, no police calls, etc...

[Nite]

Originally Posted by mhays

I have no reason to distrust them, but they don't get into their methods or what they're counting at all.

They are counting the tax revenue from the property owner vs the lifetime maintenance of the infrastructure servicing that property. only medium and higher densities are a net profit for any city.

[SFBruin]

Receipts were kept.

[hauntedheadnc]

Where's that meme of Nicholas Cage looking wild-eyed and shocked?

[Mister F]

Originally Posted by hauntedheadnc

Where's that meme of Nicholas Cage looking wild-eyed and shocked?

In every Nicholas Cage movie.

[iheartthed]

Originally Posted by Pedestrian

Suburbia is subsidized because in the USA it’s where the majority of taxpaying voters want to live. People who vote get what they want. Nothing wrong with that.

That's not really true. As this video points out, a huge reason that suburbia gets subsidized is because of bad accounting.

[Obadno]

I mean, depending on how you want to define it what isnt in some way subsidized by the state?

[The North One]

Originally Posted by Pedestrian

Suburbia is subsidized because in the USA it’s where the majority of taxpaying voters want to live. People who vote get what they want. Nothing wrong with that.

Uh no, that's not how urban planning and development works. The system doesn't just magically change based on what people want. And even if it did suburban whims is not an excuse to bankrupt society.

[C.]

Originally Posted by Obadno

I mean, depending on how you want to define it what isnt in some way subsidized by the state?

It’s a zero sum game. If you believe everything receives a net subsidy, you’re using the wrong metric.

Even in the case of the Federal government where they can literally print money. We’re seeing the results now with soaring food, gas, and housing costs, which is impacting the poor the most.

[mhays]

Originally Posted by Nite

They are counting the tax revenue from the property owner vs the lifetime maintenance of the infrastructure servicing that property. only medium and higher densities are a net profit for any city.

That could mean a bunch of things. I doubt they get into the minutae, but rather guess that they use broad assumptions. And if it's just infrastructure maintenance then what about other costs, like policing or the school bus contract? What about replacement cost for infrastructure, which I really doubt they're experts in or even dig into.

Without the spreadsheet it's impossible to even guess about context or accuracy.

[llamaorama]

Isn't this a little bit zero sum? Downtowns and suburbs and towns and rural areas are all mutually dependent on each other in various ways. It would be inequitable for one area to be able to gobble up all the tax revenue

A more fair analysis would be more like-for-like and you'd have to look beyond borders, I think. Compare a mediocre South Korean or Spanish town of 100,000 with a place such as Lawton Oklahoma. The denser places probably do perform better, of course.

[The North One]

Originally Posted by mhays

That could mean a bunch of things. I doubt they get into the minutae, but rather guess that they use broad assumptions. And if it's just infrastructure maintenance then what about other costs, like policing or the school bus contract? What about replacement cost for infrastructure, which I really doubt they're experts in or even dig into.

Without the spreadsheet it's impossible to even guess about context or accuracy.

Did you watch the video at all? He mentions policing and education are included in the per-acre cost. He says they calculated the services cost for each parcel of land. Link to the consulting firm's site in the description.

[C.]

Originally Posted by The North One

Did you watch the video at all? He mentions policing and education are included in the per-acre cost. He says they calculated the services cost for each parcel of land. Link to the consulting firm's site in the description.

Exactly. Plus nothing in this video is groundbreaking. It has been well documented that low density sprawl usually does not generate enough revenue from property taxes to cover the services it consumes. Cities go through this exercise from time to time when a decision comes up to annex new land. There is a cost/benefit ratio of how much providing city services will cost based on the property taxes that will be collected. Again, nothing new. I'm surprised any of this is coming as a shock to a skyscraper forum? Did you think we rail against the suburbs just for fun around here? Many of them are truly unsustainable and are going to be facing big budget issues once all the Federal stimulus money from COVID runs out.

[SFBruin]

What is going to happen when the infrastructure needs to be replaced?

[C.]

Originally Posted by SFBruin

What is going to happen when the infrastructure needs to be replaced?

Higher property taxes and/or deferred maintenance and/or Flint, Michigan.