Must-read: Leigh Gallagher: “The Suburbs Will Die: One Man’s Fight to Fix the American Dream”

Leigh Gallagher (2014): The Suburbs Will Die: One Man’s Fight to Fix the American Dream: “[Charles] Marohn primarily takes issue with the financial structure of the suburbs…

…A town lays the pipes, plumbing, and infrastructure for housing development…. Developers usually fund most of the cost of the infrastructure because they make their money back from the sale of the homes. The short-term cost to the city or town, therefore, is very low: it gets a cash infusion… and the city gets to keep all the revenue from property taxes…. But the tax revenue at low suburban densities isn’t nearly enough to pay the bills; in Marohn’s estimation, property taxes at suburban densities bring in anywhere from 4 cents to 65 cents for every dollar of liability…. The only way to survive is to keep growing…. Marohn points out that while this has been an issue as long as there have been suburbs, the problem has become more acute with each additional ‘life cycle’ of suburban infrastructure (the point at which the systems need to be replaced—funded by debt, more growth, or both). Most U.S. suburbs are now on their third life cycle…

January 1, 2016


Brad DeLong
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