Infrastructure Costs and Planning

by trenzpruca


Suburbia (Photo credit: bluekdesign)

A new report from “Strong Towns” a development think tank states that the first generation of Suburbia was built on and maintained by savings and investment, but the second was built and maintained by borrowing tons of money. We are now in the third generation we are out of savings and investment and easy money, now what do we do?

They also point out that in every case they have studied the useful life of an infrastructure investment paid for by borrowing from the private market was less the time it took to pay back the loans. What this means is that almost every community that invested in infrastructure by borrowing will likely face bankruptcy should growth slow or stop.

Finally the report found that in almost every case where a developer paid for or otherwise donated infrastructure improvements in its development in return for the community to assume responsibility for operation and maintenance of the improvements eventually required a tax increase to pay for the maintenance.

It used to be that in embarking on an infrastructure project the costs for operation and maintenance were budgeted for. One of the centerpieces of the Reagan Revolution was the abolishing of this practice so that his administration could appear to have cut spending in the budget. Not only did this practice push-off the burden on to to future generations (like ours today) but by masking the true long-term costs it encouraged the orgy or borrowing that marks current Conservative governmental policy world-wide. This was neither traditional liberal nor conservative orthodoxy, but a cynical ploy to obtain and hold power by pandering to the economic élite.

If in comes either to pandering to the rich or pandering to the average person, I know which side of the street I would prefer my elected politician to set up his crib.