Here are some photos of the HopMonk Tavern in Novato, California in the Wine County just north of San Francisco. The food here is great. The atmosphere is terrific. When you’re inside the building or out on the enclosed patio it’s exactly what you’d want or expect from this part of the world. But let’s pull out a bit for a little context.
Things look a little different now, don’t they? This looks more like New Jersey or one of the mediocre parts of Los Angeles than a premier rural tourist destination.
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The Vintage Oaks shopping center is a fine place. It’s conveniently located next to an interstate highway, it has ample free parking, and the quality of the retail establishments is top notch. But there’s a gap between the superficial iconography of the place and the reality of what Vintage Oaks really is.
The Old Navy store looks like a Victorian farmhouse, the Designer Shoe Warehouse is in a faux barn, and the ATM machine is tucked into an ersatz grain silo. There’s clearly a desire for the place to feel like the Wine Country.
But the reality is that Vintage Oaks is a giant slab of asphalt and concrete that serves as a sales tax generating machine. The town of Novato, as wealthy as many of its Marin County residents may be, is just another cash strapped municipality desperate for tax revenue to fund basic services.
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Property taxes from homes don’t come anywhere close to covering the cost of running the town. Water and sewer lines, pumping stations, pavement, police and fire protection, public schools, senior centers… Like most communities in Marin County Novato is fiercely anti-growth and has no interest in new development. But it can’t fund its own local services.
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Half of Novato’s budget already goes to fund its police department – and that percentage keeps rising and squeezing out other services. Novato isn’t unique in this regard. This is true of most local governments all across the country. So Vintage Oaks was approved and installed as a cash point to help subsidize the town.
For all the sturm and drang that proposed new development incites in Marin County, retail centers like this tend to get approved. The sales tax argument is pitted against the question, “Do you want municipal services radically cut, or do you want a collection of new user fees for city services?” Even rich tree huggers quietly opt for the shopping mall under the circumstances.
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You’ll also notice that the highway segregates Vintage Oaks and its associated traffic and parking from the town itself which helps defuse some of the NIMBY opposition. The town sacrifices a little piece of its periphery, but gets the cash it needs. Meanwhile, the residential subdivisions remain unscathed.
There are trade offs. Sales tax is a volatile source of income that rises and falls in unpredictable ways. Sales tend to be lowest during a recession at exactly the time when the town needs money the most. The historic downtown of Novato has seen its mom and pop businesses decimated. Who can compete with Target, Costco, and the national chains? People are forced to drive everywhere whether they want to or not. And sooner or later the retail center will age and decline. But there you have it – a rural paradise in the bulk warehouse aisle.
Great blog Johnny, hate it when bread is stolen off my table to feed someone at another table. Thanks for the unraveling.
I’m on a road trip to Michigan and went through Colorado, seems everyone wants to live there. Well just for instance my friend in Denver had to make an appointment to get an estiment at a body shop. A time for an estiment was given 45 days latter. He got the estiment and then they weren’t able to fix his car for two more months. A bit of a strain on services I would say. I’m writing this in Peoria, Illinois (another catastrophe) on my way to Dayton, Ohio (another catastrophe) the hole county is booming or busting, simple as that. I live on my boat in Alameda and I have been traveling across this beautiful country for 60 years, it breaks my heart. I started out in the 50’s in Dayton and Detroit during their heyday,
I’d like to see some data. I mean operating vs capital budget vs revenue sources for a particular town and how it relates to your in the trenches micro-observation. Otherwise, it’s just opinions. Opinions I may agree with and enjoy reading but all the same..
I will refer you to two organizations that do the math for municipal revenue vs. expenditures.
First, Urban3 http://www.urban-three.com/ Here’s a video https://www.youtube.com/watch?v=wQRD51k41IM
Second, Strong Towns http://www.strongtowns.org/ Here’s a video where Mr. Marohn walks ou through the numbers. https://www.youtube.com/watch?v=6XRjatW_N9M
No doubt density (tax revenue per acre) is a factor. But probably more important are the pensions/salaries (majority of expenditures) vs the wealth (property/sales taxes & fees) of your citizens and businesses. How much of a financial factor is sprawl? Hard to say unless it’s presented in the context of these other inputs.
Well… if I tried to include all the context in every blog post they’d each be a novel. Most of the feedback I get says I need to communicate a simple concept in less than a couple of paragraphs. Photos work pretty well though. People tend to read these things on their phone while doing something else so they want Shiny! Shiny! Fast! Funny!. I do my best.
Back of the napkin: My (older, inner ring Bay Area suburb of 65k people) city has $126 million in revenue, but only $16 million of that is property tax. Say we magically grew our population by 15% via infill solely. Another $2.4 million give or take to the rolls but with minimal future services obligation. Awesome. We should insitutionalize that sort of planning long term.
However, my city spends $76 million a year on salaries & benefits including pensions. Total operating budget is $135 million. There’s also a separate capital budget, funded by a mix of state money, muni bonds, business fees and a tiny kick from the general fund. That’s $40 million. Of that $40 million, the vast majority goes to sewer improvement (almost 58%!) and streets ($17%).
I’m no budget wonk and I just gleaned this from a cursory look at my city’s online budget. And I hate sprawl for my own reasons. But obviously, a bit more complicated than the “suburbs are doomed because they’re wasteful” meme popular in urbanist circles.
I like that you looked at your own town’s numbers.
By the way, I don’t think all suburbs are doomed. I think most suburbs have a structural budget deficit. At some point push will have to come to shove. Some people like to live in the country. Some people like to live in the suburbs. Some people like to live in town. In a perfect world people would pay the full real cost of their chosen location, be that high or low. But that’s politically unrealistic. What I’m suggesting is that towns understand where their money comes from and where it goes to and make rational decisions about land use policy.
I once heard an architect talk about a library he designed. He mentioned that a hundred years ago 90% of the cost of a library was the building. The other 10% was staff salaries. People just didn’t cost that much back then. Today the percentages are reversed. People and their health insurance, pensions, etc. are far more expensive than the bricks and sticks. This encouraged him to design a building that minimized the need for labor.
When I was a kid each garbage truck had three men on it. One drove and two hung off the back lifting the trash cans. Today there’s a driver and a robot arm in the back. I’m not sure there’s a way to mechanized teachers and cops. And much of the current cost is from “legacy” medical and pension plans from civil employees who have already retired. Shall we give all those folks a big hair cut?
I think the idea of infill is not that it is a panacea to save the town’s bacon. I think the point is that it is the cheapest way to provide growth. Road and sewage costs are significantly lower with infill, for example.
As you say, they should build midrise apartments with a few small ground level stores on the parking lot. That would anchor the retail, increase property taxes and be cheap to maintain.
Then they should rezone the town to allow commerce in more areas. A great place to start would be the parking lot of the high school, a wasteland edged by tragically unattractive greenery and token sidewalks skewered by power poles.
https://www.google.de/maps/@38.0906735,-122.5732175,3a,75y,197.52h,80.83t/data=!3m6!1e1!3m4!1sE5vR1JRwDNFlrPx6v1AKxg!2e0!7i13312!8i6656!6m1!1e1
The waste of land is mind boggling.
Close the street next to the school except to residents. Remove the sidewalks. Build small box retail on these edges to cater to the students. Do not provide parking. Encourage students to ride their bikes to school instead.
This is all the street you need:
The rest is just wasteland. Build on it.
Put in cheap bike paths by narrowing the car lanes all across the city. It just takes a bucket of paint. Bike lanes are cheaper to maintain.
I agree that this meme needs to be much more clearly supported with data. I love what chuck marohn has done at the level of the block or acre, but I wish the numbers were way, way more transparent at the level of the municipality. It’s easy to imagine that every exurban place that looks to my eye like a disaster is also a fiscal disaster, a doomed Ponzi scheme, but until I see clearer numbers I have a lot of Brian’s skepticism, since it’s hard for me to believe that these suburban or exurban places are SO different from the place I live or the place I work, both of which spend half their budgets on schools and most of the rest on non-infrastructure stuff. I was hoping Chuck would give us more detailed data on that place he looked at closely (in Kentucky? In Tennessee), but it hasn’t happened yet…
Eric – I can direct you to work that Joe Minicozzi has done at Urban3 http://www.urban-three.com/ where he does a detailed statistical analysis of which properties in a particular town generate more tax revenue than they consume in city services, and which properties consume more than they pay for. He’s done this study in a variety of places around the country and the pattern is the same all over.
Then again, I don’t think the average person needs statistics to immediately know that one town is desirable and another is visibly failing. These things are often self evident and palpable.
Personally, I think that some suburbs will continue to thrive in their current form so long as some portion of their municipal territory is productive enough to offset the losses of the cul-de-sacs and strip malls. For example, a cluster of mid-rise office parks and regional premium shopping malls that spin off jobs and tax revenue can easily support a modest but prosperous suburb. But that implies that neighboring suburbs have been robbed of those jobs and taxes and will struggle that much more in proportion. You’re either “in” the good suburb with the good tax base and the good school district, or you’re “out” in a place that’s declining.
It’s like how some industrial cities made the transition from factory town to post-industrial economy. But there were a lot more Youngstowns, Garys, Clevelands, and Detroits than there were Chicagos, Bostons, or San Franciscos. It’s kind of a winner takes all thing.
Perhaps we can hire minimum wage contractors. Heaven forbid the employees of the town earn a decent salary.
I can’t tell if you’re being snarky as in, “This guy wants civil servants to starve to death on minimum wage” or if you’re making some other commentary that I’m not picking up on. My point isn’t that municipal workers are earning too much. Rather, the land use pattern is causing too much public money to be diverted away from humans and towards pipes, wires, and pavement. If people want to live on a half acre in the hills in the country they might consider gravel roads and private wells/septic systems in order to free up city money for high quality teachers, cops, etc. If you want paved roads move to town and live in a walkable neighborhood where the buildings are closer together. That’s my point. What’s yours?
Love the blog. Depresses the hell out of me but I love it.