Guest Column

Can Peterborough escape the Growth Ponzi Scheme?

By Ben Wolfe/Guest ColumnistThursday, November 23, 2017 12:24:53 EDT AM

The costs of sprawl. Our current pattern of development at the edge of cities can not cover its own maintenance and operating costs, according to a new generation of planners who have begun referring to it as a “Ponzi scheme” and urging we build differently. This data is from Halifax, in 2013. (Source: Smart Prosperity Institute)

A few weeks ago, a top planning website, Planetizen, published a list of the 100 Most Influential Urbanists of All Time. The Top 10 included Jane Jacobs, the architect Frank Lloyd Wright, and the creator of Central Park, Frederick Law Olmstead. Right there with them was someone you may not have heard of: Charles (Chuck) Marohn, founder and president of Strong Towns, a little news and commentary website on planning issuesthat is less than 10 years old.

Marohn is making waves. He's a professional engineer who has worked for many cities. He's asking awkward, overdue questions that a lot of City Halls find they can't answer. He spoke in Peterborough about three years ago, giving a talk called the Curbside Chat that made an impression at the time and is available online. It's worth your time. This month's Reimagine Peterborough column is about one of Marohn's core ideas.

He calls it the "growth Ponzi scheme." He says we're very likely part of it. And he urges us to find out.

The pattern goes like this. Developers use their borrowing power to build a subdivision or a commercial project. This covers many of the costs of the initial infrastructure. Homebuyers and businesses take out mortgages and move in. Local government may not need to spend a lot of money up front to make this happen. It gets new revenue from development charges and an expanded tax base.

It seems like a no-brainer. It is always treated as a win, a good news story, evidence of prosperity.

But the city also takes on responsibility for maintaining all of the infrastructure, and providing necessary services. Roads, sewers, water systems, sidewalks and stormwater management all have a lifespan. Fire and police services, parks, arenas, transit, and moreall have ongoing costs. Those costs are much higher in the suburbs than they are in the city core.

Marohn's detailed research shows that virtually every development we now build has costs over time that are higher than the amount of tax revenue that can ever be raised from it. It is, he says, "a living arrangement that does not financially support itself." And as crazy and unlikely as it sounds, in most cities no-one has been asking this question, and no-one has been doing the math. The whole process rests on beliefs that goback to the postwar boom: that the benefits exceed the costs.

"Like any Ponzi scheme," he says, "there is only one way this ends."

We are at the stage now where the bill is coming due. This is partly why our roads are in bad shape and we hear so much about an "infrastructure deficit." The answer we're givenis usually more growth. At times we're told we should spend vast amounts of public money to attract this growth.

Keep in mind that Marohn used to design exactly the sorts of projects he is talking about. He is an economic conservative. And the people who are spreading his ideas are afresh generation of planners, who took the time to do the math.

Reimagine first heard about the "growth Ponzi scheme" from the planning department inLondon, Ont. It's one of the reasons their new plan -- which recently won a slew of awards -- is about building "up and in," rather than sprawling outward into greenfields as Peterborough and most cities have been doing. A huge focus of the plan is creating population density around a transit corridor that makes the city more financially sustainable.

There's an old joke about a company that loses money on every sale. "Don't worry," the owners reassure the staff. "We'll make it up in volume." It's worth asking our councillorsand planners whether we are among the victims of that joke.

As we complete a new Official Plan over the coming months, are they -- are we as a community -- ready to do the math, take a deep breath, and stop looking backward at a fundamentally broken planning model based on unquestioned postwar habits and assumptions and face the actual realities of the 21st century?

Ben Wolfe is a local and international community-builder and communicator and one ofthe founders of Reimagine Peterborough.

This is the tenth in a series of columns from Reimagine Peterborough, a citizen-led movement that sees better urban planning and public engagement as essential to our social, cultural, democratic, and quality of life needs. For updates, follow Reimagine Peterborough on Facebook, Twitter, at reimagineptbo.ca, and join our mailing list.