The Kyle Report

The Kyle Report

Thursday, August 20, 2015

Kyle’s growth strategy: Orderly But Dumb

There’s a section on the op-ed page of the Austin American-Statesman called "The Water Cooler." You can find it just about every day in the lower right corner of the page. Normally I don’t pay much attention but today a picture of the Kyle city limit sign immediately drew my attention to that lower right corner of the page.

I’m not sure exactly what The Water Cooler is all about, but looking at it I’m guessing it comes from comments readers place on the newspaper’s Facebook page in reaction to certain stories. This particular story apparently reported "An Austin-based homebuilder is moving forward with plans for a master-planned subdivision on the 673-acre Nance Ranch in the fast-growing area in Hays County. The project could have up to 2,200 homes once it is completed in phases over the next 10 to 15 years."

Here are all the comments the Statesman reprinted:

  • Shawn Marie: My great-grandfather used to live and work on the Nance Ranch, To hear my grandma talk about it, one would never imagine such a development there.
  • Luis Rivera: That’s a lot of homes. Traffic on RM 150 in that area will be horrible.
  • Christie Smith: And the water is coming from where?
  • Tammy Svjagintsev: I’m sick of master-planned.
  • Randall Stephens: Get ready for the high cost of expanding police, fire, EMT and school service.
  • G.L. Werchan: Will there be a day when the market isn’t the gatekeeper of land use? Or are we just going to pave over the land until we’re Tron?
  • Tom Brown: Hope they throw in a few dollars to improve expand the road system — or maybe even offer public transportation. FM 1626 us gonna get hit pretty good.

I’m a voracious reader, especially of non-fiction. If you ever see me out in public, I am usually carrying reading material with me. If you ever attend City Council meetings you will notice me more often than not buried in a book during those times when the council is in executive session. I never dine out alone — if it’s not another person or two or three joining me, it will be a book. I am also an avid reader of newspapers and scholarly studies exploring subjects I have a particular interest in.

One of those subjects is urban planning and it just so happened that a week or so ago I came across this study that theorized municipalities follow two methods of growth. The first is Orderly but Dumb. The second is Chaotic but Smart. I found it fascinating that Dallas, where I lived for almost 50 years before relocating here followed both methods, depending on the area of town in which the growth occurred. In short, Orderly But Dumb is the way most cities have grown since the end of World War II, carefully master planned without any consideration given to the ultimate ramifications and financial consequences of that growth. It is always car-centric. Chaotic but Smart development is more self-contained and usually created outside the influences of municipal government. It is more organic and walkable. It’s piecemeal and incremental.

I learned there’s an organization called "Strong Towns" (you can check it out here). The vision statement of Strong Towns reads as follows: "We seek an America where our cities, towns and neighborhoods are financially strong and resilient. There is no shortcut to that enduring prosperity. It must be built, block by block, day after day, by people who care about the places they live in." Strong Towns was started back in 2008 as a blog by Charles Marohn who describes himself as a "recovering engineer." And that study I referred to earlier quoted Marohn quite extensively. He said the Orderly But Dumb method, which is obviously the growth strategy embraced here in Kyle, began right after World War II at a time when that philosophy worked, it paid for itself and was extremely popular.

"I was there, too," Marohn was quoted as saying in the study authored by Dallas writer Jim Schutze. "I worked for developers for a number of years and for cities, doing these kinds of projects. The thing is that the developers are right. They do pay for the infrastructure. For the city, the cost to build that new development is very, very low. You might have some staff time or other costs, but the bulk of the cost is being paid for as part of that development transaction.

"Here's the catch. As part of doing that project, the city takes on the long-term liability to maintain it. The city says, 'OK, you build it, and then we'll take over, and we'll fix it. We'll maintain it indefinitely. When the road gets bad, we'll replace it.' Well that works really well. The city will be cash-flow positive. The city will have a lot of money through the first life cycle, because everything was paid for by someone else and the city wasn't having costs. You've got basically 25 years of cash-flow positive. The problem is when you get to the end of that first life cycle, then you have to go out and fix stuff. What we (Strong Cities) find is that the money isn't there. There isn't enough cash to actually fix stuff.

"So cities respond in two ways. Cities respond by trying to create more growth. If you can create more growth, you get a lot of cash, and you can use that cash to make good on all the promises you made a generation ago. The second thing you do is you take on debt, and cities have become really, really good at creative ways to take on debt to do basic maintenance that should be paid for from cash flow.

"So it creates a Ponzi scheme, a kind of situation where a city enjoys essentially one generation of growth, and then you've got another generation of kind of hanging on. We call that the stagnation generation, where you try to maintain the same level of service, and you may cut back a little bit, but you also take on a bunch of debt. And then you reach the generation of steep decline."

What this means is that Kyle’s building policies and its culture of incentivizing growth will wind up bankrupting the city in the long run. Why do city leaders follow this path? Because the bankruptcy won’t happen in their lifetimes. It may not even happen in their children’s lifetimes. And city leaders never really look any further than that, if that far.

According to Marohn, the automobile should be used as a barometer in growth decisions. Where growth is auto-dependent, as it is in Kyle, the costs of maintaining the infrastructure gradually exceed the community’s ability to pay for maintaining it. But growth not totally dependent on cars can pay its own way because the maintenance costs are so much lower.

"The more people can walk, the more financially productive the place tends to be," Marohn said. "When you have places where people don't walk or can't walk, those places tend to be the least financially productive. And by walk, I don't mean that you can physically get out and walk. I mean the place is designed so people can be comfortable walking.

"The city likes orderly," he continued. "One of the primary functions of orderly is that the city is able to figure out, 'Here is how many new subdivisions or apartment buildings we need, and here is where they are going to be. Here is how much commercial we need. Here is where it's going to be.' And they are able to finely calibrate that from the top down. But the reality is that cities have never been able to do the math. What you wind up with is being able to do things that look good in the short term but have no ability to withstand the test of time.

"We can go back to 'urban renewal.' We can go back to the projects to get rid of blight. We can go back to all kinds of things and look at the projects we built in the '60s and then just see that despite our best intentions, despite the fact that we thought we knew what we were doing, time has revealed that we are not as smart as we think we are."

The Chaotic But Smart approach does limit size but that also means limiting the size of mistakes.

"The Chaotic but Smart approach is where you've got people trying things on a small scale," Marohn said. "There will be failure. Things that will be tried won't work. But they won't be large-scale failures. They'll be small-scale failures that over time can be overcome. That's a huge difference in terms of the ability to be resilient and withstand fluctuations in the market over time."

I don’t know if the Kyle Chamber of Commerce has the ability or even the interest in pursuing this, but I would really like to see if it could attract a representative of Strong Towns to come down to speak at an upcoming luncheon. Perhaps it could be co-sponsored by a presentation the organization could make to city planners at an public meeting.

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