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Old 01-27-2011, 04:06 PM
 
1,164 posts, read 1,792,601 times
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I've heard this on this board over and over again. Yet I don't know how it happens. Townships pay for their own sewage and water systems. They maintain their own roads. What is being subsidized? In states without townships, developers build the roads, they create the municipal utility districts, they build the water and sewage system. Where are these subsidies?
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Old 01-27-2011, 04:29 PM
 
229 posts, read 248,443 times
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Quote:
Originally Posted by jimmyev View Post
I've heard this on this board over and over again. Yet I don't know how it happens. Townships pay for their own sewage and water systems. They maintain their own roads. What is being subsidized? In states without townships, developers build the roads, they create the municipal utility districts, they build the water and sewage system. Where are these subsidies?
certain roads are being subsidized by a higher government(state,federal.. etc).
gas - $3 looks expensive but without oil subsidies, gas would skyrocket to $4-5 dollars.

internet/electricty/cable -- it's not worth for the companies to build a mile long line just to serve 30 households. it makes much more financial sense to do this in the city where there is > 1000 people per square mile.
Of course the government is not going to let ppl live without such services so they provide incentives ($$$) to those companies so they could go ahead and build that wasteful infastructure which would never otherwise happen.

post office - not a big thing but I'm certain it's not worth for them to dispatch hundreds of vehicles to drive around the suburban maze where the density is very low... look it up - post office has never many any profit. they operate on a huge deficit..
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Old 01-28-2011, 03:34 PM
 
1,164 posts, read 1,792,601 times
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Originally Posted by im_a_lawyer View Post
certain roads are being subsidized by a higher government(state,federal.. etc).
gas - $3 looks expensive but without oil subsidies, gas would skyrocket to $4-5 dollars.

internet/electricty/cable -- it's not worth for the companies to build a mile long line just to serve 30 households. it makes much more financial sense to do this in the city where there is > 1000 people per square mile.
Of course the government is not going to let ppl live without such services so they provide incentives ($$$) to those companies so they could go ahead and build that wasteful infastructure which would never otherwise happen.

post office - not a big thing but I'm certain it's not worth for them to dispatch hundreds of vehicles to drive around the suburban maze where the density is very low... look it up - post office has never many any profit. they operate on a huge deficit..
In other words - maybe there is some vague subsidy somewhere, but we can't quite put our finger on it?
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Old 01-28-2011, 07:43 PM
 
229 posts, read 248,443 times
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Originally Posted by jimmyev View Post
In other words - maybe there is some vague subsidy somewhere, but we can't quite put our finger on it?
huh? vague subsidy? i just gave u a few. suburbs are definitely not sustainable without some help from the government
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Old 01-28-2011, 09:44 PM
 
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There isn't a line-item in the federal budget that says "Direct Subsidy to Prop Up Suburbs," it is a collection of funds from a collection of sources. The biggest subsidies are loans and highways. Highways were federally-funded expenses that made most auto suburbs possible. Prior to the highways, suburban developers had to provide a means of transportation from their suburb to the downtown neighborhood. Once the government got into the roads and highways business, the private industries that provided that transportation could no longer compete.

Government-backed loans--FHA and VA being the biggest and best-known--changed the rules for mortgages. Instead of paying 50% down and borrowing 50%, these government programs let people pay 3-5% down and borrow 95-97%. But almost none of these loans could be used in existing city neighborhoods--they could only be used in new-growth areas, which were all auto suburbs. Urban neighborhoods and non-white neighborhoods were redlined: they were considered too high a credit risk and could not get these government-mandated and subsidized loans. In order to avoid becoming credit risks, suburban neighborhoods often prohibited non-whites until those laws were declared illegal in the 1960s--although redlining was still on the books until the 1970s.

Accelerated depreciation promoted commercial developers to build cheaper, less permanent commercial buildings in suburbs, using a tax structure that discouraged long-term investment and permanent buildings and rewarded building cheap strip malls, maintaining them until depreciated enough, then building a new set farther out.

Utilities were subsidized by government programs: federal clean-water programs hooked up suburban neighborhoods to city water, and rural electrification programs connected them to the electric grid, with large federal subsidy.

Gas subsidies, in the form of tax write-offs, oil depreciation allowances, Department of Energy expenditures in oil exploration research and other technical assistance, made gas cheaper and made living farther out in the suburbs more economical as travel costs were kept artificially low. Government worked hand in hand with the oil and auto industries to this end, connected together by the highway lobby, an alliance that destroyed the privately-owned railroads and streetcar companies.

Another subsidy is harder to quantify: Suburbs often make great efforts to avoid taking care of social problems. By simply lacking low-income housing by not building any, and lacking things like homeless shelters, mental health or alcoholism treatment centers, or other undesirable land uses, those in the suburbs who need such services are pretty much required to leave that suburb and head to the nearest major city. Cities generally can't get out of having to provide these services, so in many ways they end up having to shoulder the responsibility for the region's problems, but are not compensated by the adjacent communities who benefit.
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Old 01-29-2011, 01:10 AM
 
Location: Sacramento, Placerville
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The tax write-offs on depreciation are applicable to any business that invests in equipment. If you open a bakery and buy new ovens you can write of the depreciation of those ovens over time. Now, are we going to make an argument that bakeries are subsidised? If so, lets make an argument that the $500 refund per child people receive for sitting on their glutes all day and having children. They don't have to work a day out of the year. They only have to file a tax return. That is a subsidy.

I don't know what the costs for cable and other "line" utilities are in urban vs rural areas. Certainly, inner-city areas are more labour intensive to maintain due to weather exposure. Suburban areas have these utilities buried which minimized maintenance issues from weather. However, it takes more copper, fibre, or hardline to provide service to suburban areas. Copper and hardline is expensive, but it is going away in favor of fibre, which is cheap.

Several companies across the country took on projects to connect metro areas with consumer-fibre data access. Most gave up on high density areas due to the expense of getting in, over, and climbing things in the high-density areas. We had one in Sacramento which planned to do string fibre here. I think it was called Wild West internet. They gave up after reaching the older suburban neighbourhoods and finally sold to a company called Roseville Telephone which change their name to Surewest after acquiring the fibre. Surewest promptly canceled plans to install fibre in high density areas of Sacramento and a few other outlying areas with high density. They readily install fibre in suburban tracts because it is much cheaper to pull a spool of fibre through a giant buried conduit than it is to hang from utility poles in other areas.

Estimating the cost of other utilities is difficult. Gas lines are cheap. Digging trenches isn't expensive, but it costs enough that utility companies have decided taking a chance on gas lines leaking is much cheaper than the cost of a blowout, suburban or inner-city. You also have to take distance into consideration. Electricity doesn't come from Downtown. It comes from wherever it is generated. A significant amount of electricity generation for Sacramento comes from the Folsom Hydroelectric plant 26 miles away. It is known as the first long-distance transmission line in the country and was a big deal at the time. It certainly paid off to bring it into Downtown Sacramento. Today the transmission lines are tapped into along the way to serve communities and suburbs closer to the origin. The suburbs were pre-wired for electricty. The cities had wiring installed. In some cases by way of grants similar to the rural electrification grants. Also note transmission lines have resistance, which means electricity is lost along the way. Loss is a cost to the utility companies. So, what is the cost to transport electricity from Sierra Nevada hydroelectric plants to Livermore, a suburb of San Francisco, vs San Francisco itself, which is probably an extra 45 miles of transmission lines. Anything which distorts the magnetic field around an electrical transmission line adds resistance. There is more resistance in areas where buildings rise up alongside power poles.

How do you measure the cost differential given that it is cheaper for PG&E to check a row of meters for an apartment building in San Francisco vs it is just plain cheaper to get electricity to Livermore, lay power lines which are buried and need next to no maintenance. Also, technology makes things cheaper everywhere. Power meter reading is going automated, so PG&E will no longer have to pay people to read meters.

Now lets talk about real subsidies. The ones where cash is paid out to something, unlike the spinner version of the definition of subsidies, which, in this case, is taxes some people think are a bit too low (myself included).

Inner city redevelopment projects. Billions for legal proceedings to acquire land through eminent domain, transfer titles, sometimes selling downtown properties to developers for $1 (only done in some states), spending millions on youth center and community center projects, the type of inner-city people who are subsidised for no other reason than they are alive and sucking air, public transportation, waterfront projects which cost the taxpayers millions to pour a .25 mile stretch of concrete and plant trees along it. The expense of policing high-crime areas in the inner city.

Most of the taxes are being paid in the suburbs. That includes both individuals paying taxes and mega-malls. Most of the people who don't pay taxes live in or around the city centers in most metro areas.

More asphalt is laid down in suburban areas, however, the bulk of the taxpayers are out there, and in many parts of the country people in suburban developments are paying additional fees above and beyond their property taxes which go directly to something. Police, fire, schools, etc. It is called Mellos-Roos in California and can be over $400 a month.
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Old 01-29-2011, 02:41 AM
 
4,399 posts, read 9,055,244 times
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Originally Posted by jimmyev View Post
In other words - maybe there is some vague subsidy somewhere, but we can't quite put our finger on it?
Seems like he knows where to put his finger, you just don't know where to put yours.
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Old 01-29-2011, 10:15 AM
 
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kc6zlv: You are incorrect in assuming that power wasn't generated downtown. The big concrete building on the Sacramento River on Jibboom was a steam-powered, oil-fired electric generator, used to supplement the Folsom powerhouse once we outstripped its generating capacity.

Plumbing and water pipes aren't above ground in cities, and they sure as heck aren't converting to fiberoptic. Until recently, a water connection downtown and a water connection on the farthest end of town--even if the latter required 1000 feet of pipe and the former could be connected to a main in the alley. This was another form of subsidy--and at least here, that particular one was shut off.

Most redevelopment projects weren't done to benefit the residents of central cities, they benefited the business communities who wanted downtowns to be strictly office/commercial spaces. This was intended to benefit the suburban commuter: the downtown office (that replaced the downtown neighborhood) built by a redevelopment project was filled with suburban office workers who took the government-subsidized freeway home at 5 PM. The only people who lived there after 5 PM were the people whom the business owners and the office workers didn't feel comfortable living near.

Depreciation is not the same as accelerated depreciation. Plenty of business expenses depreciate, but in the 1950s and 1960 there were larger tax advantages in the first few years of a property investment (like building commercial businesses)--even though, in theory, buildings are supposed to be a long-term durable good. The idea was to jump-start the building of these new suburban cities, but because most of the write-off was only for the first few years, there was less long-term incentive to maintain the building, and buying used buildings didn't carry the same advantage. This promoted the creation of essentially disposable neighborhoods.
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Old 01-29-2011, 11:23 AM
Status: "Summer!" (set 17 days ago)
 
Location: Foot of the Rockies
86,992 posts, read 102,568,112 times
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Originally Posted by wburg View Post
Government-backed loans--FHA and VA being the biggest and best-known--changed the rules for mortgages. Instead of paying 50% down and borrowing 50%, these government programs let people pay 3-5% down and borrow 95-97%.
Yes, isn't that just awful! Allowing the average Jane and Joe to be able to buy a house! Horrors!

I for one don't want to go back to the day when only the wealthy, or those who inherited houses could afford to own their own homes.
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Old 01-29-2011, 12:08 PM
 
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that is available to all buyers and i mnay urban areas they even gibe closig and down payemnt assistance. I thnik it is a mistake to ensourage peopel eho can;t afford that as they are more likely to fail but that isn't what ther discusion is about. With urban renewal and other tranfer payments in federal grants I think the sub burbs acually more than pat their way. But with coming chnages that is likely to end pretty soon. I thnicities are i mre trouble than i the recent past because the grant maounts and matchig funding wouldn't be as avialble.
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