How are suburbs subsidized? (problems, build, money, California)

[wburg]

Nobody is denying that central cities don't receive grants and funds. But the main reason those funds are needed is because the subsidies that went to the suburbs give them a comparative advantage--now, both downtown and the suburbs are subsidized! Some level of suburban sprawl brings an overall economic gain, but eventually they reach a point of diminishing returns--which is usually identified by the point where the region's outer suburbs start collapsing economically because the municipality can't pay for the infrastructure anymore.

If you then ask, "If both are subsidized, who is paying for it?" the answer is to take a look at the level of debt carried by local, state and federal governments.

[5Lakes]

Originally Posted by KC6ZLV

Individual cites are linked by State and Federal Highways. Highways were designed to be built with public money. The benefit in the end is an economic gain. Even with all the expense of building and maintaining highways we still come out ahead economically. Furthermore, the economic growth generates additional tax revenue. This holds true even with those small connector segment of freeways in metropolitan areas which increase the efficiency of commerce. Our airports and seaports are subsidized for the same reasons.

The central city only needs a few highways in and out of the city to be linked for commerce. However, if you look any any metro area you will see a web of highways around it. Those highways exist because of suburban expansion, some of which is perhaps unnecessary under proper planning. Those highways are usually paid for and maintained by the state or county governments regardless of who uses them.

For example I'm currently working on a project which is widening an arterial thoroughfare that has become over capacity due to suburban sprawl type expansion. You know who is fitting the bill to serve all these suburbanites who need traffic relief? The state, that's who. They are even paying for all of the utility relocations required because of this project. And it's not for the good of economic development either. Basically this population growth is occuring at the expense of declining communities, essentially robbing Peter to pay Paul while creating additional infrastructure that the tax payers must maintain.

And if you want to get into economic dependence you have to consider that all these suburban communities would not exist in the first places if it was not for the core city.

Originally Posted by KC6ZLV

Not all states have regional public utilities. The closest thing in California is here in Sacramento (SMUD). It only serves the urbanized area of Sacramento County. Quite a few places have private water districts. Some suburban areas have their own public water districts. There are too many variables when it comes to utilities to make a generalization, and they aren't exceptions. You will find some things to be more common or less common in different parts of the country, and even within the same metro area. Several cites in Placer County here makes developers pay for just about everything and roll it into a loan or bond which will be paid X amount of years by the homeowners out there. The city of Sacramento makes developers install utilities and some portion of the cost for neighbourhood streets. I don't know what that portion is.

Yes, this does indeed vary but typically regional utility companies do exist. I know they exist in California because I used to live and work there. Although I'm not familiar with the Sacramento area. Developers typically do pay for upgrades to the immediate development, but like I said before there are ofter underlying and maintenance costs that are not accounted for. These cost usually surface over time.

Originally Posted by KC6ZLV

If you are trying to suggest that somehow legacy infrastructure downtown is paid for by the cities but must be subsidized in the suburbs, I would really like to see some numbers. Don't bother with throwing in the costs for highways. The city centers are served by them as well. Quite often moreso than suburbs as city centers are economically dependent on them for commerce.

I did not say that, but they should pay their share. And their share is often more costly on a per capita basis.

Here is another example in the form of water systems: Typically the majority of a big metro area is served by a handfull of water/wastewater treatment facilities originally built to serve the central city. When new suburban expansion occurs it usually requires new pumping stations, increased power costs for pumping and treatment, and upgrades to the core infrastructure. You see this expansion puts a burden on the core system that did not exists before, even if it's not serving any more people than it did in the first place. Simple put, it's more efficient to build and maintain infrastructure if there are more people per square mile to pay for it. Sprawl is just the opposite of that.

As for highways, you can see my comments above.

Originally Posted by KC6ZLV

The City of Sacramento has received grants to replace aging water pipes. Federal redevelopment grants have been used to resurface Downtown roads. There have been grants for historical preservation regardless of private, state, city, or other form of ownership. They city has received matching grants for quite a few projects (grants which the state or feds contribute a matching amount). I frequently see mention of grants for a variety of projects when reading the handful of newspapers I read.

Yes, but grants go everywhere. I never said that they didn't.

Originally Posted by KC6ZLV

And again, I'm not so concerned about the grants. I'm very pro-urban preservation. It is just annoying to constantly see people pounding on something because they don't like it or they think other people should or shouldn't, downtown and the attitude that public funding of anything is the suburbs is a problem, but it is OK to blow suburban taxpayer's money Downtown is nothing other than pure arrogance.

This is not about anti-suburb for me. It's about efficiency and balance, and the balance is off.

[sunsprit]

[quote=5Lakes;17706397]As a civil engineer who deals with different types of infrastructure projects I can tell you that there are definately ways that suburbs are subsidized. No, there is not some sort of special "sprawl fund" or anything like that. However, it's often the case that suburbs will get the benefit of state funds so they can function, were as the core city is stuck with what it has.

You may be a civil engineer, but you don't know the laws/statutes/funding mechanisms of a lot of areas of the county. I'd suggest that you identify the areas where you know these situations have happened as opposed to making blanket statements which are not applicable to other areas.

For example someone brought up the example of the new suburban development that was paid for by the developer. That's all good, however it does not tell the entire story. When developments like that are built it often results in other public costs, such as widening arterial roads, water pumping costs, costs to upgrade treatment facilities, and future roadway expansions and maintenance.

At least in our region, arterial roads haven't been widened at all at the sole cost of the municipality. The P&Z folk are astute enough to weigh the increased traffic load, perhaps additional intersections off major arterials ... and require that all be funded by the developer of the subdivision. For example, we have a new major industrial park just off the interstate, and it required a new overpass and cloverleaf to be built. It took a year for the construction, but it's now in. Similarly, Wal-Mart built a new distribution center off a small freeway interchange and the developer was required to upgrade all of the interchange as well as the surface road to the facility and attached industrial park. No state or federal funds were used in these projects ... and the developers won't get a ROI until they are able to attract other tenants and a residential community to be built to take advantage of the infrastructure.

Much of the funding to support those indirect costs often comes from a state or federal budget, and is not picked up by that particular suburban community. Furthermore, building all this infrastructure in such a manner is often inefficient to the tax payers because you have to support more roads/utilities with less people per mile.

Yes, this is very true. Our public transit budgets are a drop in the bucket compared to roadway budgets. The true costs of roads would require a huge tax increase on gas and/or auto registration. I have to laugh when anti-rail people tell me they are against it because it operates at a loss. I'm typically more conservative on fiscal matters, but I'm not blind.

Again, our local developers are required to fund all of the impacts of their developlment. P&Z, Public Utilities ... if they need to expand a water plant, it's funded by tap fees ... but initially paid for by the developer who then gets the money back as the units are sold. If they need electicity and gas lines, they're paid for up front by the developer, who recaptures the money later in the access fees. Same with property for schools, parks/open space, or municipal services ... must be acquired by the developer and deeded over to the city after it's brought up to their standards. Have drainage issues associated with all the new pavement? No problem, the system to capture and divert the water to a retention area must be funded and built by the developer.

I'll bet as an engineer that you can itemize numerous more impacts of a new subdivision upon an annexing city. The locals have got engineers on staff, too, who are experts in these affairs and make sure that all of them are addressed by the developers before any permits are issued, or any certificates of occupancy. I don't care if it's industrial, commercial, or residential ... the existing cities have a handle on their costs and cannot fund additional territory without having a tax base and the facilities paid for in advance.

[kidphilly]

An indirect subsidy in the philly area is purely on usage of the city's amentities. Folks in the burbs can easily take advantage of these without having to pay many times for all the services required to facilitate (simple things like police, sanitation, fire etc.) The wage tax in Philly is a huge deterant to business in the city because of the cost of city services and operation, while the burbs local wage tax is typically 25% that of the city. I wish there was a better spread this and assist in bring more business back to philly's core, overall i think this would be good for the whole region in the long run...

[5Lakes]

Originally Posted by sunsprit

You may be a civil engineer, but you don't know the laws/statutes/funding mechanisms of a lot of areas of the county. I'd suggest that you identify the areas where you know these situations have happened as opposed to making blanket statements which are not applicable to other areas

I gave examples in my previous post. In public projects the means of funding are identified, so they are no secret. And no, I'm not going to take the time to write a big itemized list.

Originally Posted by sunsprit

At least in our region, arterial roads haven't been widened at all at the sole cost of the municipality. The P&Z folk are astute enough to weigh the increased traffic load, perhaps additional intersections off major arterials ... and require that all be funded by the developer of the subdivision. For example, we have a new major industrial park just off the interstate, and it required a new overpass and cloverleaf to be built. It took a year for the construction, but it's now in. Similarly, Wal-Mart built a new distribution center off a small freeway interchange and the developer was required to upgrade all of the interchange as well as the surface road to the facility and attached industrial park. No state or federal funds were used in these projects ... and the developers won't get a ROI until they are able to attract other tenants and a residential community to be built to take advantage of the infrastructure.

So arterial roads are being paid for by developers? Where do you live, Dubai? Sorry, but major roadways are almost always funded by the government. Maybe an interchange can get built with developer funds, but that is only one aspect of the roadway and it does not pay for long term maintenance. Yes, the roadway department calculates how much funding they will have to do so, but that funding is not guaranteed to last. What happens when that industrial park empties out or Walmart moves their distribution center? Oh, and that immediate municipality could care less that the traffic being created by their industrial park is raining havoc on the surrounding communities roads. You think they are paying for road expansion outside of their district? Well, the answer is no.

Originally Posted by sunsprit

Again, our local developers are required to fund all of the impacts of their developlment. P&Z, Public Utilities ... if they need to expand a water plant, it's funded by tap fees ... but initially paid for by the developer who then gets the money back as the units are sold. If they need electicity and gas lines, they're paid for up front by the developer, who recaptures the money later in the access fees.

Tapping fees pay for just that, the tap (and associated valve, meter, etc.). The water infrastructure is paid for by your water bill and taxes.

Originally Posted by sunsprit

... must be acquired by the developer and deeded over to the city after it's brought up to their standards. Have drainage issues associated with all the new pavement? No problem, the system to capture and divert the water to a retention area must be funded and built by the developer.

Sure does, but it is a problem to everyone else in that sewer district who has their sewer rates go up because of extra load on the system from all that new runoff.

Originally Posted by sunsprit

I'll bet as an engineer that you can itemize numerous more impacts of a new subdivision upon an annexing city. The locals have got engineers on staff, too, who are experts in these affairs and make sure that all of them are addressed by the developers before any permits are issued, or any certificates of occupancy. I don't care if it's industrial, commercial, or residential ... the existing cities have a handle on their costs and cannot fund additional territory without having a tax base and the facilities paid for in advance.

The local engineers for each suburb care about what is in their system. Anything else and it's some other engineer's/communities problem, and that is part of the whole issue when it come to wasteful spending. Some other level of government then has to pick up the slack, which often comes out of peoples pockets who do not have anything to do with it. And that is a subsidy.

[sunsprit]

Originally Posted by 5Lakes

I gave examples in my previous post. In public projects the means of funding are identified, so they are no secret. And no, I'm not going to take the time to write a big itemized list.



So arterial roads are being paid for by developers? Where do you live, Dubai?

Yes, they are. In Wyoming, where we're not running deficit spending on our government revenues. Our state constitution requires a balanced budget.

Sorry, but major roadways are almost always funded by the government.

Sorry, but that recent development around here was NOT FUNDED by the government ... either city, county, state, or federal. One developer is speculating that a couple of new major federal installations will be coming to the area and he will get to lease land, build buildings to suit, and have long term income from them ... but it's only speculation at this time that the money to build the facilities and that Wyoming will be their chosen site.

Maybe an interchange can get built with developer funds, but that is only one aspect of the roadway and it does not pay for long term maintenance. Yes, the roadway department calculates how much funding they will have to do so, but that funding is not guaranteed to last. What happens when that industrial park empties out or Walmart moves their distribution center?

At least the initial cost of the roads were paid for by the developer, so that aspect isn't a long term burden upon the tax system. The maintenance, once the roads are accepted by the county/municipality, is paid for out of road taxes ... fuel tax, and county mil levy assessments. If you'd driven our roads, you'd know that if ... as you posit ... that WalMart pulls out, then the traffic count would be low and the maintenance required would be minimal. Hence, little or no ongoing cost to maintain that road.

Oh, and that immediate municipality could care less that the traffic being created by their industrial park is raining havoc on the surrounding communities roads. You think they are paying for road expansion outside of their district? Well, the answer is no.

Again you make wild a** assumptions that are invalid. The road access to the industrial park is essentially limited to that park in both examples I cited. If the WalMart were to close tomorrow, there'd be virtually no traffic off the highway into that specific industrial development unless another tenant moved in and needed the access. The "impact" upon surrounding communities is virtually zero except for the possibility of more residential development to satisfy the increased job market ... and that development would be paid for by the developer.



Tapping fees pay for just that, the tap (and associated valve, meter, etc.). The water infrastructure is paid for by your water bill and taxes.



Another wild a** guess on your part because all you know is the tax and spend system of your limited experience. The tap fee charged in our area is consistent with all the costs associated with that tap to the property line of the property to be served. The actual service hook-up to the residence or business is then the sole cost responsibility of the property owner. It is not unusual to see a residential tap fee around here on the order of $30,000 to $50,000 ... or more. Similarly, folks who desire electric service are billed the amount per the provider for stringing service to their property line ... and they file a lien on the property for that amount; I know of one fellow who just got service and it is being billed to him for the next 17 years at $150/month until the fee is paid off. That's in addition to his actual monthly service fee which covers ongoing operations/meter/hook-up charges and his monthly power consumption billing. Oh, and that's just to the pole by his property ... he was required by his HOA to bury the service line from there to his residence ... again, at his sole expense.

Sure does, but it is a problem to everyone else in that sewer district who has their sewer rates go up because of extra load on the system from all that new runoff.


Again, you simply don't know what you don't know. The system around here is specifically set so that the existing served properties aren't hit with increased service fees because new loads are imposed upon the system. It's pretty strict that the utility provider cannot raise their rates on existing users to subsidize new capacity from new users. If need be, a new tax district will be formed upon the new annexed area, and it will show up as a specific mill levy on the tax bill for the properties involved. Of course, if existing users need expanded facilities, such as were required recently to be built to upgrade to meet compliance with new Fed discharge standards, that's a whole 'nother matter.


The local engineers for each suburb care about what is in their system. Anything else and it's some other engineer's/communities problem, and that is part of the whole issue when it come to wasteful spending. Some other level of government then has to pick up the slack, which often comes out of peoples pockets who do not have anything to do with it. And that is a subsidy.

Again, your paradigm of what is a community, population density, service areas, tax system, local laws ... simply isn't applicable in rural areas of the USA. In our area, if you leave the municipal district and it's annexed development ... you're in the middle of nowhere, not in another community. That's 40-50-60-100 miles down the road.

My comments that you simply don't know much about a lot of the USA land area still apply. You don't and you're apparently blinded by your arrogance of your model of big cities and dense population that doesn't apply in much of the USA. Call it fly-over country if you want to, but there's people living here who require services and pay for them without imposing burdens upon their neighbors, or they do without. As in do without fire, police, zoning, building inspections, sewer, domestic water, library, paved roads, and a host of other expenses which they are willing to forgo. We're still on septic and a well, delivered propane, and an electric line which charges us handsomely for the hook-up every month (whether or not we use the power, which we don't for our irrigation 7 months out of the year ... and that's after having paid off the hook-up charge of over $30,000) ... we've got one sheriff's deputy covering 100 sq miles on call, most of the days, and the fire department is a rural volunteer fire department (with equipment funded by local tax levy, and the firefighters unpaid). If I want to take advantage of the county library, I can order books from the bookmobile and catch up with it on one day per week during it's two hour visit to our closest branch, or drive into the city where it's headquartered; yes, I have a mil levy for the library on my property tax bill. As well as the sheriff's dept. It's 9 miles of dirt road to the pavement at the interstate frontage road, and we only see a plow now on that road in the winter months because some neighbors moved in and have school age children that must be accessed by the school bus system. But we're not unusual out here ... and we're far enough away from the city that annexation is an unlikely event in the near term ... but neighbors who are closer to the city are at risk of that happening as developers buy up farms and ranches just outside the city area and are doing "flagpole" annexations. When that happens, the costs to them will be prohibitive, just for roads and curbs and gutters and sidewalks ... let alone municipal mandated water and sewer service.

[JR_C]

How many states are set up like Wyoming? Considering there are only about 530k people living in the whole state, its system of funding infrastructure still seems like an exception to me.

[5Lakes]

Originally Posted by JR_C

How many states are set up like Wyoming? Considering there are only about 530k people living in the whole state, its system of funding infrastructure still seems like an exception to me.

Exactly. Most of America is not like Wyoming. Most of America lives in suburbia and in larger metro areas. That's where the problems are. Sunspirits comments are idealistic and not how things actually work out most of the time. Even those examples have holes in them. $50k for a residential water tapping fee? That's as much as a house in Wyoming! Maybe there is a residential skyscraper in Wyoming that I don't know about .



FYI: This arrogant tax-n-spend big city liberal is actually a libertarian who grew up a country boy in the sticks in a house with a septic tank and a well.

Oh, and I just love it when I'm told things that people in my profession have insight to are wrong.

[Katarina Witt]

Originally Posted by 5Lakes

Exactly. Most of America is not like Wyoming. Most of America lives in suburbia and in larger metro areas. That's where the problems are. Sunspirits comments are idealistic and not how things actually work out most of the time. Even those examples have holes in them. $50k for a residential water tapping fee? That's as much as a house in Wyoming! Maybe there is a residential skyscraper in Wyoming that I don't know about .

There might just be something you don't know about.

FYI: This arrogant tax-n-spend big city liberal is actually a libertarian who grew up a country boy in the sticks in a house with a septic tank and a well.

Oh, and I just love it when I'm told things that people in my profession have insight to are wrong.

Maybe you should actually visit Wyoming!

Wyoming Home Prices and WY Heat Map - Trulia Real Estate Search - Trulia.com

[jimmyev]

Originally Posted by wburg

This popular delusion about suburbs leads so-called fiscal conservatives to call for increases in highway spending to serve suburbs instead of public transit, on the grounds that transit is a "subsidy" but spending tax money to help the suburbs doesn't count as taxation.

I agree with this statement, as applicable to California. But in Texas, new highway construction hasn't been subsidized in suburban areas for a few decades now. Ergo the web of toll roads blanketing the DFW, Houston and Austin areas.