[HN Gopher] We need to do the math, even on "small" projects
___________________________________________________________________
We need to do the math, even on "small" projects
Author : oftenwrong
Score : 156 points
Date : 2020-06-18 17:35 UTC (5 hours ago)
(HTM) web link (www.strongtowns.org)
(TXT) w3m dump (www.strongtowns.org)
| treis wrote:
| These guys suck at actually doing the math. Property taxes won't
| remain constant. They will rise with inflation while the bond
| repayment stays the same.
| munk-a wrote:
| On average property taxes will increase - in some areas they
| will decrease. If everyone is betting on their local tax pools
| increasing there are going to be some big losers.
| scott00 wrote:
| I was also annoyed by that. However he didn't include interest
| in his repayment numbers either, and the two errors roughly
| offset.
| treis wrote:
| I'm not an expert, but usually bonds are bought at a
| discount. The city would sell 1.5 million worth of bonds for
| 1.3 million, for example. The effective interest rate comes
| from that discount.
|
| That said, they don't seem to provide a lot of details and
| I've seen some wildly misleading numbers from Strongtowns.
| They're not to be trusted to provide objective numbers.
| brockwhittaker wrote:
| We largely live in an inflation-free environment right now, so
| I just don't believe that argument necessarily, as I might have
| twenty years ago.
|
| 30 years of 1% inflation = 26% diminished buying power
|
| 30 years of 4% inflation = 70% diminished buying power
| hinkley wrote:
| Presumably the road will increase the value of neighborhood,
| but after a point that's the city causing gentrification.
| asdff wrote:
| A lot of roads are pure waste and should probably be reverted
| into simpler gravel roads, or left unmaintained. Take a look at
| this one in Columbus (1). You have full storm drains, nearly a
| mile of sidewalk, and generous street lighting, for a road that
| connects between the highway and the city inpound lot which
| closes before dark. I'm willing to bet not a single person has
| laid foot on that sidewalk ever, given that the neighborhood
| around this road is simply the impound lot and a concrete
| factory, connected to the outside world by a single highway
| connection; you couldn't walk there if you tried without hopping
| a fence and tresspassing somewhere.
|
| 1.
| https://www.google.com/maps/@39.9093916,-82.9996459,3a,75y,1...
| xxpor wrote:
| Meanwhile most streets in Seattle north of N 85th St still
| don't have sidewalks at all. The estimated cost to add them is
| in the billions of dollars.
| karlmcguire wrote:
| > So, if we can't stop the project from happening, what can we
| do?
|
| > 1. Do nothing. Assume that you will be able to grow and borrow
| forever.
|
| The Fed is buying individual corporate bonds now. The only thing
| keeping this American experiment afloat is borrowing forever.
| gavindean90 wrote:
| I mean, not really, this is just better than the alternatives.
| Also we own the currency it's not the same.
| maerF0x0 wrote:
| This is an idea about society I've been musing a while. As a
| society hits prosperity it invests in infrastructure with a
| limited lifespan (even if decades) and therefore there is a
| certain depreciation rate of infra happening each year.
| Eventually the infrastructure will rise such that the
| depreciation rate will have equilibrium with income. At that
| point the society cannot take on any new projects without
| deciding it will abandon something else.
|
| A similar thing often happens in software -- Product Managers are
| given scope to build projects of a certain size, but rarely does
| the business commit to keeping a certain percentage of engineers
| on to maintain the project forever. So the project decays and the
| customers eventually walk away. But the Product person has
| already moved on to other things so they're no longer accountable
| for the long term picture....
|
| Just some musings, not really sure how widespread/factual it is
| or solutions...
| supernova87a wrote:
| There is a good article in the Atlantic (I will try to dig it up)
| about how the relatively unexplainable reasons (or maybe, lazily
| not explained reasons) why construction and public infrastructure
| projects in our country are costing so much (billions of $ more
| than you would expect), is really hindering our development and
| collective wealth as a country (wealth in terms of
| infrastructure, modernity of our facilities).
|
| The example was the rail development of the 2nd Ave subway line
| in Manhattan, but take almost any example of a large project.
|
| Think about how, if the cost of our projects is 2-3x what it
| "should be", we are doing without 2/3-1/2 of the improvements to
| our physical world that we could otherwise achieve.
|
| For some reason, it's a confluence of aging infrastructure, cost
| of displacing entrenched residents / businesses to make
| improvements, labor cost, insurance, etc.
|
| What it also produces is a country that does not have a lot of
| practice in doing big, important infrastructure projects. Maybe
| once every 10 years. Compared to growing younger countries where
| they have major projects, say, every other month. And as a
| result, fewer experts are around to bid for such work, and also
| as a result, the cost of such projects goes up.
|
| It's a big problem as a country ages and gets more expensive.
|
| Some articles:
|
| - https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-...
|
| - https://www.vox.com/policy-and-politics/2017/1/1/14112776/ne...
|
| - https://pedestrianobservations.com/2018/05/07/why-is-second-...
|
| And this article is not specifically on the problem of cost, but
| how replacing signals in the NYC subway has lessons like managing
| a massive software project:
|
| - https://www.theatlantic.com/technology/archive/2015/11/why-d...
| jimmaswell wrote:
| > confluence of aging infrastructure, cost of displacing
| entrenched residents / businesses to make improvements, labor
| cost, insurance, etc.
|
| What about corruption e.g. ghost employees, inflated billing
| rates, intentional delays, knowingly letting things be done
| wrong according to a mistaken spec to bill more hours later,
| all done by a company owned by the mayor's cousin? Construction
| is famous for those kinds of things.
| supernova87a wrote:
| That definitely may come into play. But I think the bulk of
| the 2-3x (or more cost inflation) for the average project is
| larger factors that no particular entity is trying to
| "cheat". Just a gradual creeping up of expectations and
| willingness to tolerate higher and higher costs.
| jpm_sd wrote:
| Off-topic:
|
| I have developed a habit of hitting Esc when modal dialogs pop up
| on web pages as I'm scrolling down reading. I never want to sign
| up for the mailing list. The webinar. The sales pitch. Never.
|
| But on sites hosted by Squarespace, Esc gets you into a login
| prompt, presumably for the site owners? Try it! Weird choice,
| Squarespace!
| lxe wrote:
| > Yearly Property Tax Paid to City in Project Area: $44,030
|
| Why is this being calculated based on the project area tax
| contribution only?
| hinkley wrote:
| If either of these roads serve as an arterial, then the
| footprint of the change is quite a bit bigger and you are
| correct, we should consider a wider tax base reflecting the
| radius of the impact of the roads.
|
| If however it's mostly a residential road, which it seems like
| it might be, then the scalability point being made by the other
| responses is probably closer to the truth.
| burlesona wrote:
| Because if the numbers don't work on overhauling a single block
| based on the tax revenue generated by that block, they also
| don't scale up to work if you draw the tax revenue in from
| "elsewhere." Everywhere else ALSO has its own road, sewer, etc.
| to maintain, not to mention fire and EMS services.
| [deleted]
| idreyn wrote:
| Presumably as a nod towards scalability, on the assumption that
| in aggregate it ought not take more than the entire town's
| property tax revenue to keep the town's roads in good
| condition.
| ssivark wrote:
| Because other areas will have their own projects (definitely,
| over the lifetime of the loan, even if not right now), and you
| can't make one pay for the other to be long-term sustainable.
| jmpman wrote:
| The author seems to suggest that the maintenance of the road 30
| years from now will cost as much as the current major
| reconstruction. I expect the maintenance of a 30 year old road is
| significantly less. I'd determine the bond required to provide
| the equivalent maintenance over 30 years, levy a one time charge
| against the individual properties (as a lien against the property
| value of needed), equal to the total costs minus the expected
| post 30 year maintenance costs. Then issue a bond for the
| expected 30 year maintenance costs. Eventually the properties
| will pay off the lien, and have a predictable yearly bond.
| Propose that to all the impacted property owners, let them vote
| on it, and go with a majority rule. If the property owners expect
| their property values to increase more than the lien, they should
| vote for it, if not, it's an inefficient use of resources and
| they should vote against it.
| syshum wrote:
| The author is saying the road has a life of 30 years and will
| need to be replaced in 30 years, since the repayment of the
| bond will take 35 years they will have to do another bond to
| replace the road again, and still be paying 5 more years on the
| road that was replaced
|
| > levy a one time charge against the individual properties
|
| that is not how public infrastructure works, or should work
|
| We pay property taxes and estiblish a government so the
| government assumes those costs and liabilities not the property
| owners
|
| There are many communities that operate like the way you
| suggest, they are PRIVATE roads, not public roads.
|
| The trade off for the property owner is they can not disallow
| members of the public access to that road, the property owner
| gives up this control because they no longer own, control or
| have any liability over the road however if you are going to
| place a lien on my property for the cost of the road then I
| better have more ownership interest and control over it
| hadlock wrote:
| The road in front of my childhoom home was originally built to
| the blog post author's "new" standard, and then replaced after
| 30 years. Rebuilding the road involved breaking up the
| concrete, laying new rebar, and pouring the concrete. This
| happened over a period of about three days. I think the road
| was drivable on day five once the concrete had set. Since the
| concrete comes out in great big chunks, the mould is already
| ready for the concrete to be poured. It was pretty fast, I
| think they really had to work to even stretch it out into a
| three day project.
|
| That said, this project in the blog post is a total upgrade of
| the street, what exists currently is two ditches, which are
| probably a mosquito spawning ground several months a year, and
| in the middle is asphalt on top of dirt which is a small step
| up from a dirt road. The end result of curbs, concrete road and
| ADA-compliant sidewalk is huge. People will want to move to
| this neighborhood after the upgrade goes in. With the bare
| strip of asphalt, the curb-appeal of the houses in this
| neighborhood is quite low.
|
| Also also, concrete residential roads typically have a 40 year
| lifespan, not 30. My town could have easily ground down the top
| 1/2" of concrete road surface for a fraction of the price and
| gone another 10 years without any further maintenance.
| asdff wrote:
| Concrete roads aren't as good where it winters. They shift as
| the ground changes temperature and expands or contracts, and
| trucks and plows destroy them at the seams.
| sroussey wrote:
| Author discusses their nice daily walks on that street, and
| questions the need for improvements like sidewalks and ADA
| compliance.
|
| Author should be thankful to not need the ADA compliance.
| kgermino wrote:
| Even the "improved" sidewalks are barely useful there. Based on
| my experience (in a very different neighborhood where walking
| is the default way to get around) I'd be shocked if someone in
| a wheelchair chose the sidewalk over the street. Even by me (6
| ft+ sidewalks, separated from the street, without driveways,
| with drivers used to looking for pedestrians at crossings, and
| much busier roads) you almost always see wheelchairs in the
| street.
|
| Uneven at every driveway and too narrow to get around any
| obstacles (such as a trash can) make sidewalks like that a
| horrible experience when you're on wheels. Add in the narrow,
| quiet streets with slow traffic and the street is very
| appealing.
|
| Technical ADA compliance doesn't make a good/useful experience.
| robryan wrote:
| That just seems like poor design, although admittedly in this
| case it could be that the lots essentially go to the road.
| Ideally you would have a grass strip between the road and the
| path that people can put bins on, park on and so that the
| driveway won't make the path uneven.
| hyperpape wrote:
| I would like a post that is clearer on this. Can you get ADA
| compliance without the full cost of the project? Would that be
| reasonable?
|
| However, regardless, if you cannot pay for ADA compliant
| sidewalks with existing tax revenue, then paying for them
| piecemeal using unsustainable bonds seems like it's only
| pushing the problem out.
| superbatfish wrote:
| I'm also wondering about this. Maybe some "outside-the-box"
| ideas could achieve it. Just spitballing here:
|
| If the street were made to be one-way instead of two-way,
| could it be narrower, leaving room for the sidewalk AND the
| ditches? Also, it isn't clear from his description, but maybe
| that would eliminate the need for "additional utilities
| improvements due to [the sidewalk and widening]".
|
| It would inconvenience the residents on that street and
| motorists who pass through. But presumably that's better than
| bankruptcy.
|
| Or here's an even crazier idea: Could the underground
| drainage be avoided if the city annexed a strip of land from
| the adjacent properties? That would surely piss them off, but
| if it were implemented city-wide, as part of a "we're all in
| this together" kind of campaign to revitalize the city
| without going bankrupt, maybe it would be more palatable. At
| least it might seem more "fair" if everyone loses a little
| land, rather than only some streets. And if owners were
| compensated monetarily, heck, some might even like it.
| sukilot wrote:
| "unsustainable bonds" is the foundation of suburban
| development.
| TaylorAlexander wrote:
| Apparently so and it's something the articles website is
| highly critical of.
| jedimastert wrote:
| I was just thinking about that. If I were in a wheel chair
| there's no way I'd just roll down the middle of the street like
| OP does. If a car comes down the street, what am I supposed to
| do? It doesn't matter if only "people who live on that street
| use it." That just means people in wheelchairs can't really
| live on the street
| 3pt14159 wrote:
| Sure they can. That street gets like 10 cars a day dude. I'd
| rather cut a cheque to people in wheelchairs than waste money
| on rinky dink roads.
| jschwartzi wrote:
| And if I'm driving on a street like that and encounter a
| guy in a wheelchair I'd yield to them until they could
| yield to me. It's so small that we can easily create ADA
| compliance by cooperating as individuals, no need to blow a
| bunch of money to add a sidewalk. Hell they could add speed
| bumps and stuff to really slow traffic down.
| kgermino wrote:
| Even where there's good sidewalks people in wheelchairs often
| just "roll down the middle of the street." It's smoother,
| easier to be seen (... safer) and you're less likely to get
| blocked by an unexpected obstacle.
| jaggederest wrote:
| Off topic, but unicode actually has a "therefore" symbol (
| [?] ). Not sure how universal it is, but it exists
| [deleted]
| centimeter wrote:
| It seems reasonable to me that you would want to build high-
| quality, cost-effective, high-utilization wheelchair-friendly
| infrastructure in a few areas rather than spend a huge amount
| of money on low-quality low-traffic infrastructure
| everywhere.
| centimeter wrote:
| > Author should be thankful to not need the ADA compliance.
|
| It frustrates me how people use this line to shame anyone who
| questions the costs of ADA compliance.
|
| There's a legitimate discussion as to whether it would be
| socially optimal for that money to be allocated elsewhere.
| $1.5M could go a long way towards education, community centers,
| internet infrastructure, or any other public project - and
| maybe it would go farther than improving wheelchair access on
| 0.32 miles of sidewalk in a low traffic residential area.
| learnstats2 wrote:
| What about the cost of not being ADA compliant, though?
|
| If there is no wheelchair access, how do you get those things
| to people in wheelchairs?
| maerF0x0 wrote:
| agreed. If there isnt a wheel chair bound person for 3 miles,
| maybe it's not worth having _that_ specific sidewalk upgraded
| first. Of course, there will come a day, but does it have to
| be this project specifically?
|
| The takeaway is that ADA compliance only has value when it's
| consumed and despite a specific rule accessibility is
| actually a spectrum that can be balanced in a case by case
| basis.
| asdff wrote:
| Is ADA compliance even so expensive? Making sidewalks a certain
| width and grade isn't hard nor any more expensive than not
| doing that, I helped my dad pretty much do this when we
| repoured his driveway apron ourselves.
|
| The rules seem pretty simple and not expensive to implement if
| you are pouring the concrete anyway:
| https://legalbeagle.com/5561359-ada-standards-sidewalks.html
|
| On the other hand, what I notice more often is a lack of ADA
| maintenance, after the initial construction might have been
| compliant. Back in the 80s, LA planted a lot of trees which
| seemed like a great idea. Today, we are no longer planting that
| type of tree because it has destroyed sidewalks all over town,
| making it impossible to travel if you needed ADA specifications
| to get around. When the city repairs the sidewalk, they don't
| cut down the newly formed 1' skateboard ramp at all, they just
| fill in the cracks crudely and quickly with asphalt, which pits
| in no time. I am stumbling and tripping on the sidewalk all of
| the time, and I don't even have any conditions affecting my
| mobility.
| centimeter wrote:
| Has anyone done a high-quality analysis on the actual cost of
| implementing ADA compliance, both in public and private contexts?
| There are going to be a lot of social and opportunity costs that
| are hard to capture (e.g. the social losses associated with fewer
| swimming pools due to high ADA-related costs), but even the raw
| construction costs would be interesting.
| frisco wrote:
| There is another degree of freedom here: project cost. Why on
| earth does 0.32 miles of residential road cost $1.5M? Having just
| managed a construction project much larger than this stretch of
| road myself, I am certain that a lot of the blame here lies with
| the contracting process as well as outrageous fees (and just
| sheer inefficiency) from the engineers and contractors. There is
| no valid reason this should be so expensive. In the rest of the
| world, I guarantee you they are not paying over a million dollars
| for something like this and their standards are just as high if
| not higher.
|
| I'm not sure there is an opportunity to fix this - I've spent a
| lot of time thinking about this now and modeling it out - by
| building a better construction company: most of the problem is,
| instead, essentially political.
| Reedx wrote:
| How much room for improvement did you net out at? I wonder if
| there's a point where it'd be significant enough to make
| inroads...
|
| The recent rebuild of _a section_ of the Bay Bridge took 11
| years and went 2,500% over budget. Whereas the original entire
| bridge was built in 5 years, ahead of schedule and under
| budget.
|
| And something I just came across: SF allegedly had 6 Salesforce
| subscriptions at $1M/YR, and not even using them[1].
|
| Given stuff like that, I worry you're right, it may hardly
| matter how much better a construction company is.
|
| 1.
| https://twitter.com/michelletandler/status/12734043395669934...
| chongli wrote:
| _Whereas the original entire bridge was built in 5 years,
| ahead of schedule and under budget._
|
| The original Bay Bridge also had 28 fatalities during its
| construction. Imagine that happening today!
| asdff wrote:
| I'm not sure that harnesses and hard hats would have
| delayed that timeline by very much.
| chongli wrote:
| It takes more than hard hats and harnesses to ensure
| safety. Of the 11 fatalities that occurred in the Golden
| Gate Bridge construction (which took place at the same
| time as the Bay Bridge), 10 of them occurred
| simultaneously when a platform collapsed.
|
| In large-scale construction, safety needs to be built
| into every aspect of planning and execution of the
| project. That can add large costs.
| ponker wrote:
| An expectation that acceptable deaths/injuries = 0
| definitely affects the timeline.
| asdff wrote:
| We haven't won that battle yet. A worker passed away
| recently at the sofi stadium construction site, due to a
| miscommunication on maintaining a panel. I don't think
| preventing this unfortunate death, which would have just
| required one person mentioning to another that they are
| working in a particular area, would have added high costs
| to the build. I'm curious to know the actual costs of
| worker safety. It's always painted as the boogyman of the
| high budget project, but how expensive can PPE, building
| hasty wooden railings, and importantly communicating
| danger to employees which was the failure in this case
| really be? I must be missing some key costs here, and
| would love to be more informed.
|
| https://www.latimes.com/sports/story/2020-06-12/attorney-
| for...
| Reedx wrote:
| Surely after 80 years of improvements in technology,
| materials, process, etc we have the ability to build in
| less time AND have no deaths.
| asdff wrote:
| Part of the costs is our low tolerance for detouring car
| traffic. Recently, LA metro made waves by shaving 7 months
| off of their purple line extension schedule, since the
| lightened pandemic traffic allowed them to dig an open cut
| along wilshire and install decking over the future station.
| Beverly Hills fought that closure from happening since the
| build began, but the pandemic forced their hand and removed
| any ground for their argument to stand on.
|
| We could save so much money if we didn't focus so much effort
| on minimizing construction impact to existing traffic. We
| would rather take a longer, slower, more painful bleed of the
| public purse, than cheaply ripping the bandaid off and
| dealing with a 15 minute longer commute for a few months.
| willcipriano wrote:
| Offer a 10% tax free finders fee to anyone who finds any
| wasteful spending like that. $600k once for a $6 million
| annual savings (and that's before you fire whomever is in
| charge of auditing the books already) is a steal. Accountants
| and auditors could work like bug bounty hunters.
| darkerside wrote:
| https://en.m.wikipedia.org/wiki/Cobra_effect
| ryandrake wrote:
| This is a great idea, but waste is in the eye of the
| beholder. A $6M environmental impact study might be
| considered waste by me, considered politically nice by the
| politician who agreed to it, considered legally necessary
| by the government's lawyer, and considered vital by the
| contractor paid to perform the study. Who's right?
| willcipriano wrote:
| If similar environmental impact studies cost half as much
| or if the study was not read by those who ordered it that
| is a pretty clear case. Some things are ambiguous I admit
| but I'm willing to bet there is enough low hanging fruit
| to keep a good number of people employed looking for it.
|
| Edit: This is a HN faux pas however, please don't
| downvote the person above, they added to the discussion.
| I suspect that may be a common objection and I'm glad to
| be able to clarify it.
| btilly wrote:
| _If similar environmental impact studies cost half as
| much..._
|
| Who defines "similar"?
|
| Is a study performed in Texas similar to one performed in
| California? Is a study performed on land that drains into
| the municipal water supply similar to one performed on
| land that doesn't? Are two studies performed near each
| other location 10 years apart "similar" if new laws have
| come into existence, or a local species has been declared
| endangered in the meantime?
|
| No matter how obvious the matter might seem, people will
| still disagree. And the people spending money can always
| come up with justifications.
|
| _...or if the study was not read by those who ordered it
| that is a pretty clear case._
|
| How do you prove that those who ordered it did not read
| the study? And what if they did not read the study, but
| instead read a summary of it prepared by someone
| qualified who did read the study?
| willcipriano wrote:
| > Who defines "similar"?
|
| A court of law.
|
| > Is a study performed in Texas similar to one performed
| in California? Is a study performed on land that drains
| into the municipal water supply similar to one performed
| on land that doesn't? Are two studies performed near each
| other location 10 years apart "similar" if new laws have
| come into existence, or a local species has been declared
| endangered in the meantime?
|
| I don't have the answer to these questions but I wager
| that we can find experts who do. Presumably firms exist
| that do hundreds or thousands of studies annually, those
| firms could testify how they would bid such a project.
| What the cost structure typically looks like.
|
| > How do you prove that those who ordered it did not read
| the study?
|
| A government employee could send a email to the effect
| that the report was not considered that is later
| discovered. Alternatively, a whistle-blower may
| clandestinely gather evidence in order to collect the
| bounty for themselves.
|
| > And what if they did not read the study, but instead
| read a summary of it prepared by someone qualified who
| did read the study?
|
| That seems like a reasonable use of funds.
|
| This isn't going to catch every case, the purpose is to
| provide a natural check to government corruption and
| waste. Discoveries made by this system may lead to the
| judicial branch investigating those who made these
| choices. The FBI could use these tips to target sting
| operations. The voting public may use this information to
| decide whom they are going to elect, and the best part is
| it's free.
| chongli wrote:
| _A court of law._
|
| If you think these projects are overpriced now, you can't
| imagine how expensive they'll be when every private
| citizen has been armed with legislation that lets them
| take the city to court in an attempt to win these cases.
| Every project will need a team of lawyers and auditors to
| check that absolutely everything in the project is beyond
| reproach. It's just insane how much things would blow up.
| buzzkillington wrote:
| >The recent rebuild of a section of the Bay Bridge took 11
| years and went 2,500% over budget. Whereas the original
| entire bridge was built in 5 years, ahead of schedule and
| under budget.
|
| To use an analogy from heart surgery:
|
| Fixing a car is easy.
|
| Fixing a running car is hard.
|
| There comes a point at which starting from scratch is better
| than trying to fix the original mess. Which in our business
| means the company goes out of business and is replaced by
| something new.
| chaostheory wrote:
| An obvious and common problem is just corruption. In many
| instances, the construction company will have personal ties
| with lawmakers, but let's pretend that corruption is a non-
| issue.
|
| Another large issue is government bureaucracy. The process for
| proposing projects, winning bids, and being able to start work
| is a very long process which incurs increased staffing costs
| due to the time it takes to navigate red tape. This is one
| reason that government projects cost so much.
| Elof wrote:
| I have a family member that works for a heavy civil
| construction company and it sounds like it's a combination of
| politics and... wait for it, corruption
| cycomanic wrote:
| > There is another degree of freedom here: project cost. Why on
| earth does 0.32 miles of residential road cost $1.5M? Having
| just managed a construction project much larger than this
| stretch of road myself, I am certain that a lot of the blame
| here lies with the contracting process as well as outrageous
| fees (and just sheer inefficiency) from the engineers and
| contractors. There is no valid reason this should be so
| expensive. In the rest of the world, I guarantee you they are
| not paying over a million dollars for something like this and
| their standards are just as high if not higher.
|
| Numbers can vary quite a bit but 1m of road costs about 10000
| euro [1] in Germany. So this seems cheap in comparison. Mind
| you the quality is also quite a bit better. I never understand
| the complaints about investment in infrastructure and having to
| pay for it in taxes. I'm generally glad to pay taxes and get a
| functioning society. But then again the country I live in also
| does not spend as much on military as the next 6 or 7 next
| countries combined. Funnily enough the same people who complain
| about taxes for the road in front of their house hardly ever
| complain about that.
|
| [1] https://www.google.com/url?q=https://rp-
| online.de/nrw/landes...
| rbritton wrote:
| > I never understand the complaints about investment in
| infrastructure and having to pay for it in taxes.
|
| In the US, this is largely due to the perception (right or
| wrong) of budget bloat and cronyism on taxpayer-funded
| projects. Those projects have a reputation for cost overruns
| and generally being more expensive than comparable private
| projects.
| zachthewf wrote:
| Fascinating. Why don't you think it's possible to build such a
| construction company? (I have no experience in construction.)
| saghm wrote:
| I read their comment more as saying that building a better
| construction company wouldn't fix the issue (e.g. they might
| not get hired), not that it wasn't possible to build a better
| company.
| bvandewalle wrote:
| I think you hit the nail on the head.
|
| Elected officials unfortunately don't have that much
| incentive to hire the "cheapest" company as the debt will
| be incurred over the next 100 years while they will be long
| gone.
|
| They probably hire the company that they feel will give
| them the least amount of trouble, which is the easiest to
| navigate or that will do something for them in exchange.
| It's the "not my money" issue at play.
| jldugger wrote:
| Presumably the problem is that honest construction companies
| don't win bids.
| pottertheotter wrote:
| I was just thinking about this same thing with my city. We have
| a fabulous little downtown square and the parks department is
| proposing to shut down a portion of a street by the square to
| make it pedestrian only. In doing so, it would be redeveloped
| into a "promenade".
|
| This portion of the street is 60' wide (including sidewalks)
| and 285' long. That's 17,100 sqft or just shy of 2/5 acre. The
| cost? $10-13mm! I can't believe that taking out the asphalt,
| replacing it with concrete, and then adding lighting and plants
| should cost that much. It's outrageous.
| onlyrealcuzzo wrote:
| It doesn't cost that much. That's how much they're paying.
|
| In my hometown, the city spent $3M to make a single right-
| turn lane approximately 20-feet longer.
|
| This is a city that went from a population of 60k down to
| 15k. And the population is still contracting rapidly. There
| is no traffic, and there never will be. And worse, there is
| no income! And there's zero growth potential.
|
| Unsurprisingly, at least last year, it was the city with the
| highest municipal debt per capita. Combine that with the fact
| the HH income is very low, and the population is shrinking,
| and it's a disaster.
|
| I find it ironic this is a deeply republican city that
| constantly talks about the need to cut spending.
| burlesona wrote:
| It's also a design problem. There are perfectly adequate
| designs that cost a lot less and function just as well, but if
| something isn't part of the official standard it generally
| can't be used. The official standards are set with a lot of
| industry involvement, and unsurprisingly they're not focused on
| being cheap.
| zimpenfish wrote:
| > In the rest of the world, I guarantee you they are not paying
| over a million dollars for something like this
|
| Not quite the same construction - this is widening a motorway -
| but an order of magnitude more expensive - PS30M per mile in
| 2006 money.
|
| https://www.theguardian.com/society/2006/dec/13/guardiansoci...
| JoeAltmaier wrote:
| Lots of city infrastructure changes are under the assumption that
| the city may keep growing. So revenues keep growing, and the
| money borrowed today may seem small tomorrow.
|
| Its a ponzi scheme. But with population growth pretty much
| constant for a century, this has worked in lots of towns. Now
| with the new norm being replacement (families have 2 or fewer
| children), the assumption is going to be challenged. The
| infrastructure-debt bubble may burst.
| asdff wrote:
| All but the eastern U.S. is growing in population.
| JoeAltmaier wrote:
| Yeah but the growth rate is half or a third what it once was,
| and declining.
| asdff wrote:
| Even out east, we are seeing rural areas depopulate and
| nearby metros absorbing that local population. For
| instance, Columbus is often cited as a fast growing city.
| However, almost all of that growth is from people already
| living elsewhere in Ohio and moving into the city for
| greater economic opportunities. As a net it looks like
| there isn't growth or even decline, as the population of
| Ohio has been relatively stagnant since 1960, but it's a
| shift of where the population is located that is also
| playing out everywhere. Part of it is also due to a lower
| need for labor in rural areas as farming and manufacturing
| become more automated, and cities are increasingly centers
| of knowledge workers and research, rather than industrial
| centers.
|
| In the context of climate change, it is also better to
| favor investment in cities which are already well scarred
| by human activity, and have a lot of infrastructure and
| capital already in place, than to expand into or increase
| the existing environmental impacts on our natural and rural
| areas. In California, we've built to the edge of what is
| sensible given the fringes of civilization perennially burn
| to the ground.
| xchaotic wrote:
| Looking at the rest of the economy, public infrastructure
| projects like this are the only hope to keep the economy running.
| Yeah there will be some paper debt on municipal books but the net
| benefit of the money unlocked from this is much higher. At least
| from an economic sense. In a perverse way the more these projects
| costs, the more money is redistributed.
| PostOnce wrote:
| If a large percent of the money just goes to the few owners of
| the construction company and not to an army of workers, then it
| was all for naught, so that has to be factored in too.
| jkingsbery wrote:
| The Strong Towns book goes into this in more detail. What you
| say might be the case sometimes, and when it is the case, the
| money unlocked is reflected in higher property taxes, so the
| municipal balance sheet stays even. If the town can't somehow
| get higher property taxes for its improvements, then it spent
| more money than it will make on the project. If you do that
| enough time, municipalities start going bankrupt. If people
| aren't willing to pay higher property taxes for the
| improvement, then it isn't really helping them.
| alex_young wrote:
| Somehow we afford paving streets in cities. I wonder how that
| happens when the math is always so bad?
|
| Perhaps it's because we socialize the cost since the paved road
| benefits more than the immediate houses on that block.
| cagenut wrote:
| thats true in many scenarios but basically untrue in cul-de-sac
| style designed communities.
| jariel wrote:
| So the people living in small, dense dwelling and apartments
| can foot the bill for the nice roads of the folks with big
| properties ...
|
| I wonder how the dynamic would change if all 'access roads'
| i.e. roads with homes on them, and not 'artery roads' had to be
| paid for by the local neighborhood.
| burlesona wrote:
| This has been considered. For example, Virginia greatly
| restricted cul-de-sacs[1], and my understanding is that the
| mechanism by which they accomplished this is changing the
| rules so that only "through streets" would be eligible for
| public maintenance going forward, hence if you had a cul-de-
| sac or private loop road or something you had to maintain it
| yourself. But I think that's only forward-looking, it doesn't
| change things for all the private roadways built in the past.
|
| 1: https://www.planetizen.com/node/37942
| xxpor wrote:
| The way VA does road maintenance is wildly different than
| nearly every other state though. Every road outside of
| independent cities is state maintained. Not county or town,
| but full state maintenance. It makes it much easier to do
| these types of changes.
| burlesona wrote:
| There are a number of factors, but the simplest gist:
|
| 1. The models for road funding and development were developed
| in the 1920s and 30s, were based on much denser areas (old
| towns) that paid a lot higher taxes per acre, and much simpler
| roads (which cost a lot less).
|
| 2. The models haven't been significantly updated or
| reconsidered since, even though the development patterns have
| been mandated by law to become much less dense, while street
| standards have also greatly increased, meaning much less tax
| base to support much more infrastructure.
|
| 3. This often pencils out in places that are growing because
| there are heavy state and federal subsides for "growth"
| projects where the up front capital cost is 80-100% paid for by
| non-local funds. That infrastructure works without maintenance
| for a while, and likely won't need heavy maintenance for 20-30
| years, but at that point it'll need to be rebuilt at about the
| same cost adjusted for inflation as it cost to build.
|
| In theory what should be happening is cities should be piling
| up money from taxes on these projects that were subsidized, so
| that when the maintenance bill comes due they have the funds to
| do the maintenance.
|
| But in practice, the taxes that come in from "today's" new
| growth are used to pay for the maintenance on "yesterdays" old
| infrastructure that needs to be replaced.
|
| Thus, things appear to "work" as long as steady growth
| continues and new tax income continues to be generated locally
| while the costs associated are funded from outside. But when
| growth slows down or stops, things quickly break down.
|
| You can see this pattern of "rolling blight" all over the
| country, where so many of the older suburbs are falling apart
| with decaying infrastructure, and people who can are moving
| farther out to the "shiny and new" suburbs where everything is
| in good shape.
|
| The problem is especially pernicious in the rust belt, where we
| have seen metro areas dramatically expand in surface area every
| decade even as their population has barely increased (or
| shrunk) since the 1950s.
| ssivark wrote:
| > _The models haven 't been significantly updated or
| reconsidered since, even though the development patterns have
| been mandated by law to become much less dense, while street
| standards have also greatly increased, meaning much less tax
| base to support much more infrastructure._
|
| This sounds like the utter lack of critical thinking which
| might result in a failing grade for a college term paper, so
| what gives? As in, what is the thinking with which sane
| people could justify using such models and/or approving
| estimates?
| burlesona wrote:
| A lot of it is time and culture gaps. These problems take
| 20-30 years to unfold so the people who create the problem
| are gone before the problem appears, and then the people
| who face the problem look at the budget and go "I dunno, in
| the past we made money when we took state subsidies and
| grew, we should do more of that." Suburbanization is a
| cultural phenomenon, and the result of a lot of social
| engineering and propoganda from as early as the FDR
| administration and continuing into the 80s and 90s. That
| makes it harder to question.
|
| There's also the old adage of it being hard to get a person
| to see a problem when their job depends on them not seeing
| it. https://www.strongtowns.org/journal/2011/12/12/best-of-
| blog-...
| peterwoerner wrote:
| The alternative is to provide fewer/worse services for more
| money.
| civilian wrote:
| "Somehow we afford paving streets in cities"
|
| There's two explanations:
|
| 1. Previously, the streets were simply pavement and a ditch.
| Now they're being upgraded to pavement-sidewalk-
| internaldrainage-internet-power. It's more expensive and
| potentially unsustainable.
|
| 2. We can't afford it, b/c we're relying on all of these bonds.
| If _every_ block in the city requires a bond that the property
| tax from that block can't pay, eventually the banks will
| recognize that this city isn't a good debitor.
|
| But furthermore, is this the best use of funds? Is adding a
| sidewalk worth 1.5m, when it could be spent elsewhere?
| inetknght wrote:
| Or a third explanation as @frisco's comment [0] suggests; the
| price tag is bloated
|
| [0]: https://news.ycombinator.com/item?id=23566731
| jkingsbery wrote:
| It's worth reading the Strong Towns book that goes into this in
| more detail.
|
| We haven't always afforded paving streets in cities. Many
| cities started with dirt roads in a small settlement. As the
| settlement grows, the investment in roads (sometimes) begins to
| make sense. As that investment happens, you can see over time
| an increase in the quality of buildings and population density.
|
| Perhaps you still disagree with it, but the point is that towns
| routinely make infrastructure improvements for which there is
| no cost socialization that makes the improvement worthwhile
| over the improvement's lifetime. You're right to suggest there
| is some benefit. In the example from the article, however,
| another street is used as the through street, so the benefit to
| people in other parts of the town from this road being improved
| is vanishingly small. It would not be worth however much their
| taxes would go up. You can also socialize across time through
| borrowing money, but in this case you would get 30 years worth
| of road for 35 years worth of money.
|
| It's an interesting book, because it does not even suggest that
| socialized costs or central government planning are bad in
| themselves, only that the way we're socializing costs is
| setting up our towns for bankruptcy.
| CapriciousCptl wrote:
| So much doom and gloom in that article. The town in question is
| McKinney TX, and I grabbed their annual budget[1]. Property taxes
| make up 50% of their ex-services (water, sewer, trash, parks/rec,
| airport, etc) revenues.
|
| And, the bonds in question will yield ~1.5% at today's rates. In
| other words, less than inflation. Meanwhile, McKinney has lowered
| property tax rates in response to higher appraisals (inflation is
| a major driver of increased appraisals on balance).
|
| So, I take 2 issues with the article. First is the payback
| period, since property tax revenue only makes up 1/2 of the ex-
| services income and will increase with inflation. And second,
| with the idea that every area must cover its own expenses. In
| general commercial, high-dense and/or rich areas subsidize
| projects in other neighborhoods. You're going to be able to
| cherry-pick a project that can't be paid by its beneficiaries in
| every single city.
|
| [1]
| https://www.mckinneytexas.org/ArchiveCenter/ViewFile/Item/22...
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