Rob Nordrum

Planning Student | Animal Lover | Kayaker | City Watcher | Vancouverite

The Growth Ponzi Scheme in L.A.

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Interesting article from Gordon Price. Raises questions about the economic sustainability of development.

Price Tags

Strong Towns advocate Charles Marohn maintains that “our post-World War II pattern of development operates like a classic Ponzi scheme, with ever-increasing rates of growth necessary to sustain long-term liabilities.”

… government benefits from the enhanced revenues associated with new growth. But it also typically assumes the long-term liability for maintaining the new infrastructure.  This exchange — a near-term cash advantage for a long-term financial obligation — is one element of a Ponzi scheme.

The other is the realization that the revenue collected does not come near to covering the costs of maintaining the infrastructure. … In America, we have a ticking time bomb of unfunded liability for infrastructure maintenance. The American Society of Civil Engineers (ASCE) estimates the cost at $5 trillion — but that’s just for major infrastructure, not the minor streets, curbs, walks, and pipes that serve our homes.

The reason we have this gap is because the…

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