Ponzi Suburbs?

The article linked here from Business Insider reports on a report by "Strong Towns" claiming that suburban growth has the marks of a Ponzi scheme. Why? Maintenance is only affordable if there is growth in the tax base. They illustrate with a simple model and a number of case studies.

Case Study: Minnesota property taxes are not remotely sufficient to pay for road maintenance

A small, rural Minnesota road is paved, with the costs of the surfacing project split evenly between the property owners and the city.

Strong Towns asked: Based on the taxes being paid by the property owners along this road, how long will it take the city to recoup its 50% contribution.

The answer: 37 years. The road is only expected to last 20 to 25 years.

Or, in another town:

Because of this, over the estimated life of the new street, the City expects to collect a total of \$27/foot for road repairs. The cost for repairs will run between \$80 and \$100 per foot.

(Repair or replacement of a sewer is more expensive than laying one in when a subdivision is built.)

As long as the town keeps growing, you can pay for repair of old roads with property taxes from new homes, and kick the can down the road awhile. But if you have to are going to properly include maintenance and replacement costs you have a few choices:

1. Crank up property taxes by a large factor. This would make a number of people I know homeless: low income and fixed income. Don't bother talking about renting instead of owning: rents will have to rise too.
   
2. Let roads deteriorate a lot farther before repairing them. There are secondary costs in damage to city vehicles, etc with this.
   
3. Focus on only a core of the city for maintenance and repair, and let the rest go to hell. There won't be a lot a lot of happy campers in this case, except for the lucky cronies who own rental property in the center.
   
4. Change the methods and standards for road building and construction to use cheaper or longer-lived materials. There's a huge investment in research and new machines here, and it may not actually work.
   

Having the state or feds take over merely moves the taxes to a different category, but doesn't decrease the cost. (In fact having the feds fund it is probably more costly, when you take administrative overhead and long term money costs into account.)

I'd vote for investing in #4 ... I can point to some Madisonians who love the idea of option 3.

Of course, this assumes "Strong Towns" is telling the truth.

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One of the comments described a city's offer of land and a tax-free decade to a business, which promptly relocated at the end of ten years. I've never heard of an offer like this that turned out well. I'm speaking as one on the pointy end of the taxes--it may turn out ok for the business or for somebody who got a tax-subsidized job for those few years, but not for the rest of us. (I'd be glad to hear of examples where it worked)