Opinion: When New Growth Is Really a 'Giant Ponzi Scheme'

"Most cities and towns in North America are functionally insolvent. This is not hyperbole. It comes down to a simple question: Is new development producing enough wealth to fund the long-term maintenance of its own infrastructure—let alone public safety and all the other services that we expect government to provide?" asks Charles L. Marohn, Jr.

The answer is no, he says, because growth and productive growth are not the same thing. In car-centric cities, tremendous amounts of money are poured into streets, parking, and other infrastructure, but the return on investment is low. One example is big-box retail, where the financial productivity of properties, measured as value per acre, is generally dismal compared to more robust downtown, mixed-use developments.

He suggests that municipalities focus on strategies that foster creative reuse and redevelopment instead of development patterns that require huge subsidies. "America needs to step off the kinetic growth treadmill and embrace an approach that truly builds wealth and serves our citizens. We need to shift to a bottom-up approach for building our cities, one freed from the pressures of national growth targets."