There are two subsidies that are universal to the American style of development.
The poor neighborhoods are subsidizing the affluent neighborhoods. That is a universal truth of American development.
Future generations are subsidizing today’s generation.
Chuck Marohn: There’s a reason why our ancestors, and I say that in the largest possible sense of the word, why our ancestors built in this way. These are micro shots of a city, but when we step back to the macro and look, we see the same basic trends. What I’m going to show you right now is some brilliant 3D modeling done by a friend of mine named Joe Minicozzi.
If you think of a farmer going out and spreading seed in a field, the parts that grow up the most robustly, we call those the most productive parts of the field. What I’m going to show you in the vertical now, is value per acre. Where is the most financially productive parts of a city. I’m going to start with Buffalo, New York.
Because Buffalo, New York, has been hollowed out in this new experimental way to build. After World War II, people started to leave Buffalo. It has lost population every census since 1940, there’s been a continual downward trajectory. They ripped down so many buildings to put in parking ramps and parking lots.
It is a tragedy what has happened to downtown Buffalo. Yet, when we step back, and we look and say, “Where is the most productive land use patterns in the city of Buffalo?” can you point to where that traditional downtown is?
Not only is it still, despite 70 years of decline, this massive repository for wealth, but it absolutely dwarfs everything around it. We can go to cities that are much smaller. This one is one of about 60,000 in upstate New York. We see the same general trend.
We can go to cities that are very, very small. This is one of 1,200 near where I live. When I first went to this city they said, “Chuck, we’ve got some great stuff going on out here, we’ve got some great stuff going on out here, but these neighborhoods here are terrible.”
Joe and I did a study. Joe’s team and I did a study, in Lafayette, Louisiana. Where we not only looked at the revenue being produced but we actually looked at the expenses for each property in the city. We dug through all the city records, we pulled everything, where are you spending money, how do we allocate that by parcel, where is your revenue coming from, and where is that allocated?
At the end of the day, we printed this map. I realize, statistically, there are people in this room who are red‑green color blind, and I apologize to you because this map makes less sense to you than to others. I will walk you through this.
[Looks over shoulder at screen] No, I won’t, because my pointer is also green. [Audience laughter.] I think you can probably see the difference, though, so I’ll try this.
Every place where you see green is a place where the city is bringing in more money than they’re spending. Every place where you see red is where the city is spending more money than they are bringing in.
Let me show you what is going on in this map. There is a spike rate here. That is a green spike. That is a development called River Ranch. It is a new urbanist development. By new urbanist, in the context of our conversation tonight, what I’m trying to say is, that it is a development built with traditional development style, with modern financing. Tight streets, tight neighborhoods, but everything is built all at once to a finished state.
It is still unclear whether 25 years from now, when everybody’s roof fails at the same time, everybody’s driveway fails at the same time, everybody’s appliances go bad within 5 years of each other, whether this neighborhood will have the stickiness to renew itself. But, right now it’s absolutely killing it, it’s the most profitable place in the entire city.
Just to the east of that is a big green area right here that is their core downtown. Now, Lafayette is a great place, they are really trying hard, but their core downtown reflects, kind of, the college nature of their town. Dive bars, a couple of restaurants where you can get tacos for two bucks. They’re struggling. They would kill to have a block of the excellence that you have here. It is a marginal place. Yet, financially it is weighing in really heavy. It pulls in a lot of green. It is very cash flow positive.
There’s a crescent of green that runs through here. That crescent of green is the poorest neighborhoods in the city. When we were going there, and we’re getting an Airbnb to do our work, our research, the city staff told us, “Don’t go to those neighborhoods.” That’s where the burglaries happen, the homicides happen. That’s the bad part of town.
All the rest of this is red. When we look at this red, what do we see? Out here you have the malls, the big‑box stores, the strip malls, the drive‑ through restaurants. You have the sub‑divisions with the cul‑de‑sacs, and the three‑car garages. We have all the stuff we built the last 20, 30 years.
There are two subsidies represented in this map. There are two subsidies that are universal to the American style of development. Subsidy number one. The poor neighborhoods are subsidizing the affluent neighborhoods. That is a universal truth of American development.
Subsidy number two. Future generations are subsidizing today’s generation. The city of Lafayette today has a $45 million backlog of road maintenance. They add millions to that every year. Their budget to keep up is something like a million. If they double, triple their budget they’re never going to catch up.
The typical family in Lafayette pays $1,500 a year in taxes to the city. In order to make good on every promise represented in this map, taxes would need to go from $1,500 a year to $9,200 a year. That will never happen.
What you’re looking at here is a future for Lafayette where they’re going to have to make difficult decisions. They’re going to have to decide what road they don’t maintain. What pipes they don’t fix. What part of town they let go.
We’ve seen this before. You guys have heard of Detroit. Everybody has a narrative for Detroit. If you’re on the right side of the political spectrum, you have a narrative for Detroit. If you’re on the left side, you have a narrative for Detroit.
I’ll tell you my narrative for Detroit. Detroit got started in this experiment before everybody else. They did it more aggressively. They arrived at a logical destination, ahead of everybody else. They have been undergoing a decade or two of contraction, of trying to figure out how to keep everything going until they couldn’t anymore.
Now they are dealing with the consequences of that. That is not an anomaly of America. That is the way we had built all of our cities. When we step back, and we look at what these places look like, it gives us a sense of what we can start doing now to make things better.
These are from analysis we did in North Carolina, where we see the Kmart site, coming in at 384,000 an acre of financial productivity. The Walmart at 967,000 an acre of financial productivity. These were sites they were very proud of. The city had spent millions running sewer and water out, building an interchange, subsidizing these places.
Yet, when we go to the court downtown we see an old warehouse turned into a supper club that’s now five million an acre. My favorite place of all time, Jimmy’s Pizza, 3.4 million an acre.
Now, let me ask you this.
Do you, the people of Salem, when you step back and look at your cities, if you experience your city at 2 miles an hour, instead of 45 miles an hour, and you realize how much space is between everything, how huge the gaps are, how much underutilized pipe and street and sidewalk we actually have here, do you have the wherewithal, the sophistication to build something as exquisite as Jimmy’s Pizza?
If you do, and I believe you do, if you can raise yourself to that bar of sophistication, you can start to build tremendous amounts of wealth within your community. Not only are you building tremendous amounts of wealth, but we all understand the profit implications of this style of development versus this style of development.
Jimmy’s kids go to school with our kids. He goes to church at our church. He buys his supplies from people locally. He advertises in the local paper. He banks at the local bank. This has huge implications for who we are.
There’s one last concept here I want to share with you, and it really goes to the core of who we are. This is an adage from Silicon Valley. “Innovation that happens from the top‑down tends to be orderly, but dumb. While, innovation that happens from the bottom‑up tends to be chaotic, but smart.”
We all prefer if we were to pull people, smart to dumb. As affluent Americans, we have a really, really strong preference for order over chaos. We will tolerate a lot of dumb in order to have order. If you doubt me, think of the last time you sat at a traffic signal at one in the morning.
Let me show you what this looks like at a city. This is Memphis, Tennessee. Memphis, Tennessee is a fantastic city. I’ve been fortunate enough to be able to work with Memphis on a number of things, but Memphis shows up often on all those statistics you don’t want to be on. They’re often one in two with Detroit. Poverty rate, homicide rate, out‑of‑wedlock births. You see, Memphis and Detroit shift one‑two‑two‑one. Memphis, though, has done everything they were supposed to do to create growth and prosperity.
After World War II, they ran the highways through the middle of the city. They ripped down buildings to make that happen. They ripped down buildings to put in parking ramps. They extended sewer and water and grew outward. They eventually built a beltway around the city.
They put in bridges over the Mississippi because that would create growth on the other side. The idea was, “We’ll keep inducing more and more growth by our big construction spending projects.” They eventually built out so far, they built a second beltway. They subsidized businesses to move into Memphis. They subsidized businesses to stay in Memphis.
At one point, they decided is what they needed is a huge public works project that would help them land an NBA basketball team. They went and built a pyramid‑shaped stadium down on the river, and went looking for a team. They were eventually able to find a team.
Those of you that are not into basketball, Memphis was able to get the Vancouver Grizzlies to leave Vancouver and move to Memphis. The problem was when the Grizzlies came to town, they didn’t like the stadium.
The city wound up building a new stadium a few blocks away from here. This one sat empty for 15 years. After a couple of hundred millions of dollars of tax subsidy from the state and the local government, they were able to transform this into a Bass Pro Shop.
Orderly, but dumb. Let me show you chaotic, but smart.
This is also in Memphis, Tennessee. Memphis, Tennessee.
This is a little street called Broad Avenue. Broad Avenue used to be a streetcar stop. When the city went through and put the highways through the neighborhood, they ripped the streetcar out. Without the foot traffic, without the streetcar stop, these blocks just died.
Some residents fed up with the decline, fed up with the neglect, went and took matters into their own hands. They went out and work with the storefront owners to get them swept out. They swept up the sidewalks. They went out and painted their own bike lanes. They painted their own crosswalks.
They invited, for one weekend, businesses to come in and open up and just show people what this could look like. They had a ice cream stand, a couple art galleries, a bike shop, a clothier. They didn’t go get city permission. They didn’t get go get department of health inspections.
They said, “By the time anybody gets angry at us, we’re going to be gone anyway. So, let’s just do this.”
It actually made the street kind of a nice place. This isn’t the greatest street in Memphis, but it’s a heck of a lot better than what was there before they started.
I wasn’t here for this project, but I was out there six months later. They brought me out. When I was out there six months later, every single storefront was occupied by a business. I talked to one of the owners of the buildings. He said he was able to charge twice the amount of rent for the last place to go than what they were asking before the project started.
The city has since gone out and documented 18 new businesses, 32 new jobs, $12 million of property value appreciation in the neighborhood.
Total public investment, zero.
That is chaotic but smart.
Now, I don’t know what your city would do if you guys went out and started painting crosswalks.
I can tell you what my city would do. We have no tolerance for that type of chaos. The Monday morning, you would have the city engineer and the city attorney out there. The city engineer would have the manual on uniform traffic control devices. They’d be saying, “That doesn’t meet our standard for a crosswalk.”
The attorney would say, “Well, then, we have some potential liability. Get the power washers out here and get rid of this.” Then they would send the police chief over to my office to give me a ticket. We would have no tolerance for this.
In Memphis, though, they’re very smart. They’re very smart. Their desperation has made them very smart.
What did Memphis do? They went out with power washers and got rid of this. Only after they had a plan to put it back permanently.
You see, what the city of Memphis understands, is that they could have all the public hearings, all the commission meetings, all the special tasks forces, all the surveys, all the sticker charts on the wall they wanted, and they never would have identified this as a high return investment.
But their people did. Because their people did, their job now is to never let it go backward.
The city of Memphis is really smart. Really, really smart. Here’s what else they did. They were actually redoing that highway, right behind this places. When they were doing that, you know what they said?
They said, “Wow, there’s stuff going on in this neighborhood. Let’s stop this highway plan, and let’s actually take this couple blocks here, and change the cross‑section to see if we can add some more love to what’s going on here, and get people to be able to flow more easily across the street.
“We’re not going to spend $5 million on pedestrian ramps and tunnels. We’re not going to completely redesign it. We’re just going to tweak this in a small way so that we can try to nudge this thing along a little bit more.”
They had a bikeway that was going in, that was funded by a federal grant. It was six blocks away. They said, “Wow, there’s great stuff going on in this neighborhood. We would be fools if we didn’t leverage that with another little nudge.” They rerouted that bike lane that they were putting in to run right through this neighborhood.
The city of Memphis is smart. Their desperation has made them smart. They’ve realized that the people and their city are showing them the way. We were so inspired by what was Memphis did, that in my hometown, we started a group called A Better Brainerd.
We went out in that block with the Taco Johns and the old and blighted block. We went out in that neighborhood, and we spent a year observing where people struggled and trying to find ways to address those struggles.
We saw the kids walking through the alley. “Why are you walking through the alley on the way to school? Our mom said it’s not safe to walk on the streets, so walk back here.”
We saw the mom walking with a stroller through the ditch. “What are you doing?”
“Well, I have to get to the grocery store to get milk. I don’t have a car today. It doesn’t feel safe walking down the street so I’m walking here.”
We saw the elderly woman walking with a walker in the middle of the street climbing over mounds of snow. “What are you doing?” “Well, I have to get to the pharmacy today. I don’t have another option. The sidewalk is not shoveled so I have to walk here.”
We went out and we tried different things to see how people would react and if it made life a little bit better. After a year of working in this neighborhood, we came up with a report called Neighborhoods First. It detailed eight projects the city could do to make people’s lives a little bit better.
Under the idea that if we showed the neighborhood some love if we made it a little bit better place to be, that people might actually want to live there. They might actually want to stay there. They might actually want to invest and make their properties better.
Little things like, put in a crosswalk here, put in a bike lane here. Plant a row of trees.
My city right now is in the process of spending $14 million to run sewer and water two miles out of town to build a business park out at the airport. We already have a business park we built in the ’90s that’s only half‑full, but this one is air‑oriented, and we’ve convinced ourselves that that has some type of magic cachet that’s going to create jobs, and growth, and spin off in wealth for everybody.
The total cost of our eight projects? $16,700.
What happens if we go out into this neighborhood and spend $16,700 making small, little improvements to try to make things better, and nothing is better?
Well, we’ve lost $16,700, and we’ve learned eight things that don’t work. Go and try eight more things next year. But, I think they’re going to work. I actually went to the city engineer and said, “I think you could use a sidewalk here.” [Pointing to grass worn by people walking in slide above.]
Do you know what his response was? “Why would you say that, Chuck?”
We will never find the high return investments in our communities the way we do things today. We will never identify the high return investments the way we do things today, with public hearings, and commissions, and charts, and top‑down funding.
The way we will identify the things that our communities need to become strong and successful, is to actually humble ourselves to go out and to look at where people struggle, and then ask a very simple question. What is the next smallest thing I can do right now to address that struggle?
If we can do that, day after day, week after week, year after year, if we can humble ourselves in that way, not only will we be making the highest returning investments that we can possibly make in our communities, we cannot help but improve people’s lives in the process. Thank you so much.
Audience Member: Can you explain more about poor neighborhoods subsidize richer ones? Is that what you were saying? Can you explain that a little more?
Chuck Marohn: Yeah. The tax generated through poor neighborhoods exceeds the amount of expense we spend in those neighborhoods, and that excess cash goes to other places, where we are spending far more than what we bring in.
Audience Member: [Because the poor neighborhood has] been around longer…?
Chuck Marohn: No, no, because they were built . . . The reality is that those places were largely built on principles that are really financially potent and resilient.
It’s a quirk of fate, and I said it’s a universal trait, the American development pattern. We can go to oddities in the system, such as San Francisco, Vancouver, New York, which are oddities in the system, where wealthy people actually live in those places. But for the vast majority of US cities, including this one, the poor people live in the poor neighborhoods. Those are the older places, the tighter places and those places generate more revenue per acre and have lower overall expenses than the stuff that we build brand new today.
Audience Member: Do you think there is a relationship between the poor returns on the new type of building and their general ugliness?
Chuck Marohn: From our vantage point, I think no, initially, but yes over the very long term. I’ll answer that this way.
Classical development styles — I’m not an architect, I’m not going to pretend I’m an architecture snob, this is not my field of expertise.
But, when we step back and look at architectural styles that descend from the Greco‑Roman, in the West, the Greco‑Roman kind of approach, where you have certain ratios, certain amounts of symmetry. The ways you front the street, and interact, and address the public realm. These things were all just inherent in the development style of the pre‑Depression type because they were built in scale to people who walked. You didn’t want to have a 50‑foot blank wall with nothing. You would have windows and interaction.
Yes, those timeless forms of building retain their value better than the stuff we build today, which is very random, chaotic, fake. It has a very different, kind of, longevity to it. I couldn’t give you detailed architectural explanations, but there are people, Will is one who’s a brilliant guy on this, very much could and would make that argument very strongly.
Audience Member: The reality — until we have the Big One after all of our houses are wrecked — is that we do mostly live in the suburbs and outside of downtown. But, how can we, with the existing zoning laws, or changing the zoning laws, how can we create more small villages within the cities in the suburban kind of streets and areas?
Chuck Marohn: That’s a great question. I will set up a straw man that I can beat up because it’s a straw man you all will recognize.
I think planners have this [idea] — The next fetish we have is with node style of development that is incredibly intense. Sometimes we call it transit‑oriented development, or we call it high density.
The idea is that you pick a place, and the planners know where this place is because they’re smarter than all of you, they’ll pick that place and then they’ll say that place should have very high density.
A lot of times that conversation is, where can we put those people so that they won’t be near me? I think that that is destined to fail, and we can talk about why I think it’s failing miserably in Portland, and really leading to Portland’s unaffordable housing problem. The problem they’re trying to correct, they’re actually causing with their policies.
We could talk about that, but I think that for your situation here, a far better strategy is to say, every neighborhood should have the opportunity, by right, to build the next increment of intensity.
In other words, if you live in a neighborhood of single family homes, you should be able to, by right, show up to City Hall at 9:00 AM and by noon, walk out with a permit that would allow you to build an accessory structure, an apartment on your lot, or convert your home, through addition or whatever means, into a duplex.
If we do that for a generation, what you will see is that your places will not alter that much, they will not change that much. You will be living the style of life that you have now chosen, but you will be doing it in a thicker rug with essentially a lot more wealth.
What will happen over time, and we can actually see this going on in places like Detroit and Memphis where they’ve gone through the down, is that some neighborhoods react to that very robustly. Bam, they start to build.
Then, what happens when you get that duplex, then you can incrementally grow to the next level. You’re a neighborhood now of duplexes, why don’t you become a neighborhood of quad units?
What we see is it starts that incremental progression up. It never distorts property values by having huge jumps. It stays within itself and grows incrementally. What you’ll see is that neighborhoods and villages start to coalesce out of that.
We need to, in general, stop thinking of commercial as a separate entity than residential.
In the early 1900s, planners scored this massive victory when they separated smelting plants from apartments. Since then, we’ve had this obsession with separating everything from everything.
The reality is we do not have smelting plants anymore, and it’s very easy to take noxious things and put them out in the middle of the nowhere. What we’ve said now, is that I can’t have a business with a delivery across the street from me. OK, no. We actually have to allow [that].
We should be obsessive about the form of our building, how a building addresses its neighbors in a respectful way. We should not be obsessive about the uses going on in that building, the way we are today. Planners call that mixed‑use. I hate the way they implement it. I just call it development. We should just embrace city development.
Audience Member: I’m curious about either before or after someone in a city heard you speak, if anyone had done a real estate assessment of their long‑term financial obligation and said, “Wow, we’ve got to stop the madness.” What strategies did they use?
Chuck Marohn: Yeah, yeah. It’s funny because I spent many years in the wilderness talking about this stuff, and especially back home, I had this one critic that would follow me around and her question was, “OK, Chuck, where is the city that’s done what you said?”
It was like trying to invalidate me, I know you’re not doing that, but it’s very frustrating because nobody does this. Nobody does any simple return on investment calculation. We’re building a new $500 million bridge, how much does our tax pays need to go up to pay for that replacement and repair that bridge in the future.
That is actually … That is actually a fairly simple calculation, and if you do that calculation what you find is that the number you get is astronomically greater than anything you could ever conceive.
Yes, I’ve seen cities start to do that. Early on we saw cities killing bad projects because that’s the easiest thing to do is to say, we’re not going to do dumb things anymore.
[The] harder thing to do is to revamp your system of delivery, and we a lot of cities now, Memphis is a great example having changed their staff, there is project delivery process. They still struggle sometimes because we’re all human, but they’re doing a lot more small innovative things.
We see cities all over and a lot of them are inspired by our work, but they’re also inspired by a lot of other stuff, the Tactical Urbanism, the Better Block people, because we’re doing brilliant work with the high investment projects, so going out and trying to do little things with paint and straw bales and bollards to make places work.
Probably the principal place that we’ve seen like, the complete city lobotomy is a little place called Hays, Kansas, population 25,000. They drank the [Strong Towns] Kool‑Aid before I ever met them. They called me up one day and said, “We’d like to share the stuff we’ve done because of the work you’re doing.” They sent me all these reports about how they had redone their entire budget process, their entire capital improvements planning process and it just blew my mind, because it took these principles and applied them in a brilliant way.
I think we need more cities [like that], I’m standing up here tonight saying I have identified a problem, I have some philosophies about what a solution should feel like, but I’m not going to stand here and pretend that I know how Portland should it, how Dallas should do it, how Brainerd should do it – I do think I know how Brainerd should do it.
We’re all culturally different and I think we’re all going to figure this out in a different way.
Audience Member: Do you in your opinion think that states and the cities that are all giving away tax breaks for large corporations to get them to come into our cities and towns are part of the problem?
Chuck Marohn: The very short answer is yes.
I think a slightly longer more complicated answer, there [was] certainly basis for the notion of them doing that. If you go back 40 years that was an economic development strategy that worked. Today, it no longer is. The pull, the ability to pay a business to move is one that has long past.
What happens is that you have business that is looking to move and they’ll find three or four places that are acceptable and they will say how much will you pay me versus how much will you pay me, right? We have a name for paying someone to pretend they love you.
That’s not a sound economic strategy.
What we find is that the cities that are actually most successful in today’s competitive marketplace are cities that actually have great people. Because the type of businesses that you’re trying to attract by paying them money, they’re number one commodity that they’re short of is a great workforce.
This why you can see even in a high tax states — and I’m not a high tax advocate guy, but you can see, even in high tax states, where you have high‑quality workforces, they attract businesses, and low tax states with low‑quality workforces do not.
Really, our business development strategy has to change from being one of trying to pay businesses to pretend they love us to one of building up our cultural presence so that great people move here, stay here, live here, invest here and find our community to be a successful place.
If you’re very interested in economic development, there is a thing that the Lowe Foundation has taken from Littleton, Colorado called Economic Gardening. Economic Gardening is the –just go read about it.
It is the brilliant way that cities today are creating lots of high paying, high capacity jobs with absolutely no subsidies, just by tapping into phase two businesses and their rapid growth characteristics and by assisting these magic CEOs that know how to create jobs by assisting them with the things that they generally struggle with.
A CEO of a fast growing stage two company doesn’t need money. They need to know who are my competitors, what are my competitors charging, where is the market for my product? These are things that these people don’t intuitively know because they’re not business people, they’re inventors, they are idea people.
Economic Gardening is a program that started at Littleton, Colorado, that the Lowe Foundation has now funded on a national basis to try to help cities do — as shown over and over again — with pennies on the dollar, produces lots of high‑quality jobs.
(Elected official) Audience Member: I wonder if you can comment a little more about the wisdom or folly of spending money on building new infrastructure and roads and bridges, but we cannot maintain roads and bridges and infrastructure that we have right now.
Chuck Marohn: Only an insane people would think that it’s smart to build more when you can’t fix what you have.
The Department of Transportation head for Tennessee, when he was named went to the legislature in Tennessee. Schroer is his last name, I can’t remember his first name, brilliant guy.
He went to the legislature and said, “Look, we have a house with a leaking roof, you want me to put on an addition, I’m not going to build any addition until we fix the roof, period.” Is that common sense or what?
Here is the way cities operate [today]: imagine and think about that map of Lafayette, we had the green areas and the red areas.
A city today is like a company that has five divisions and the one division is profitable and the four divisions are losing money, and our solution to that problem is to build a fifth division that looks like the four that are losing money.
That makes no sense at all.
To me, I think the solution is to make sure that the first division never fails.
Your good neighborhoods should never suffer from lack of maintenance.
Your downtown should always have sidewalks that are fixed, should always have streets that are properly maintained, should always have lights that are on, should always be taken care of, because it’s producing huge amounts of wealth for you.
Then in the neighborhoods surrounding that, maybe [they] are cash flow positive, maybe are not but are on the borderline, those places should be getting the excess, the wealth being generated [in the downtown], they should be getting the love and brought back up, because that’s the division that can actually be made profitable with a little bit of tenderness.
The other ones are the places where you’re going to have some difficult triage questions, but you are fools, we are fools, I will put myself in this American pool of people. We are fools if we build more.
Do you want to know how big a fools we are?
Audience: Yes. [laughter]
Chuck Marohn: Detroit, which is undergoing massive contraction.
They are letting go of whole neighborhoods.
They’re letting go of pipes. They are digging up roads but building more stuff too.
It is so ingrained in who we are and what we become. It so ingrained in our processes and the way we envision ourselves.
Think of like the Romans with the Gauls coming in saying, “We can still have that circus,” and it took a while for them to come to grips with the world have changed. We can be smarter than that.
I don’t want to rail on your bridge project. I’m not here to fight about a bridge, but to me, the idea of building even a frontage road to a potential bridge is a bizarre concept when you have so much stuff that you cannot afford to maintain today.
You’re actually going to have to make really, really difficult painful triage decisions in the future about the stuff that you’ve already built, why would you make that problem way, way, way worse?
Audience Member: We have [many people who work at] these [places] like Walmart, and Macy’s, and Target and all of that. How can they become part of the solution?
Chuck Marohn: How can they become part of the solution, the rational response to this set of problems?
OK. Here is the thing, I have people all the time who used to call me and say, “We’re getting a new Walmart. Will you come and help us defeat this Walmart?” and I say, “No, I’m not anti‑Walmart. You might want me to be but I’m not.”
I don’t look at Walmart as part of the problem.
I look at Walmart as the natural outcome of the development pattern we have chosen.
If you don’t like Walmart and what it represents and who it is, you should not like the thing that birthed it, the thing that created it, this development pattern we have.
We see today companies like Walmart and McDonalds incredibly savvy. Costco, Home Depot, they’re seeing how cities are changing, how actually, demographically we’re seeing an inversion in our cities and growth in the suburbs has slowed and actually in many places reversed itself and growth in our central cities is taking off.
What you see is that Walmart has come up with neighborhood Walmart and McDonalds has come up with neighborhood McDonalds, and they’re scaled differently, and they’re designed differently. I don’t know if that’s the future or not. It might be, it might not be.
I’m agnostic about Walmart in that sense because, at the end of the day, if Walmart goes away, will we not have toothpaste, will we not have paper towels, we’ll we not have cheap imported plastic things? No, we will likely still have those they will just be delivered in a different way.
To me the form, the pattern of development, does it work for us, is it financially solvent, is a way bigger question than what company actually occupies that store front to deliver the goods and services that we are willing to pay for.
I know we’re getting like, we have to have people all the way out of here in nine minutes. [laughs] One more…
Emcee: We’ll take one more short one.
Audience Member: [We have a lot of cities with smaller towns around them.] How do the smaller communities [respond to this problem]?
Chuck Marohn: You’re going to end with a weeper.
We are in the process of wiping out the majority of our small towns.
Maybe 80 percent of our small towns will no longer — I don’t think will exist 20 years from now.
They’re largely propped up with massive subsidies and they exist today not because there is an economic resource to be exploited or some unique things to them that we cannot exist without them, but they exist because of a lifestyle choice of the people who want to live there.
That’s painful because I live in a small town, I come from a small town, but I look around, the people around me and they have chosen to live there because they like small town life, not because it’s essential that whatever they do be here.
The thing that small towns can do…this is going to sound terrible. I feel like I need an hour to just talk about small towns, but in many cases small towns have this symbiotic relationship with major cities.
Small town existed in this country not because people love small town life, but because there is actually an economic need to live there generated by the big city, there was this back and forth.
We need food so we need people out here who can help the farmers buy processed things and put their tractors together and their plows together and all that, we have to have that because we needed the food.
Now, we don’t need them out there to have the food because we have these huge machines and they are serviced by a truck driving by. It’s a very different model so the people that are there live there because they like it but not because they have to be there. If you are in a small town and you want to be around, I’m not talking about being prosperous, you just want to be around a generation from now, you need to find a way to be useful to the people around you.
You need to start doing what in economics term is called import replacement. How do we stop exporting capital out of our communities and start producing things for ourselves here?
You can start with food, it’s the easiest thing to do.
You can then start with gasoline. You can actually bike instead of drive everywhere. Small towns are small enough to walk the whole thing. You don’t have to have a car to go to two blocks that you’re driving it today, that’s money that you’re not sending out of the community that you’re going to actually spend here.
These are little tiny things that are beneath us as Americans in so many ways, but the towns that can do them will be the ones that stick around, and the towns that don’t will be the ones that have no purpose to live when the tide goes out and the subsidies are no longer there.
That is a really depressing requiem on small towns, but I still live in one, and I love it and I will be sad when there aren’t as many, but I think that that is the economic reality, there is no reason for a lot of these places to exist, and therefore when the subsidies go away they won’t. On that happy note…
One last thing, StrongTowns.org is our website. We publish stuff there all the time. It’s all there free for you to use. It’s Creative Commons licensed, you can take it, erase my name put your name on it and send it to the newspaper, and that’s perfectly legal and fine.
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