Do the Math with $800 Million

Do the Math with $800 Million


Kansas Citians stepped forward recently to support the city we’ve built. By choosing to raise our property taxes, we are taking on the responsibility for fixing our leaking pipes, deteriorating roads and broken sidewalks.

It’s a big step, and the impact could be anywhere from significant to a drop in the bucket.

The amount of new funding will definitely make a difference, but $800 million is only a fraction of the funding needed to adequately maintain the massive network of infrastructure we’ve developed. Our city leaders told us as much during the recent campaign. Even with these additional taxes, the total property tax we pay to maintain our infrastructure is at least five times short of what is needed when you account for the estimated $4 billion dollar price tag to fix the aged combined sewer and stormwater system. It could easily be ten times short, perhaps much more. On balance, our streets, sidewalks and utilities are going to continue to deteriorate faster than we can afford to repair them.

WaterMain

Kansas City is looking at an estimated $4 billion dollar price tag to fix its aged combined sewer and stormwater system (Image credit: Jill Toyoshiba, Kansas City Star http://www.kansascity.com/opinion/readers-opinion/guest-commentary/article145063589.html).

We’re not likely to ever increase our taxes to the amount necessary to maintain the infrastructure we’ve built. The cost is unreasonable. Perhaps had we known 70 years ago the implications of maintaining the expansive development we have since built, we would have reconsidered. However, that ship has sailed. Kansas City is not alone. Every major city in the country is upside down with commitments and liabilities exceeding the resources needed.

Still, we can make a significant impact with this new infrastructure funding if we are strategic.

Every city has areas that can be considered productive, where private properties generate more tax revenue than it costs to provide and maintain the public infrastructure that supports those areas. The Country Club Plaza, parts of downtown, and many of our core neighborhoods are Kansas City examples.

Country Club Plaza KC

The Country Club Plaza is considered one of Kansas City’s more productive areas as it offers a walkable neighborhood, interesting destinations, a lively atmosphere, multiple options for activities, and available, everyday conveniences (Image credit: Gould Evans).

As you might expect, cities also have areas that are effectively money pits, where the cost to construct and maintain streets, utilities and public services exceeds the tax revenue those areas generate. These have traditionally been the areas of lower density, mostly residential development. Historically, the productive areas of cities – at least the cities that have survived – created enough value to underwrite the non-productive areas. Unfortunately, most of what we have built for the past 70 years has been of the lower density type. Even retail areas in low density development patterns appear to generate substantial tax revenue, but when examined on a per-acre basis, their expansive nature and significantly greater infrastructure needs outweigh the revenue they generate.

KCSuburb

When examined on a per-acre basis, the expansive nature and significantly greater infrastructure needs of these residential “money pits” outweigh the revenue they generate (Image credit: Robert Whitman, Gould Evans).

A vast majority of what has been built over the past 70 years has been at the lowest densities in the history of city building. As a result, most of what has been built are the money pits. That’s a primary reason why we’re so upside down in our ability to fund our public infrastructure.

In light of that, how can Kansas City be strategic with our use of these new infrastructure funds?

Let’s do the math. Let’s invest the $800 million in ways that maximize value. In other words, let’s focus on infrastructure improvement dollars in the productive areas of our city. The math is not that difficult.

KC skyline

Strategically reinvesting in the urban core of our city is key to it long term sustainability (Image credit: https://thejigsawpuzzles.com/Street-View/Downtown-Kansas-City-Missouri-jigsaw-puzzle).

It will show the lower density suburban areas, even many of the closer in neighborhoods from the 1930’s and 40’s to be the money pits. The math will also highlight the productive areas, which are more likely than not to be primarily in parts of the city developed more than 70 years ago. In many cities, the math is even showing that poorer, inner city neighborhoods are underwriting the apparently wealthier suburban areas. This is a simple matter of infrastructure efficiency. Before cars allowed us to spread out, cities were more compact, and the intensity of private investment per square foot of infrastructure was much greater. As a result, the productivity (the value of those parts of the city) was much greater.

B&W photos of KC in 1930

Cars have erased the human scale from traditional patterns of city-building, resulting in infrastructure we can’t afford to maintain and places of diminished cultural value (Image credit: http://www.vintag.es/2012/04/old-photos-of-kansas-city-in-1938.html ).

By maximizing the return on our infrastructure investments, we can use the value generated by productive areas of the city to underwrite the under-producing areas. It’s how cities have been built for thousands of years. However, over the last 70 years of expanding our cities with mostly non-productive, extremely low-density, car-based development, we have dramatically increased our infrastructure debt. We need to be strategic and focus our efforts and resources on building a productive city.

Investing rather than just spending these $800 million will be a challenge politically. The need overwhelms the available funds. Strategic investing in the future of Kansas City is more necessary now than ever, and it won’t be adequate. We will still need to be much smarter about the way we build going forward.

WestportDistrict

Strategic investing in the future of Kansas City is more necessary now than ever (Image credit: https://commons.wikimedia.org/wiki/File:Westport_Road_Kansas_City_MO.jpg).

If we do the math and keep doing the math, we can rebuild and continue building a great Kansas City.

-The Kansas City Planning Studio of Gould Evans

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