small business, not homeownership

Many organizations and governments are again touting homeownership as the path to economic security and wealth creation. I have my doubts. The wealth generated for people who own homes is not wealth out of thin air, nor is it wealth out of moral superiority. It is wealth out of exclusion and externalized costs. Every day, the gap among homeowners, and renters, and unhoused people grows, and the structure of wealth accumulation depends upon this gap.

As we, as a society, come to realize that we cannot continue to subsidize single family homes and their development pattern that requires large amounts of infrastructure, huge amounts of driving, and an impoverishment of cities, the single family home will lose value. This is hard to believe, given the exponential increase in home prices, but it will happen. As has been said by many others, the suburbs will largely collapse of their own weight, of their permanent debt burden. See growth ponzi scheme. Some will survive by changing their form and becoming small towns within the bigger city, but most will not. Detroit is the fate of most suburbs.

So, when the reckoning comes, and the American dream of homeownership comes to an ignominious end, what then is the alternative?

I’d like to propose small business ownership as a better model. No, I have no illusions that small business ownership is easy, or that it is any quick path to wealth. The business owners I talk to would find this laughable. But the wealth that is gradually accumulated is real wealth for the owner and real wealth for the community. It does not need subsidized infrastructure. It does not need an expensive transportation system and associated harms. It may need a small boost from the government, at times, but largely it survives and thrives by being part of an ecosystem of a healthy (and wealthy) community.

Some people claim that homeownership is the way to erase the disparity in wealth between white people and people of color. I’ll let the people of color speak for themselves, but for me, nothing about the current system or the proposed system of widespread homeownership looks likely to erase the gap. In fact, though it may bring a few people from the renter category into the homeowner category, it will very likely cast the rest downward into struggling renters and unhoused. If the government spends money to increase homeownership, as seems the politically preferable action these days, what then of the unhoused? What then of renters? What then of people who live in substandard and deteriorating housing, whether they own it or rent it?

I believe that government should stop subsidizing, and stop promoting large developments and large businesses. Large developments and large businesses seek government support in order to make what they do more profitable, but it is at the expense of the rest of us. This is nowhere more clear than in our transportation system, which was designed, and continues to be designed, to support large corporations and large shopping areas (malls), to make possible long distance commuting which is necessary when we separate single homes from work, shopping and recreation, and which destroys both the general environment on which we depend and the local communities that suffer from this system.

All efforts should instead be focused on small businesses. What do they need to succeed? What small government actions would support them? In this, I am completely aligned with the Strong Towns message:

time to get off the infrastructure treadmill

Hwy 50 slide, @kellyinmedia
Hwy 50 slide, @kellyinmedia

With the recent storm damage to roadways, as well as some transit and rail lines, the governor has proposed about $600M in quick fixes. This adds on to $59B deferred maintenance on state highways, and $78B on local roads (the actual local roads number is likely much, much higher). Pretty soon, we’re talking real money.

I am not opposed to fixing storm damage, or to keeping roads in a state of good repair, abbreviated SOGR and often called “fix-it-first.” However, if it isn’t obvious by now, let me clearly state that we already have more infrastructure than we can ever afford to maintain. Even without climate change, we probably could not keep up, and with climate change, we don’t have a chance.

We have a transportation system built on the idea that someday there will be enough money, our kids will be richer, the economy will be better, the federal government will offer an infrastructure windfall, a fairy godmother will wave her wand. It’s not going to happen. The bills are already coming due, and there will be far greater bills coming due in the near future. Politicians, and the voters who support them, have been running a growth ponzi scheme (see https://www.strongtowns.org/journal/2009/2/3/the-small-town-ponzi-scheme.html and other Strong Towns references), gathering the political and economic benefits today while putting the costs off to the future.

So, what to do? Well, first, stop digging the hole. We don’t need any new roads or highways, or additional lane miles. We do need to make the ones we have more efficient (defined as the number of people moved per hour per dollar, NOT the number of vehicles moved per hour per dollar), and on the whole, we do need to keep them repaired.

But we also need to realize that we have already overbuilt, and we are going to need to let go of some of it. Return rural roads and residential-only streets to gravel (bicyclists, get your mountain bikes). Stop paving parking lanes to the same high standards we use for the travel lanes, and in many cases, let them return to gravel as well. Or just remove some of them – we don’t need as many cars, either. Where sidewalks are needed and don’t exist, don’t take them out of people’s property, but out of the existing roadway. Where roads have been built wider than will ever be needed, take the extra width out and sell it off, with adjacent property owners getting first right of refusal. If there is no market, then give it away to the adjacent property owner. In suburban Sacramento county, there are streets that go from narrow two lane to four lane to extra-wide four lane and then back down again. These are safety hazards and maintenance nightmares. Let’s put this wasted road space back to productive use.

Katy Freeway (I-10) Texas; By Socrate76 - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=7444029
Katy Freeway (I-10) Texas; By Socrate76 – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=7444029

Freeways are the next big thing to reduce. The major Interstates are economically critical for freight movement and to a lesser degree people movement (though quality rail can take much of the pressure off). But they’ve gone from two lanes per direction to four to six to eight to ten, with Texas holding the record, I believe, at thirteen lanes per direction (in the U.S. at least). What are all the extra lanes for? Mostly commuters, and for about two hours a day. People who have been allowed and encouraged to live a long way from where they work, just to save on housing costs. But the bill has been paid by all of us, private car commuters or not, and we have only just begun to pay this bill. It may be larger than our entire economy. So, let’s shrink the Interstates back down, in most cases to two lanes per direction. The other freeways? Most of them are not needed at all and can be removed in favor of surface streets with a restored street grid. People will adjust over time, make different decisions, and it will take long enough to accomplish that it won’t be a sudden shock.

There is no better time than a crisis to re-think our transportation system. If we don’t think now, we will go back to sleep and assume that it is all going to work out, somehow, someday, some fairy godmother.

Each of these ideas deserves exploration, and I will do that as I can.