Urban Development Maverick Chuck Marohn of StrongTowns.Org Visits Arizona, & Chats with BlogForArizona

One of the public intellectuals (though I suspect Chuck might scoff a bit at that label) whom I admire greatly these days is Mr. Chuck Marohn. I have a great deal of appreciation for his counter-to-conventional-wisdom insights into the many mistakes America has made in building our infrastructure, planning our urban development, and financing our local governments since WWII. He is a transportation engineer by training and experience, but by temperament, he’s a maverick and a disruptor.

Chuck founded a small non-profit at StrongTowns.org that started with just a blog and a few videos on YouTube, and has grown into an international movement to rethink some of the foundational assumptions about the development, design, transportation, and financing of our urban spaces. He has – thus far – published two books (in a proposed five-book series) on these topics: Strong Towns and Confessions of a Recovering Engineer – the latter book being the one he is touring for right now. He’s currently working on the next installment in the series, which will focus on the housing market, how it went wrong in America, and how to get back to a focus on housing people affordably in great prosperous neighborhoods.

With the passage of a historic trillion-dollar-plus infrastructure package by Democrats in Congress (WOOOO! Go Team!), we will be making a generational investment in our infrastructure over the coming decade. It is, therefore, urgent that we think hard and discuss deeply how best to use that money. Do we double down on some of the bad practices and failed approaches of the past decades, or do we take this chance to rethink how best to invest this money to make our communities safer, more prosperous, and more efficient? I think we have a lot of discussing to do, and Chuck’s ideas are a great catalyst.

I caught his presentation in Tucson on Tuesday evening, and with his permission, recorded it and present it here. The organizations who arranged his visit, including Supervisor Matt Heinz, Living Streets Alliance, Rio Neuvo, and SALC, live-streamed the event and posted it on the MSA Annex YouTube channel, but I prefer my own recording of the event.

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The next day, Chuck did a curbside presentation at the University of Arizona on the thesis underlying his first book, Strong Towns, about the fundamental financial weakness of the post-WWII car-centric development pattern of our cities. It will be available via Zoom for the next 3 months. I suggest you watch that, too, if these subjects interest you.

Chuck kindly spent some time talking with me, after his presentation and book signing, discussing some questions I had, despite being exhausted and jet-lagged.

The video of that discussion did not record properly (due to my own personal and systematic exploration of every single way that I possibly can screw up recording video interviews), but I’ll do my best to convey the essence of our conversation and represent Chuck’s views faithfully.

My questions centered on two topics raised by his talk, but not addressed in the audience questions he answered: how to get local governments to prioritize the sorts of investments Chuck suggested during his talk (funding immediate needs and cheap, community-driven projects), and; how to change the way we build housing to get the sort of low-cost and improvable housing and ‘thicker’ mixed-use development he would like to see.

I asked Chuck if he thought that participatory budgeting (PB) could be a tool for getting local government to fund those immediate needs and community-driven investments. Chuck said he was familiar with the concept, but was skeptical of it, indicating he had an abiding faith in and respect for representative government as the best way to prioritize public spending.

I have to disagree with Chuck here and suspect that he may not have given much study to how such systems of direct democracy of this sort work in practice. PB, also called community-based budgeting, usually reserves some percentage of local government spending to be allocated according to direct community input. This generally involves facilitated identification and prioritization of that spending through an ongoing process of community engagement.

When PB is well-structured and managed, discrete community groups and locations are represented by dozens, or even hundreds, of citizens participating, providing granular, information-rich, and local input from deeper in the community than is possible via an electoral mechanism. Self-selection and volunteerism take the place of a typical representative process.

I think PB is the perfect approach for identifying the dead-simple, obvious, low-hanging fruit and small, quick investments that Chuck would like to see our local governments making, and for by-passing the sclerotic and bureaucratized systems of local government that Chuck bemoans in his talk, even if Chuck doesn’t embrace it himself.

I asked Chuck about how to re-incentivize and restructure housing development to prevent the construction of vast tracts of car-dependent, static, and unproductive single-family suburban residential housing he identifies as being the root of much of our current problems. I suggested that perhaps changes to zoning or building codes could help, such as abolishing single-family residential zoning or mandating accessory dwellings, or mixed-use requirements. Chuck took issue with some of the hidden assumptions foundational to my question.

Chuck indicated that he felt the problems with housing are much deeper than just changing local building codes, or encouraging mixed-use development, or other such pressures on a fundamentally flawed system. He surprised me when he opined that the home-building industry itself is much of the problem. He thinks that a major underlying issue is that the home-building industry has become financialized to such an extent that housing, per se, is no longer the real product: the real product is the mortgages that can be securitized, built into financial instruments, and sold into the financial sector. The home building market, therefore, fails to respond to real people’s needs for housing and instead focuses on creating a static, uniform, and ultimately perishable product most suitable to financialization, not best suited to living, growing, and prosperous families and communities.

Chuck indicated in his talk that a major problem is that contemporary homes start out far too expensive for many potential entrants into the market, and then cannot be easily upgraded and their use modified over time. He cited the need for a greatly expanded succession of use by right in his talk. Essentially, the regulatory burden imposed by typical zoning and building codes prevents the addition of accessory residential or commercial units, even when such uses would not create nuisances or externalities. Part of the resistance to such a liberal approach, in my view, and one that is probably shared by Chuck, is the strong political pressure to ensure that single-family dwellings remain easily commodifiable and thus conform to the needs of the financial markets.

I pointed out that macroeconomic market structures are far outside of the authority of local governments to change, and Chuck agreed. I suggested that one major problem was banking regulation that allowed mortgage originators to quickly move those loans off their books by immediately reselling them instead of having to keep them on their balance sheets. Chuck agreed that this was so. The suggestion of such a major national policy change would provoke enormous political and financial resistance from some of the largest financial players in our economy. Chuck rightly pointed out that our housing economy is, in large part, the foundation of our real economy. Everything depends on it as it is the heart and soul of the financial wealth and savings of the average family. Yet, our housing market is not focused on the needs and wants of those families that live in the housing, but on distant financial interests and national and international markets. That’s a pretty fundamental problem in our economy.

So how can we start to turn that around and foster the sort of housing future that Chuck would like to see? Well, that’s the subject of his next book!

We did briefly discuss the idea of state-based banking, a concept that our own Pamela Powers-Hanley has long championed here in Arizona. Basically, a state-owned bank can be more responsive and open to community goals and priorities and would keep investments in housing and businesses as assets to reinvest into the community, rather than turn them into financial instruments for trade in the money markets. Chuck was very much in favor of it and revealed that Doug Burgum, the Republican governor of North Dakota is a good friend of his, and joked that the “socialist utopia” of North Dakota, which owns its own bank, should certainly be a model for others.

In the end, Chuck left me a little surprised that he had such a wide-ranging and deep political and financial reform program in his sights. Chuck is a Republican and a staunch capitalist, not a starry-eyed liberal dreamer, but he sees many of the same problems in our largest “market” systems as we liberal critics do: a lack of competition; distorted and artificially-inflated market participants fueled by monopolistic and monopsonist practice; too-big-to-fail banks and other financial companies; and too much hot money in a housing market that should be local and patient, not global and turning on a dime as it did in the trainwreck of 2008.

Chuck Marohn is a thinker to watch. I look forward to his next three books and hope that his ideas will find purchase in the ossified and blinkered thinking of our political class, especially among his fellow Republicans. If he can move the needle toward housing, transportation, and infrastructure systems that are more responsive to humans, families, and communities than to the needs and priorities of giant financial institutions and massive corporations, we might stand a chance at instituting some of the needed changes in our political economy that our current politics now largely prevent.