Lafayette: a case study in ‘temporal discounting’

by Walter Pierce

The Hub City is held up as an exemplar of awful planning.

The skeleton in our closet is named Sprawl, and he’s jangling his bones all over present-day Lafayette. It’s been nearly two years since a team of urban-planning consultants was hired by Lafayette Consolidated Government in conjunction with PlanLafayette and the Unified Development Code to figure out what the parish’s real infrastructure liability is in relation to our tax base. In May of 2014, after weeks of studying Lafayette Parish’s infrastructure and government, the consultants delivered a sobering report, the Return on Infrastructure Investment.

Today, 20 months out, the lead consultant of that presentation, Strong Towns founder and President Chuck Marohn, is still holding Lafayette up as an example of how poor urban planning leads to fiscal crisis. In a blog posted today at the Strong Towns website, Marohn points out that, as unique Lafayette is in so many ways, it is utterly unremarkable in how it undertook growth and expansion for much of the 20th century. Marohn uses the term “temporal discounting” — valuing pleasure today while discounting the future pain it will cause. In Lafayette’s case, the pleasure was robust economic activity and prosperity unleashed by embracing sprawl while ignoring the reality that all those far-flung roads and other infrastructure would need to be maintained.

Marohn writes:

The median house in Lafayette costs roughly $150,000. A family living in this house would currently pay about $1,500 per year in taxes to the local government of which 10%, approximately $150, goes to maintenance of infrastructure (more is paid to the schools and regional government). A fraction of that $150 – it varies by year – is spent on actual pavement.

To maintain just the roads and drainage systems that have already been built, the family in that median house would need to have their taxes increase by $3,300 per year. That assumes no new roads are built and existing roadways are not widened or substantively improved. That is $3,300 in additional local taxes just to tread water.

That does not include underground utilities – sewer and water – or major facilities such as treatment plants, water towers and public buildings. Using ratios we’ve experienced from other communities, it is likely that the total infrastructure revenue gap for that median home is closer to $8,000 per year.

The median household income in Lafayette is $41,000. With the wealth that has been created by all this infrastructure investment, a median family living in the median house would need to have their city taxes go from $1,500 per year to $9,200 per year. To just take care of what they now have, one out of every five dollars this family makes would need to go to fixing roads, ditches and pipes.

Read the full blog here.