in this episode of ZacCast, from Fresh Prince to urban development patterns, it's the things that make you reevaluate your entire existence. We dig into some of the more controversial elements of the Strong Towns Movement, including its prescriptions for where we spend the public's money, and how we organize our teams to make the biggest impact. This is ZacCast, episode nine. Here we go. Hey, Patrick.

Hey, Chad.

Hey, so I've been thinking, um, since our last episode, where we were talking about Home Alone. Uh, I mentioned that I had always kind of thought that the, the mom, uh, you know, was involved in seamistry, or... Well, I don't know if that's the right word, but, like, making clothes, right, in some capacity, just 'cause she's- has mannequins all over the house, and, um-

We typically leave making up words to me, by the way, not for you. Seamstry?

Well, I didn't pronunciate it correctly, but yeah.

Enunciate?

Yeah. Uh, so it got me thinking, and I actually had a conversation with my wife about this while we were on vacation a few weeks ago. Um, we were talking about the show The Fresh Prince.

Okay.

Okay?

Fantastic show.

So The Fresh Prince, uh, that name came from, obviously, Will Smith's rapping career, where he was the Fresh Prince and DJ Jazzy Jeff, okay? So it came to my attention that my wife had always thought that the Fresh Prince and DJ Jazzy Jeff were the same person. And so I was like, you know, in, in my very supportive way-

Mm

... like, "There's a guy named Jazz on the show."

Who also happens to be in the band, the, the, like, the real-life group that Fresh Prince was in.

Right, like-

Yes

... he, he gets thrown out of the house, you know, like, every time he's on the show.

Yes.

That's, that's Jazz from- that's Jazzy Jeff. And she was like, "Okay, that's fine."

Didn't bother her a bit.

Totally unfazed.

Did she watch the show?

Oh, yeah, yeah.

Okay.

We both... Yeah, well, we- come on, we're, you know, '90s kids. We grew up watching The Fresh Prince.

Absolutely. Can you lay the track on the ground right now? You can.

I'm not going to, but I could. Uh, I will say this before I move on.

Uh-huh.

The scene where his dad leaves him, that episode where his dad comes back and-

Where Uncle Phil gives him the great hug.

Yes.

Yes.

That scene may be the most powerful, uh, or emotional scene in all of, like, sitcom history.

That's a, that's a big statement. I will give you-

Go back and watch it. That's, like, Oscar-worthy. W- like, from that scene alone, you could tell Will Smith was gonna be a legitimate actor.

Correct, and I, I... First off, I love Will Smith, right? I, I, I, still to this day, I think he's a great actor.

Except in Aladdin. That was a terrible movie.

Really?

Oh, my God.

I thought Aladdin was pretty good.

Oh, it was awful.

Man, we're-

First of all, Will Smith can't sing. Will Smith talks.

That's correct.

He kinda talks on pitch a little bit, but it's a very narrow band.

Okay.

And the songs were so slow that you can't just talk through them. Like, Robin Williams was not a good singer, but he made it work. But they slowed the songs down. They should have sped them up and made them a little bit more hip-hoppy to fit what Will Smith can do, but instead, they slowed them down, and he's talking, and it's, like, all out of pitch, and rough, and not entertaining.

I totally disagree. I thought Aladdin was great. I thought Will Smith did a great job. But anyways, it, it just is what it is. But most importantly, I, I wanna say about that, Will Smith was fantastic in Fresh Prince, don't get me wrong, but the character played by Uncle Phil was timely.

RIP.

It was... Oh, yeah, rest in peace, brother. And it was an important character at the time in the '90s. They addressed some really important topics that probably st- should still be addressed today that we've just forgot about, but that's, that's my two cents on that.

Yeah. Um, the same is also true with The Cosby Show, but for obvious reasons, we can't go there anymore, so-

And we don't talk about The Cosby Show.

Uh, but the broader question is, if I had been- if the roles had been reversed, and I thought the Fresh Prince and Jazzy Jeff were the same person for 25-plus years, and then I just found out that that was not true, I think that would've, like, totally shattered my worldview to some degree.

Whereas your, your wife just, like-

She just shrugged it off

... shrugged it off and looked. I'm more like you. I'd- something like that, where it was like, I always thought it was something, and it's, it's like a respected part of my life, I would've had... It would've been a fabric tear for me.

Yeah, so, like, when I found out, which I'm not still sure if it's true or not, but that Hootie and the Blowfish may actually be... Hootie is the band and the Blowfish is Darius Rucker. Like, that didn't, that wasn't a huge deal, 'cause whatever. But w- so I can give you an example. Um, my brother, who I have to also thank, because he helped me with some, uh, some stuff for this podcast, uh, testing out some new technology for these remote interviews, 'cause we had that issue with Skype, and the audio quality wasn't great. So, uh, so-

Sor- sorry, Robert Hannah.

Um, but he, he was relaying this story to me where, uh, he was recently eating a sandwich, and he thought to himself, "I, I don't really wanna eat this crust." So he was gonna cut the crust off, but then he thought to himself, "But that's where all the nutrients are," which is something that my mom used to tell us growing up. It's probably not true. Like, the-

It's not, it's not true

... it's the same. It's just the part that's, you know, burned from baking it.

It just ha- it just happens to be the crispy outside of the bread.

Yes, but-

Do you feel violated, like, mentally violated by your mother on this one?

Well, I never thought of it.

Okay.

Um, but, like, yeah, that struck him like, "Come on, Mom."

That's outstanding.

I brought that up to her. She didn't even remember ever saying that to us. But, um, I, I have a feeling, though, that that's one reason why I am the only person I know who will eat the heel of the bread.

Yeah, my mom claims she never spanked me. Like, that's a legitimate claim.

You probably sure that you were spanked.

I, I got spanked. Don't worry. Yeah. So, but that's a legitimate claim in my house.

Okay, well, with that out of my system, I wanna talk to you about an aspect of the Strong Towns Movement.

... and the Strong Towns book that just came out as well.

Yes.

Yeah.

Yeah, so we have touched on it a lot. There's a, there's a ton to go through that we could never do in a 30-minute podcast. Um, we've talked a little bit in the past about, uh, the general idea that sort of brought forth the Strong Towns movement, which is that the way that we're developing is not sustainable. This, um, the suburban sprawl, the auto-oriented development is a total 180-degree shift from the way that humans have built cities for thousands and thousands of years, and it's come about over the course of a 70-year period. Um, so whether you think it's good or not, there's no doubting that it has been abrupt. It's been an abrupt shift-

Yeah

... in the way that we built places.

No, no doubt. Absolutely.

Um, so there are a lot of prescriptions that they offer in terms of development style and infrastructure, you know, public versus private investment ratios and things like that. I don't know that we need to get to those right now. Um, certainly they've come up, you know, in our discussions, and I'm sure we'll talk about them in the future. But the one thing I think that we would have probably the most interesting conversation on is the prescription for actually taking action, not just approving or denying or, uh, modifying future development or, you know, not building any more roads or anything like that, but, um, what do you do with the money that you have today? And what Strong Towns recommends is taking your non-operational budget, you know, you can include, you know, normal, uh, O&M for repairs and maintenance of streets and water and things like that, but also your CIP budget.

Mm-hmm.

Dividing it into about, you know, 90% geared towards just maintenance. So look at the areas of your city that have the, the highest value per acre, basically the most financially productive parts of your city.

Based on whatever your revenue sources are.

Right, which is gonna be property tax, sales tax, you know-

Water

... water

sewer

... sewer.

Everything. It's an all-in equation.

Yeah. In, in almost all cases, this is gonna be your older parts of town, um, your non-big box places, you know, your, your, your smaller setbacks, uh-

Your more grid format development-

Yes

... areas.

Yes, things where you have more density, you know, more stuff packed in with fewer, um, with less infrastructure required to serve them.

Yes.

Okay. That may not be the case for everyone, um, but in most cases, it, it'll be s- it'll be in your older areas of the city.

It's a simple equation, but less flashy.

Yes.

Yeah.

So take the bulk of your maintenance dollars and put them into repairing and replacing the infrastructure that you have in those highly productive areas. Create a virtuous cycle where your reinvestment prompts private reinvestment, right? Um, in those areas that are already the most productive, and then taking the rest of your, your, your available money and doing what they call little bets. So go out into the field and actually mingle with the people that you're serving. Uh, talk to them about the things that they're struggling with on a day-to-day basis, just living in your city, and then do the next smallest thing that you can do today. So no matter what it is, the next smallest thing that you can do right now to address that problem, not necessarily fix it, but just to address it. Uh, and so, so to do this, they recommend breaking down sort of the, the expertise-based silos that we have, you know, with the planning departments and street departments and parks departments and things like that. 'Cause, you know, parks departments have this- their strategic plan of we wanna build parks, and that's great, but, like, w- where are you building parks, and how does that relate to everything else in the city? So-

Yeah, there's, there's no- there's never an overall view when you're siloed like that, of how each silo is actually impacting the overall bottom line, or as, as, like a private developer would call it, a pro forma of the city, right?

Right. And so if the goal of cities is, is fundamentally to continue existing by building wealth in your community-

Correct. Building wealth for people, not for the government.

Yes.

Mm-hmm.

Yeah, so obviously, parks, libraries, you know, these things can have a, have a role in it, sure, because, you know, you're, you're investing in the community and making it more valuable. You're potentially raising land values. You know, there's an argument for it. Um-

There is an argument for it, but it may not be as much value as people tend to think it is.

But the idea is, instead of having everyone grouped by what they do, create teams based on where they're doing it. So have a planning person and some street people and parks people and police and whatever else, that are trying to solve these problems or address these issues geographically, but they're in small teams, and they're empowered to actually go do things. Um, the challenge here is there's a normal process that we have in cities to try new things and get things done, right? And people aren't necessarily empowered to just go do something.

It's long, it has lots of tape colored red, and it is very difficult. You know, cities move like big aircraft carriers, not very fast.

So when you have... I mean, when you have zoning codes, and you have development styles, and you have all these other things that are kind of limiting your freedom to-

And you have a ton-

... try things

of public committees, too. I mean, don't forget the public process as well. It takes a very, very long time to get through.

So what is your general take on, on that approach?

I, I... You know, I would agree... The biggest thing that I would agree with is how we invest our money. I don't think cities right now focus on where money's being made or how money's being made and where wealth is being created and how our investment actually impacts that. We have performance measures for how our services do, you know, how successful are our services from a satisfaction standpoint, but we, we currently probably do a very poor job of measuring the, the wealth creation that occurs. So if a city is gonna go in and invest in something, we should look at what the private level investment's gonna be, and, and we should see a return on that investment. Um, now, arguably, a lot of people are gonna talk about what should that return be at the end of the day, uh, and this, you know-

Do you think, do you think cities should-... focus on creating profits?

I don't think cities are nonprofits because I don't think they can ever get ahead of the curve, right? They, they have to focus on being able to make money on developments. Because if you, if you take the other side or the other approaches, it- once you build a road, that road actually costs you money in the long run, right? Its, its, its value's not really depreciating, it's both depreciating and i- increasing your expenses at the same time. You have to be profitable in order to keep up that expense rise that's gonna occur over time. So, um, you know, and that's getting really into the weeds over how that's gonna work, but, um, I, I agree that you should be investing in those areas and not necessarily in the new shiny things that may be sprawling at the edges of your community, right? You should try to go after incremental change that occurs in the interior of your community. If you can develop and increase wealth and make additional revenue for the city by not actually building a new road, that's huge. Why, why don't we- why don't we try to do that more often? And the reason is 'cause we've just never... Until the Strong Towns decision, gotta give those guys some credit, right? Until that discussion was had, nobody really even talked about a return on investment for the public infrastructure side. It was just, "We need a road, we build a road. Residents demand an extra lane, we put in an extra lane." We need to think past that, and I, I- that conversation's happening. And let me give you just a quick example of where that conversation is happening, just to s- to see how far this has gone and how quickly this movement has, has changed our communities. The Regional Transportation Council for North Texas, so for all of DFW, Dallas-Fort Worth, the whole region, I wanna say it's, like, 14 counties. It's huge, right? They control all the transportation dollars in that 14-county region, both federal and state, right? At their meeting last week, they gave every board member on the RTC a Strong Towns book.

Really?

Yes. Just think that through. An organization that is full of engineers, and public works officials, and elected officials in the fastest-growing- one of the fastest-growing areas in the United States when it comes to sprawl, just got a book to tell them to stop doing sprawl. I mean, just... That, that's a, that's a huge statement that we're seeing. So back to what we're looking at here, the 90% part is there. The, the, the small project thing, that's the one where I struggle with it the most, right?

That's why I wanted to talk about it, 'cause I figured you'd have, you'd have the biggest concerns about how that would actually be implemented. Now, in Hudson Oaks, for example, um-

We're not siloed, that's the biggest thing.

It's a small town. W- everyone is involved in everything.

Everyone.

So, like, we kind of already operate that way.

Mm-hmm.

Um, but when you get into a bigger s- town, even if, you know, 25,000, 30,000, you're, you're gonna have much stronger hierarchy that's dictating how far out of the box you can go.

And, and that... Y- not only that, but that comes down to empowering decision-makers i- in those large communities as well. It's very difficult to get anybody to say yes or say no in a process in a larger town, because they're not necessarily empowered to do that. Um, but I, I, I totally agree on localizing the decision-making. You know, getting rid of your silos and maybe becoming decision-makers, uh, based on, uh, areas of your town or, or specific communities within the community. That's a great idea, and, and would really change the trust relationship that we have problems with, that social media clearly says, and if you read Nextdoor, it clearly says we have. Nobody trusts their local government. If we would get out of our silos and, and really become a part of our small communities, we, we could build that trust over time. My issue comes down to, on the small projects, you're really looking at, like, the mental pain and suffering of the folks that live in that area, right? So when we're looking at a small project, if somebody says, you know, uh, "We need a crosswalk here 'cause it, it, it takes a lot for my kid and I to walk down the street," sometimes you end up doing a lot of small pet projects and actually costing yourself some money in the long run. There just needs to be a system set up to know, you know, "Hey, why are we doing these projects, and how are these projects going to benefit people in the long run?" And, uh, I just- I struggle with... I, I struggle with those, like, small, pointed-out proj- I, I can't even get the words out. I'm sorry. It's, it's... I just don't know if you have enough benefit to actually be noticeable, if people actually will feel like their tax dollars are being spent wisely within the small projects.

Well, if you want people to think that their tax dollars are being spent, you can build all kinds of very big things that are gonna put you in an even worse, you know, financial position, right?

Which a lot of communities do, and I'm not, I'm not saying that that's a great idea either. Um-

So the, the argument is that you would actually get out into the community. It's, it's not an overnight process. It's, it's... I'm literally going out and talking to people, and it's like the, you know, switching to a community policing model, where you're actually getting to know the people in the community, going out with them in their day-to-day lives.

Okay, got that.

It may not be an, it may not be an 8:00 to 5:00 thing, 'cause some people are not, you know, in the city during the day. So it's, it's really getting out in the community and learning, um, through a very extensive sort of investigation process, what's going on, where are people struggling with certain things.

Sometimes when a resident has a question, you actually have to go sit at their dinner table, right? They may not be able to make it to your office. You may have to go sit down and have that conversation with them. So I, I get that. I, I get that we're trying to go out there and be more localized, and I think that's a great idea. My, my question comes down to the small investments of the projects, right? It's, it's a, um... It, it's instead of going out and spending a large lump sum, it's trying to find lots of little, small, incremental change that would improve people's day of li- you know, way of life, and, uh, you know, whether that's actually gonna have an impact on the taxpayer.

So what if you're walking down the street with someone and there's some overhanging, you know, brush?... right? You probably would never notice that, and maybe someone will complain about it, but if you're actually walking it, and you can notice that this is causing an obstruction for pedestrian traffic, you can get out there and just trim it up, you know, that day.

Uh, a- agreed.

Right? So these are-

Yeah

... these are small things that you don't- they don't have to go th- into a queue, and, uh, you know, get prioritized with everything else that, that you have to do. Because instead of focusing on the city as a whole, you've organized these teams that are focused on a specific geography.

Well, I mean, why, why does, why does the street running to City Hall not have potholes on it?

Because it's where the city employees drive every day.

It's where the, the city employees are on that road every day, right? So localizing it makes a lot of sense. Like, if, if I'm walking on a sidewalk and I see those branches, I'm gonna cut them 'cause I at least saw them. I don't think city employees see something and then purposely don't take care of it, right? Um, but this goes back to the- the big question that I have, Chad, is, is that what projects are you doing at a small level that have an impact on the whole population of that community, of that small community, but of that population? I think the danger in, in what they talk about in Strong Towns with that is, is that you end up appeasing the few people who are vocal within that community, and you're not really s- connecting yourself with the other 80% that would be there. And that, that happens in every town. You know, uh, if you look at elections, you're gonna have a turnout of 8 to 15% or something like that, and so you try to go just appease those people that are there, but the reality is you still have 80% of your population that didn't vote. Now, they should vote, but they didn't, and they may have a different opinion over what that issue, uh, does, and until you poke the bear, you really never know.

Okay, so we've got time for one more-

Okay

... topic, uh, 'cause you've gotta run, but I'm gonna let you pick.

Okay.

Okay. One is, with, you know, 90% of your, of your maintenance and CIP budget dedicated towards re- repair and rehab of your most productive areas, is it going to necessarily mean that we may have to give up this idea that we have that we can maintain everything that we have, okay?

Okay.

So that's one. The second one is, we build our new developments to essentially a finished state. You know, you're, you're building all the roads, all the infrastructure, and the, all the houses that you, that you plan, and they're all done. And so maybe the value is appreciating over time, 'cause land tends to appreciate over time, property does, but the infrastructure is all aging. It's never going to be expanded to, to enhance the value and productivity of that area more than just your normal appreciation of real estate, right? So Strong Towns recommends allowing every property to incrementally go to the next level of development by right.

Okay.

Like, the next level of density. Not beyond that, but just to the next one, so that, so the communities can adapt and evolve over time, as opposed to being built to, "This is the way that it's gonna be done, and this is it, and this is that way forever."

So you have to throw out a couple things right away.

A lot of things.

A lot of things, right? Um, let's just talk, like, that there's a bunch of planners on the end of this podcast, right? Parking requirements, you gotta throw that out.

To be fair, Strong Towns does recommend not having parking requirements.

That's correct, yes. I mean, so you've gotta start throwing out the things that, uh, you know, that with... That, that really don't allow development to change or become more dense. Um, you, on the utility side, you have to throw out the mindset of, "The developer's gonna come in and look at this, and we are gonna make you build to the maximum build-out of this development possibility over, like, 50 years," right? "And so we're gonna make you upgrade all of our infrastructure at every lift station and every sewer line that may come in there." That mindset from the public utility folks is going to have to change. Think of how many 10-inch sewer lines we tear out because the developer is going to need a 12-inch sewer line 50 years down the road, and that infrastructure may actually... It, it, it's fully depreciated in 50 years, so why are we tearing out that 10-inch line? Um, there's a mentality change there, 'cause everybody is always scared about, that development may take all the capacity we have, or, you know, we, we-

Trying to project into the future what's gonna happen, instead of just a straight line trend.

Trying to project into the future... Yeah, yeah, and it's just, it's-

Instead of just letting things happen incrementally and building a community that grows and adapts on its own.

We, we take a linear extrapolation of what it's gonna be, and then we, we look at that, and that slows down specifically redevelopment, right? Taking a one-story building to a two-story building, or a two-story to a three-story, or whatever it may be.

It raises the cost of entry so much that unless you have a lot of money to burn, you can't pr- advance to that next step.

It, it totally discourages the redevelopment cycle of the property because the barrier of entry is so high. And so all of that has to get tossed out of the window, and, and I, I do agree from a standpoint of what Strong Towns is pushing, why do these things matter? I mean, really, why do they matter?

The argument that you're gonna get is, "I'm getting a duplex on the house next to me, that's gonna lower my property values."

Does it actually have a negative impact on property values?

I have not done the research on that. I-

No, no, but I, I mean, there is a way to do that math. I think that's a little different, right? Um, and, and I mean, that's a, that's an interesting example, like, it's a single-family neighborhood, and the single-family neighborhood is, you know, it's gonna get a little denser towards the front or closer to the highway. Uh, we've had some of that in Hudson Oaks, to be fair. You know, we've got an area that was built in 1955 that's transitioning to commercial property, but you can't tell me that those single-family homeowners that bought those houses or were on the appraisal rolls... When we started this process, some of those houses were on the appraisal rolls for, like, $90,000, and now that dirt is selling for $10 a foot. So you're- you've got a $90,000 house that's now selling for $410,000. You're never gonna be able to prove to me that the redevelopment cycle didn't create wealth, which is exactly what Strong Towns is trying to tell us to do, is you use these cycles and this, this change, or the ability to change, and be entitled to change without the barriers of entry, like more parking and a bigger water line or, you know, uh, a, a redevelopment of an asphalt street to a concrete street, or whatever that may be, right? Or the big one, curb and gutter, that has to occur right away. You always have to have curb and gutter. Um, y- you, yeah-... those things will pay for themselves over time. The development will generate enough to get there. And I think what Strong Towns is, is trying to tell us to do is that maybe the development has to get there before the infrastructure catches up all the time.

Well, the other thing is, too, if you develop incrementally, then you're reusing existing infrastructure, right? You're only-

Absolutely

... in- you're only incrementally increasing the infrastructure that you have to maintain o- o- uh, over and above what you have today, versus a, a greenfield development is all new streets, all new pipes, all new everything, right? So if you're only having to upgrade from an eight-inch to a 10-inch line to serve twice as many people, like, that's a huge win.

Yeah. So I- I'm gonna give you one quick example of this, and, and it's a huge example of, of just development that occurred. But, um, a large city in the state of Texas just built a brand-new arena. It's a beautiful, brand-new arena, and there used to be a two-lane road that went to this new arena, and the city came in and said, "That needs to be four lanes." Well, other than the fact of the 300 events a year that that arena has, right, mostly on the weekends, so, you know, it's having multiple events on Saturday and Sunday, but other than those events, they're not gonna need four lanes on that road. So the thought process is, is, is, is why not just add one lane to it and then contraflow two out? If you need two in and two out, just contraflow them back and forth, get that done. And, and to be fair, I, I believe Arlington actually did that on Division, right? Uh, where Cowboy Stadium is, that was done on Division. Uh, and, and, you know, as much as that is a sprawl community, they, they actually thought that through. They didn't wanna have to build a huge road just to get people out once a week for Cowboys games.

Right. Well, eight, eight times a, a year.

Correct. But that's-

Unless they make the playoffs.

Yeah, unless they make the playoffs. But in the, in the example of this arena, that's two miles of road, most likely, and an whole additional lane mile. So on a concrete street, that's a little over $2 million of additional cost that has to be recovered by all this development down there.

That also makes it a lot less walkable.

It's a lot less walkable.

In an area where it could benefit from walkability.

In an area that has a lot of density, and it's a beautiful area, uh, but there was just... You know, at the end of the day, I don't think this was a bad decision from a standpoint of the, of the employees of the city. I think they were thinking it was the correct decision, right? Uh, but nobody ran any financial implication of what the actual impact of this road was gonna be versus the creation of the wealth that it was gonna have, and sometimes we just need to put a pro forma on a table and run those numbers.

Well, we've barely touched the surface, but I think that you can quickly see why, why, A, the Strong Towns movement has grown so much, it's because it's really interesting ideas-

Mm-hmm

... and, B, why it's so controversial. It's not a, an overnight fix. It's like a mindset shift. You have to really think about things differently, and you have to allow a bit more chaos almost in your community de- community development. Like, things have to be more adaptable and subject to change so that you can kind of roll with the punches over time. Um, it's, it's a lot, it's a lot different than how we have been brought up to see city management and city planning.

Well, not only that, that's why cities have to be profitable, because if we are going to take a little bit more risk in the development process to allow these things to happen in an entitled state, we need to be able to be profitable so that we can come in and make investment in that area to continue that wealth development over time. So just to kind of wrap that up, that's why that's important that cities are profitable.

All right, Pat, been a lot of fun.

Thanks, Chad. Appreciate it.

We'll see you all next time.

All right.

Thank you so much for listening to the show. If you have enjoyed ZacCast, we would love for you to give us a review on iTunes. It would help us out quite a bit. And if you have anything that you want us to discuss, please, please send us an email at cast@zactax.com. Thanks, we'll see you soon.