Selections from Strong Towns

Chuck Marohn Charles Strong Towns photo
Image from strongtowns.org

This work, “Selections from Strong Towns”, is a derivative of the following works by Strong Towns:

These works, and the image of Chuck Marohn above, are available under Creative Commons Attribution-ShareAlike 3.0 Unported (CC BY-SA 3.0).

“Selections from Strong Towns” is also available under this license (CC BY-SA 3.0).

Introduction

Chuck Marohn, who is the founder of Strong Towns, has worked for better urban places since 2009. I often turn to his principles.

I read some of Chuck’s articles to make a resource of ideas from Strong Towns. Now, I can come here to refresh my mind.

So, here are my edited selections from the work of Strong Towns.

Traditional community development

The frontier town was a collection of shacks along a dirt street. It had little private investment, and it had even less public investment. It was a little bet.

Many cities don’t grow beyond a little bet, because they fail before they get started. However, those that endure all grow incrementally.

Traditional Community Development: Private investment before public. Growing community wealth is the goal.

Modern Community Development: Public investment before private. Having more total transactions is the goal.

The resource trap vs. strong towns

We all want a prosperous place: one where our work makes life better for our families and the next generation. And we wonder, “Do our kids have enough of a future here to stick around, or will they leave?”

In a resource trap, the community is a cost to be reduced.

In a strong town, the community is where we grow our wealth.

Incremental investment

The Strong Towns approach to building wealth relies on investing incrementally and on adapting.

  • Rely on little bets, not huge projects.
  • Go for resiliency, not simply efficiency.
  • Use bottom-up action, not top-down systems.
  • Build to the scale of a human instead of a car, and live life at a personal scale.
  • Always do the math. Local governments budget year-to-year, and they tend to be casual about debt.
  • Focus on reducing debts and liabilities: promises of the past that rob people of future options.

The flow of capital

Policy has focused on making the flow of capital as great as possible while discouraging people from worrying about retaining that capital. So, as long as the flow keeps expanding, the fact that it flows down the drain is immaterial.

Instead of letting capital flow down the drain:

  1. Redirect the flow of capital so that the same place can retain it.
  2. Make low-stakes space for entrepreneurs to fail quickly, learn, and get back to innovating.
  3. Support private enterprises that bring capital into the community.
  4. Thicken up: grow incrementally, and shun the silver bullet projects that are likely to expand liabilities.

Import replacement

Who will stick around when the going gets tough?

Import replacement is about replacing things that take money out of the community:

  • Buying a cup of coffee from a locally owned coffee shop instead of a national chain.
  • Hiring a local technician to repair a broken refrigerator instead of buying a new one.
  • Banking at a local bank or credit union instead of one of the nation’s large banks.
  • Choosing to walk or bike to a destination instead of spending money on driving.

How to replace imports in strong towns

  • Recognize that not all jobs or opportunities are equal. Just because something creates a job or a new building doesn’t make it good.
  • Focus not on capital flow, but on the community stock of capital.
  • Avoid chasing low prices.
  • Consume more efficiently. If we don’t make any electricity locally, all the money spent on electricity leaves the community. So, using less electricity will allow us more resources to spend locally.
  • Seek local substitutes. Be creative and recognize that nothing is too small, especially if it builds momentum.
  • Support local business ownership. And when the local alternative is not selected, let them know why.
  • Never subsidize corporations, franchise, and other non-local competitors.
  • Start small. Scale to what the community can support. The effects here are cumulative while the actions are habit-forming and self-reinforcing.

Investor expectations vs. entrepreneurial needs

Investor: A person that allocates capital with the expectation of future financial return.

Entrepreneur: A person with a crazy idea who does not know they can fail.

The person who buys the Dunkin Donut franchise is an investor. The person who starts a doughnut shop in the vacant storefront with only a deep fryer, a folding table, and a smartphone for taking payments is an entrepreneur.

Making space for entrepreneurs requires resource-focused communities to think differently about some things.

  • Understand the nature of small bets. An investor seeks steady gains over time, but entrepreneurs are generally engaged in pass-fail types of endeavors.
  • Tolerate a degree of messiness. Local governments often prefer to work with investors over entrepreneurs because investors know to keep things tidy. In comparison, the entrepreneur can come across as disorganized
  • Get out of the way. Ask entrepreneurs, “what are you struggling with,” and then work to diminish that struggle rather than developing plans and programs to broadly assist the business community.
  • Celebrate success and don’t personalize failure. What should reflect poorly on the community is if not enough entrepreneurs are stepping forward to give their ideas a try.

Making space for entrepreneurs in strong towns

  • Use pop-up commercial spaces. We think of businesses as storefronts or offices, but often entrepreneurs are not ready for that.
  • Waive home occupation requirements. Would Bill Gates or Steve Jobs be able to start their multibillion-dollar businesses in their garage today?
  • Ease up on permitting, especially for building reuse. Processes that require someone to prove a negative up front—that they won’t be a nuisance—are easy on bureaucrats but a huge obstacle for entrepreneurs.
  • Lower the bar of entry on using existing buildings. The regulatory default is to require a business owner wanting to use a building to bring it up to the latest codes before doing anything else. This forces entrepreneurs to become developers.
  • Use the makerspace and co-working models.

Economic gardening: bringing it together

In the resource trap, the most common way to attract investment capital from outside the community is to provide subsidies. A more successful approach is to create an active ecosystem of entrepreneurs that signals to outside investors that they should want to be there.

Economic gardening recognizes that the most stable and prosperous businesses are those that are homegrown. Generally, those enterprises start with solving a local problem with local resources.

Economic gardening focuses on companies that are in the best position to accelerate job creation [see “Stage 2” below].

  1. Startups, sole proprietors, and non-scalable local businesses.
  2. Businesses with between 10 and 100 employees, generating $1 million to $50 million in annual revenue, with the potential to sell goods or services outside of the local community.
  3. Fully mature business with more than 100 employees.

Almost 80% of companies are Stage 1 and will never grow beyond that. Most economic development programs focus on Stage 1 or Stage 3 companies, but an economic gardening approach recognizes that Stage 2 companies create more jobs, and that these Stage 2 jobs tend to pay more and provide greater options for advancement

Committing to economic gardening in strong towns

  • The best jobs are locally grown.
  • Flashy is not automatically better. Recruiting that one business with 50 new jobs results in the same number of jobs as adding one new job to 50 local businesses. The former will garner attention while the latter builds community wealth.
  • Public subsidies for business attraction is a sign of failure. Just like successful people do not need to pay their friends to like them, successful communities do not need to subsidize businesses to choose their place over another.
  • Economic development is about the public’s risk and reward. It is not enough to measure success in terms of jobs created or new tax base added without also accounting for the risk and liability assumed.

To prepare your community for an economic gardening program, start with the following:

  • Introduce the idea to key officials. Ideally, the idea quickly becomes theirs.
  • Identify partners and key supporters.
  • Create an economic gardening steering committee.
  • Identify target business partners.
  • Develop a service delivery approach. Each economic gardening program will be different based on the needs of the participants and the resources of the program.
  • Commit to ongoing communication, transparency, and fiscal rigor. Economic hunting is all about the next big score, but economic gardening requires an ongoing, rigorous commitment to an approach.

Even so, there are instances where it makes sense to provide public subsidies to businesses. Those cases look a lot more like repairing damage or addressing past failures than welcoming something shiny and new.

For example, a strategic location that has some type of environmental contamination requiring remediation is a good candidate for tax subsidies.

Infrastructure & maintenance

Federal Investments in Local Infrastructure: Jobs and Growth

Local Investments in Local Infrastructure: Jobs and Growth + Long-Term Maintenance and Replacement

Like a company founded with a lot of cash but a bad business model, cities have literally grown themselves into decline. There is no way for a community to grow their way out of this using the same development model.

Cities must stop building more infrastructure and switch to a model of intensive maintenance, combined with making better use of what has already been built. Our cities need to thicken up, increasing their financial productivity as they become better places to live.

This happens with incremental development, the time-tested approach cities used for thousands of years to build wealth over a broad area over a long period of time.

Building community wealth using incremental investments requires resource-focused communities to think differently about some things.

  • Infrastructure is not an asset. The community’s tax base is an asset, but its infrastructure is a long-term liability, one that never goes away.
  • You don’t need (or even want) more infrastructure.
  • Small steps are better than large leaps.
  • Maintenance is king. When a local government prioritizes maintenance, it signals to the community that it is serious about the future, that it can be trusted with more substantial undertakings.

A successful roaring fire

Resource-focused cities of the past built wealth in a downtown core surrounded by neighborhoods. For example, the more successful the downtown became, the more people wanted to live in close proximity to it.

Think of it as a roaring fire where more and more fuel is being added all the time.

Modern development practices take the opposite approach. Homes and businesses are spread out, disconnected from each other throughout the system. This is like taking the logs in that roaring fire and spreading them out over the ground.

Reinforcing a Main Street ecosystem requires resource-focused communities to think differently about some things.

  • Zoning reform is essential. Zoning was originally put in place to separate businesses with smoke and noise from the places people lived. Over time, zoning became the cookie cutter to quickly replicate the post-War development pattern across North America.
  • Connections matter. In an ecosystem, all the different parts act independently but, over time, they grow to work together
  • Design matters. One thing modern people generally admire about humans of the past was their attention to detail—all of the ornamentation and craftsmanship they put into everything they built.
  • The stories we tell ourselves matter. Festivals, parades, and other celebrations reinforce our connectedness and help communities face difficult challenges.

Making surrounding neighborhoods stronger

  • Focus on your downtown and an ecosystem of neighborhoods.
  • Regulate neighborhood compatibility, not just usability. Fragile development approaches focus on separating all elements of a city into monoculture pods.
  • Legalize neighborhood-essential services. Obtaining daily essentials shouldn’t require everyone to travel to the same big box store.
  • Use a “park once” mentality. There are few things that rob a community of capacity more than imposing the need to park a vehicle with every trip.
  • Expand housing opportunities. Top-down financing has provided local communities with an abundance of single-family homes and clusters of high-density apartments, but this is like a forest with only two types of plants: sequoias and ferns.
  • Improve the housing stock. People need to have confidence that their investments in the community will pay off.
  • Leverage public spaces. When a park, public building, or open space is well designed and connected to the surrounding neighborhood, it radiates wealth to all the nearby properties.
  • Throw a party. There is a reason nearly every city of the past, no matter how small or how poor, developed its own culture of parades, festivals, and gatherings.

To have focus and intention means starting where you are and working with what you have. That will be different for each community, but a good start has you:

  1. Forming a working group.
  2. Taking stock of where you are. As dispassionately as possible, make an accounting of the challenges your community faces and the assets you have to work with
  3. Identifying the easiest first steps. What is the thing you can do right now with what you have?
  4. Getting started.

Conclusions

  1. Fund maintenance, not expansion or new facilities. Local governments already have more infrastructure, buildings, parks, and other facilities than their tax base can sustain.
  2. Re-create economic development offices to support economic gardening. When businesses are ready, help connect them to the private sources of capital they need.
  3. Instead of subsidies, invest in platforms for building prosperity. Facilities like commercial kitchens, co-working spaces, and makerspaces provide community capacity to innovate and solve problems.
  4. Accelerate the benefits of economic transformation. For example, instead of injecting a million dollars into a single project, permanently endow a local entity with a million dollars to fund micro projects and small improvement grants.

The 4 steps to Strong Towns

  1. Humbly observe where people in the community struggle to use the city as it has been built.
  2. Ask the question, What is the next smallest thing we can do right now to address that struggle?
  3. Do that thing. Do it right now.
  4. Repeat.

Did you just read this post for the first time? Awesome! Next, read “Strong Towns for music: strong music scenes“.