Most cities and towns in North America are functionally insolvent. This is not hyperbole. It comes down to a simple question: Is new development producing enough wealth to fund the long-term maintenance of its own infrastructure1—let alone public safety and all the other services that we expect government to provide? When we examine these costs and revenue streams, we often find the answer is no. 

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The next increment of development should be available everywhere with few obstacles. Where today there is a block of single-family homes, it should be legal and easy to add a backyard cottage or do a duplex conversion. Redeveloping surface parking lots, allowing entrepreneurs to start with a pop-up stand or food truck and graduate to a brick-and-mortar building, encouraging a wave of incremental developers and rehabbers—these are the forms of growth that our leaders must now pursue, not large-scale development requiring costly subsidy.

The greatest obstacle to this change is, of course, us. Americans are said to prefer their suburban homes and their big box stores—and this is true, albeit in the same way they prefer other subsidized options. If we had to pay the full cost of an Uber ride or the delivery of an Amazon package2—if our system didn’t distort and subsidize these alternatives in a variety of ways—our preferences would change.

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• 1. … while that new big box store, strip mall, or drive-thru restaurant may last only a couple of decades, the maintenance obligations from all that asphalt and those new sewer lines are eternal. Too often, though, we haven’t ever bothered to quantify those obligations. When you begin to do the math on our development pattern, what you find is alarming.
• 2. While we all understand that Uber must someday run a profit and Amazon can’t continue to sell and deliver products at a loss indefinitely, we don’t hold our cities to the same constraints. We must, if we want to be able to rely in the future on the same level of services we expect from our local governments today.