Welcome all to Davis Futures Forum. Another one of a series of very impressive and interesting sessions that they've been sponsoring in this community. I'm Councilman Dan Carson, and I'm pleased today to have the opportunity to introduce Joe Minnecazi. Joe is a bachelor's degree in architecture from the University of Miami, a graduate degree in urban planning from Harvard University. But what he's really known for is his role as a principal in Urban Three, which is an Asheville, North Carolina-based firm that does consulting work, including for many local jurisdictions. Joe's got an extensive knowledge of multiple disciplines, economics, real estate, tax law, local government, geographic information systems, as you'll soon see, if you haven't before, and even behavioral psychology. What he does is he helps us to understand why our communities perform, especially economically, like they do, and how we can use this knowledge to better achieve our goals for the future. Joe's worked with some 150 communities over his career using his GIS mapping skills to explain why some cities have enough revenues to meet their needs while others seem to struggle. He will share this information using a jargon-free, plain-talk approach accompanied by some mind-opening graphics. We thank the city of Benicia for paying the bill to bring Joe to our part of the state once again. And we thank him enormously for taking a side trip here to visit Davis once again. His presentation some years ago were, in fact, the word mind-opening was a good way to describe it. So thank you, Joe. And take it from here. Thank you. Got a lot of stuff here. Let's see, does this one work too? Okay, cool. I'm gonna go through a lot of stuff and go through maybe a new way of looking at city planning and city development, but really it's kind of simple. It's just really thinking of things economically and how the economic steers the shape of our environment, which then affects our behavior. What we have in this slide here, this is a shot of the economic productivity model of Auckland, New Zealand, and not only can you see the power of downtown economically, but you can also see the fingers of transit coming out into the community with commensurate density within that. But this is a different country. When I talk about cities, I often have to come up with my metaphor for how cities are, is there places in time full of humans? So humans are places in time. I am a place in time, and this is how I started my time. When I was three months old, and this is my trajectory. So I'm gonna be papa whether I like it or not. And there's not a lot I can do to change that trajectory. You all look at your family, you see this, the older you get, the more you see those habits. So we're more importantly, this guy here. So I'm genetically Italian, again when I had hair. And I have a certain DNA baked in me. You'll see how much I'll wave my hands around when I talk. We also have a genetic predisposition to heart disease in my family. So I've got this duality of being an Italian and want to eat a lot, but also I have heart issues. So I have to exercise, I have to diet, I have to do those things. So cities are all places in time. Where's Davis? What does Davis wanna be when it grows up? Who's Davis's grandfather? Who's Davis's grandmother? Do you have that in your mind? And are you seeing the good things and the bad things? Are you growing smartly? Or are you growing with problems? And this is, I'm gonna give you a lot of information. If you just have that in your mind, you're gonna grow as a community. You have an incredible university in town importing people. A lot of cities would kill to have that culture changed. And how do you capture it? How do you deal with this, which is unique to you? So I live in Asheville now.  We're up in the mountains of Western North Carolina, about four hours northeast of Atlanta. Beautiful sighting. Actually, can we get the lights because y'all don't need to see so much. It's like washing out the screen now. Wrong lights. Is there one to get the bars maybe? Sweet, awesome. Even better. So Asheville's up in the mountains, quirky little town. We have bluegrass music. We're 90,000 people. We have 40 breweries, 40 breweries for 90,000 people. And like any little mountain town, we have men dressed as nuns on tall bikes that eat fire. It's your typical little place. Asheville didn't start this way. This is a shot of Asheville from the 1800s. It looks a lot like these pictures that you have around you. We were essentially a drover's town on a trail between Charleston and points northwest of us. 15 years after this picture was taken, this is what Asheville became. We like to say the three T's made Asheville trains tourism and tuberculosis that once the train lines came, it brought a flood of tourists and a lot of people escaping the polluted cities of the Northeast. Completely changed our city. We became the second largest city in North Carolina. And a lot of people don't realize that. We also achieved the highest debt per capita and we fell flat on our face. We were essentially in debt until 1976. So when people come to Asheville, they don't see this Asheville. They don't see the 1990s Asheville that was all boarded up in abandoned. They don't see these pictures of, that's a 1996 Chevy celebrity right there. Wouldn't you like to come fix that up? Just put a little elbow grease into that. So like a Greek choir, anytime somebody tried to work on downtown or work in our urban environment, we would hear from our community, we're not urban, we're not a city, we're not Atlanta, that's not who we are. We're rural mountain people. We're a little village. Where did they get that? It's the psychology of how we see ourselves or how we shape ourselves. Well that steers how we behave as well.  You're not gonna deal with these complicated problems of all of these abandoned buildings. So I worked for this guy's company. This is Julian Price. Julian inherited a tremendous amount of money and he put $15 million into a for-profit real estate development company. So we fixed buildings with that money. We were essentially a revolving fund. 75% of the money went into sticks and bricks. 25% we would seed businesses. So we funded the first vegetarian restaurant in town because banks wouldn't fund it. We have a nightclub. It's trying to get the things going on the downtown that supports downtown life. This is all straight Jane Jacobs. It's getting people living downtown, being downtown. It's really simple. And it's not to say that y'all need to live downtown. It's just say that that's a part of our community. So this is one of our buildings before and after. And it was really simple. We just took off the skin and turned these into apartments. These are four to 500 square foot apartments. So let's do a quick little marketing survey. Who in this room would live in a four to 500 square foot apartment? Got about maybe 10% of the room. Let me change the question. Who in this room has lived in a four to 500 square foot apartment? That was our marketing survey. Rather than think about where we were, what our needs were, who we were, we thought about what a community is. 28 units. This is a 99% leased up before we opened the doors. That's called a home run in the real estate development world. So we found as people weren't looking at the right data. They were just going off heuristics and biases what they thought things were. They were shaping confirmation bias around that of basically finding the science and the data that supported how they thought rather than seeing the totality of the city. And we're constantly bringing this forward to people. Really cities are just finite boundaries of land that has to be managed. And if you talk to a farmer, I mean you all have a farming school right here. If you talk to a farmer, how do they talk? They talk in economic terms. Was the crop yield per acre, the water per acre, the labor per acre, the crop yield per acre, the profit per acre. It's all a per acre methodology. So let's do the same thing with the city. This is one of our buildings that we rehabbed. So we put in ground story retail, second floor office, upper stories residential. The city did the streetscape project. So thank you city, thanks for the garbage can, the bike rack, two benches and a street tree, right? We didn't pay for that. There are people in town who are just like, you got subsidized. It's like, yeah, yeah we didn't pay for it. The whole world can walk on it but that was a subsidy, fine. We took this building from $300,000 of tax value to $11 million of tax value. So this asset that was sitting in the farm just shot up 3,500% in value. That's 3,500% more money y'all get, right?  Do you have a 401K plan that grows by 3,500%? Wouldn't you like that? This is how we cultivate wealth, right? Wealth that can be reinvested back in our community. Do the stuff that harvests the best crop, right? And people are like, well Joe, that's $11 million. We've got this Walmart that's $20 million. Fair enough that Walmart is double the value. That's it right there, 20 million versus 11. But it took 34 acres of my farm to make that happen versus our building at .2 acres. So it's really not the right way of looking at it if you just look at those two economic numbers, that's not fair. So per acre, our tax yield is $600,000 versus their $6,000. And in your state, in my state, the immediate response is we don't care about property taxes, we care about retail taxes, all right? Per acre, we're doing double the retail sales versus them. Who would have thought a furniture store, a tattoo parlor, and a beauty salon are producing double what a Walmart does in retail taxes? Look at the numbers, it's right there. Don't operate what you think you're going on, look at information and then get informed. We've got residential per acre, they've got nothing and we've got more jobs. So why aren't we looking at this stuff in seeing what produces the wealth for your community? And this is just the straight data. So if you could grow something in California, what would you grow? Cash crop, grow some weed, right? This is, we know this in farming, take it to your city. So I want you to realize this isn't complex math that I'm doing here, it's fifth grade division and we already do this. When we talk about cars, when we talk about cars, we talk about them in a miles per tank basis. Could y'all imagine if I was like, my truck gets 650 miles per tank, it's the number one thing here.  We know that it's got a big tank. We say miles per gallon, that's how we measure efficiency. When you say miles per gallon, the numbers change and we should all be driving BMW Settas, is 70 miles per gallon. I'll give you a copy of this whole presentation if you want, so you don't need to photograph it all. But who would've known that a 1955 BMW Settas is actually more productive than a Prius? Sorry to the Prius owners in the room. 1955 technology's more efficient. It's also more dangerous if you have a head-on on that thing, you're stuck. But anyway, one of Judy's conferences is actually a smart growth conference that you held in Seattle. I presented this slide in front of the audience. All these folks that are in environmentalism, smart growth and affordability and whatever, right? And I stood there with the slide up of Mark Twain that says a person who won't read has no advantage over one who can't read, right? That's a quote about literacy. And I stood in front of the room and I had my hand in the air and I asked all of my colleagues who in this room completely understands how property tax assessment works and how all of your taxation works inside your state. Y'all fully aware of how Prop 13, Measure 50 and all of that complicates things and works inside your community? Got one hand? Two, three. I stood, maybe six.  We're trying to make great places and we don't understand the financial consequences of what's going on inside the tax system that undermines everything we're trying to do. We're effectively tax illiterate. How do we not know this stuff? Why do we not know this stuff? I'm trained as an architect, folks. I like to look at pictures. I like to do drawings. Greg and I went to school together. We drew drawings. I didn't like to read tax documents. Why don't we do them? Why don't we understand this stuff? So why does taxes matter? Well, taxes are what drives everything is the financial consequences of shapes behavior. If you tax me less for something, then I'm gonna do more of it, right? So here's what's going on with our downtown. We're a $15 million investor and $100 million at portfolio, right? So our downtown was worth $100 million. Just by fixing buildings that were already there, that's the value that we captured in our community. We didn't get a new building until 2008. So that $500 million of value was just sitting there, not used. Now to show you that it's not all love in Roses and Asheville, these are some campaign ads from the 1990s. I love these. I actually like this guy's name is Chris Peterson. And here he is complaining about streetscape projects downtown, a parking deck, $26 million. Downtown development for bureaucrats instead of water sewer streets for our citizens. This poor guy's crying. He's so upset. Now you may not have people like Chris. Chris is a fairly unique individual. You probably have people that are very similar to that. So it's $26 million, that's a good point. So let's do some math here. If you invest $26 million on a $100 million asset and it grows to $500, is investing $26 in yielding $430 million, is that a good return on investment? Yeah, yeah. Now why the hell do we listen to Chris? Why do we sit in a meeting in this room and take input from whoever happens to show up and what they feel like about their community rather than look at the data? Yeah, we steer our political process this way and it's okay to have opinions, but you're not entitled to facts and you're not gonna stop Chris. He's got a website now with Fire and Brimstone. I like this, he misspelled charlatans. This is the mayor. I asked the mayor, I'm like, is that a liquor drink? She goes, it should be. You know, Chris is gonna keep going. I mean, look, we're dealing with this at a federal level now. This is what our political discourse has become on both sides of the aisle. We're not looking at information. We're not being fair about the data and we're not moving forward with the information. So we're allowing this kind of storm to happen. And what I've discovered in my career, it's a loss of civics. This is a kid's book that I found in a garage sale. The city, the town, and the country. We've got the city, the town, and the country. Teacher's Guide. So as a teacher, in your third grade class, third grade, 1959, you teach your kids about regional planning. In kindergarten, you learn about your house, first grade of the school, second grade of the neighborhood, third grade regional planning. Did you all do this in third grade? Yeah, one person? Are you Canadian or something? Yeah, Bakersfield. Bakersfield. Okay, so what I like about this book is it says things like this. While patterns vary from state to state, counties are responsible for libraries, education, welfare, agriculture. In studying the functions performed by your county, you will no doubt find there's a duplication of services and overlapping of jurisdictions and a lack of coordination between the county and the communities within it. Did y'all have that problem? Yeah. My county is actively against my city. And I had one of my county commissioners tell me one time, we're doing this for the people, the county, not the city. And I was like, dude, I'm a county taxpayer too. Like, why? Why do we not coordinate? Why isn't Yellow County helping downtown Davis? They're getting property taxes out of it, right? We're all in this together. So this is my favorite part. Like, this is getting a new school. So we have, and it's one of those, you know, Dick and Jane kind of look to it. A new factory gets built. There's even more kids that go to school. So in blue right here, you can't read that. But in blue it says, give four good reasons for building a new school. In your third graders, talk about what? Equity, everybody should have a desk, maybe get another teacher, split the class in two, that's infrastructure. On the right-hand side over here, you read about Mr. Canfield who lived next door to the Alans, he says, our taxes are too high now. If we build a new school, we'll need more teachers and everything else, we'll have to pay higher taxes. That is indeed true. So you ask your third graders, why would some people be against paying higher taxes? Third graders having a conversation about need, challenges in the community, and how to pay for it. I go to communities like, I want artist housing, I want this, I want that, I'm like, yeah, go ahead and write checks. Can you afford it? I want to have, we talked about this this morning, I guess you all have free parking downtown. What the hell's up with that? It's like, there's a cost to that. Put it down on a ledger, what are you paying for? Is that the best use of your funds? And if it is, great. But realize you're taking from your revenue bucket. So this is my favorite part of the book. Remember to you that many children where they're urban and rural and regardless of region are tragically limited in their knowledge of their world and their world's largest based on which they live and operate. It's this tragic limitation that people have. I need to have that free parking downtown. Oh, I'm sorry. Let's just go ahead and just get out of the way for you. This is where we allow our community to do. Sorry, counselor. I mean, this is what you have to put up with when you're sitting at this dais, right? Every community I go to, it's all right, give me your opinions, but it's gonna cost money. And we don't think through the long-term consequences of this. So what I found is that that city, our city in particular, you have a growth boundary, we have a growth boundary, ours was mandated by the state upon us, which is, we have a great state. This is after they passed the bathroom bill, took our water system, took our airport, and then threatened to liquidate our charter. So welcome to North Carolina. But those acres are all that we have and we have to manage them. And what government is, is it just effectively a large business?    It has to cash flow. And it's not just your city, it's your county, it's our state, it's also our country. Joe Biden said this on the Stephen Colbert show, the United States is the largest corporation in the world. At midnight, I'm such a nerd, I was looking it up, that is the federal law that lists us as a federal corporation. It doesn't say we're a capitalistic corporation, we are a social corporation, we are in it together, it's got to cash flow. That's why we pay taxes. Is this too nerdy? You all right? My city's worth $14 billion, which is six times the value of Ted Turner. When I talk to my politicians in town, I'm like, do you think Ted Turner just looks at Facebook every day or just wants to see the comments of people? Of course not. He's looking at data on CNN and seeing what's working economically. Yes, he's taking input, but he's not driving his business off input. So we've done this all across the country out about 30 different states. It's really kind of phenomenal. Every state has different tax systems, but it all yields the same results. California has the same sprawl that Arizona has, Arizona's got more of it, but North Carolina's got sprawl. We're all building the same patterns because our tax system actually rewards it. So this is for every dollar of county taxes, somebody out in the county is paying per acre in taxes, their brother and sister in the city is paying about five times that. This is the Walmart, that's a mall, that's a two-story building, three-story building and six-story building. What's crazy is that it's an exponential jump when you start stacking stories or, alternatively, the less you build, the lower the taxes, right?  Why do you hate Walmart? And I presented at the International Association of Assessors Conference. Is there an assessor in here? Anybody ever hang out with an assessor? Imagine 3,000 of them. It makes a planning conference feel like Burning Man by comparison. It's the squares conference ever, but they're super awesome people. But this guy got up and presented at eight in the morning. This is the head of Walmart's property tax division. He did this amazing presentation on how cheap Walmart's are. I'm in the back of the room drinking my coffee and I'm like, this is brilliant. He's getting all of his property taxes lowered in one meeting. That's efficient, right? Showing you spreadsheet after spreadsheet on how crappy his buildings are. So I'm like having a coronary because I'm like, how is he getting away with this? I used to work in government, but no one ever trained me taxation. I was a planner. And I'm like, no one cares? Well, the assessors don't care. They're just as agnostic. It's either value or no value. They can't make it up. So I went up to the microphone and I asked him, I said, Mr. Trurell, what's the useful life of one of your buildings? And he immediately shot back 15 years, maybe 20. We designed the building to depreciate as fast as possible. We'll build another building and depreciate it down again. We don't care about the buildings, they're a throwaway. That's it. When you have a tax system based on value, there's a perverse incentive to build junk, period. The life cycle of a Walmart is 15 to 20 years, which is the life cycle of a cat. We leased more in the passing of a cat. Sorry to the cat people, I'm a dog person. I'm just trying to make a point. It is a limited investment in your corporation and your business. And if that's cool with you, if you like that, go for it. Strip malls aren't that much better. So this is the tax system of how it all operates. And I don't understand why people don't see it. It's partially because of the way that we talk about things, the biases that we have. And a lot of it just because we don't see it. I can show you your brain, right? And the blue stuff is your brainstem activity. The green stuff is your creative thought process. This is not mysticism. This is not wonder. This is science. It's data. And if I can show you this, can I show you an economic MRI of your place? So this is Hennepin County. We're at home of Minneapolis. Can you tell where downtown Minneapolis might possibly be? So when we do these CAT scans, we're starting with base data. I'll show you Asheville for a second. This is my county. So up here in the upper northeast here, that's Mount Mitchell. That's the biggest mountain east of the Mississippi. It's a big park. Got the Blue Ridge Parkway that comes through town. There's another mountain down here, Mount Pisgah down there. Low value is in green. Hot purple is high value. That big purple splotch right there is the Biltmore estate. So when Bill Cecil, heir to the Vanderbilt fortune, shows up at a council meeting, we all genuflect and thank him first time because his house is worth $100 million. Anybody have a $100 million house? But it's really not fair because his house is sitting on 8,000 acres of land and his house is 180,000 square feet. Anybody have a 180,000 square feet house? No. So rather than see it that way, because that's like miles per tank, let's say value per acre, right? Boom, this is a different way of seeing it. Same information, different question, different map, different results. Here it is in 3D. Can y'all tell me where downtown Asheville might possibly be? Now not only can I see downtown Asheville, I can see our little sister over here in Black Mountain. This is a village of 12,000 people. We can see it's downtown. The urban form produces value. Conversely, the suburban form doesn't. We've been able to leverage our growth since World War II by basically harvesting the wealth out of our downtowns and diluting it into a pattern that gives us very low return. That's what we like. There's a great old colonial barb. Don't tax me, don't tax thee, tax the fellow behind the tree. We're a country of tax evaders. We had a tea party revolt. Hello? We've designed a tax system that rewards a single family house. It's that simple. And there it is in the model. Is this depressing still yet? It's gonna get worse. So we found that you have to show people this. I just can't tell you what's happening. I have to show you physically with your eyes. This is an area called Fairview. These folks think they pay a lot of taxes. Well, compared to their cousins out here, yeah, they do pay more taxes. They have no idea what we're paying in downtown. They have no idea what we're paying in our city. So surely, California's different. You all have Prop 13, right? Well, here's, this is Vesalia. This is Fresno. Now, this is an old model we did with Judy for the Local Governments Commission in 2013. Downtown Fresno was not exactly happening in 2013, but look at it jumping off the map. This is Mountain View. What's nice about what Mountain View was doing is that they were building up along their transit corridor and adding growth and actually adding and harvesting wealth along the corridor. Here's downtown. This building on the upper slide, one acre of that would equal the 18 acre plaza. Again, apples to apples. This is one of my favorites. This little coffee shop with an office above, basically one tenth of an acre of that would equal the eight acre target site. How do you harvest wealth in your community? There's things that you can look at and find this data. This is almost illegal to do back then in that community. It was almost impossible to do that because of setbacks, parking requirements and all of these other things that they put on is zoning on top of it. But what's crazy is it's been there for 100 years. So how thick was the zoning code when that community built that building? What was their environmental review process and how many design review committees did they have to go through? Yet they understood how to build cities. This is Sonoma County. I love this because Roanoke Park was way into doing retail and you can see the results of that. Here's Roanoke Park kind of flat as a pancake between Petaluma and Santa Rosa. So these are choices they made. You want to harvest retail taxes, great. So zooming in to Sonoma, one of the things that's nice about Sonoma, or not Sonoma, Santa Rosa, that's the mall down there that they dropped in the middle of downtown where the highway is. But this is the railroad district, this little purple mountain going on right there. What's not seen as value in their community is actually highly valuable. So Riverside, there's just a piece of Riverside down at Temecula. This is you guys. This is Davis. So you have a container and you have a high base. We do these ratio analysis. How much downtown do you have to your base? We typically see a six to one ratio where you have the mountain, the purple mountains for every footprint that it takes. It's six times the potency. You guys are only to one to two. So whatever you've done, you've kind of suppressed your valuation. I don't know if that's just your development process or what, but this should be a bigger purple mountain. Kind of like that. This is Manchester, New Hampshire. This is Bozeman, Montana. This is what an eight to one ratio of a downtown to value to the residential area. So think of that. This is an area that you can actually harvest wealth to cover taxes, to pay for things that you need. In Chapel Hill, North Carolina, they have 100% free busing for the whole city. They also have a growth boundary. Even though they're in North Carolina, somehow they pulled that off. So there's things you can learn from other places and you can see it visibly in the model. Again, that versus you guys. So you have a nice mound, you have a cluster, but you don't have a spire like that. Ontario, I brought this one in because this was a fun group. Canada is a blast. Y'all need to go check out Canadian policy. This is a Canadian tax system compared to ours. Ours is like a 1970s equalizer and they have like all the, for as sophisticated as you think the California's tax system is, it's nothing compared to Canadians.  But this is their city that we did in 2013. And what was great is they went ahead and updated the models. We have 2013, 2016, and then 2019. So what they did is they started thickening up their downtown. They did, I think, three buildings that were 10 stories tall. You would think the sky was gonna fall.  Instead, they grew up and they actually grew their mountain to that. And they harvested wealth out in their community as well. They built a couple little village centers out there but you could see it in the data like a CAT scan. And this is, they're very proud of their effect. They actually also have, in addition to, a reserve fund. So they've got a very healthy reserve account to pay for all of their roads and pipes and everything. They also have a growth fund. Their finance officer's like, oh, of course we have a growth fund because sooner or later we're gonna grow. We need to have money so we can actually fund that growth.  Like, this is crazy. Most American cities can't afford their roads. So what about retail? Your California town, this is back to Minneapolis. What I love about Minnesota is they have really good data. But also with Minneapolis, they have Mall of America. And when Josh was doing the mall, again, this is just retail. There's no property, anything. This is just the cash flow of retail. This is the single largest mall in our entire country. And I was like, Josh, what's up with downtown? Where's downtown? He's like, oh, it's up over here. So this is what downtown produces in retail taxes per acre versus Mall of America. They didn't even believe this when we showed it to them. I'm like, it's just your data. We just put it on a map. We have to look at this stuff. We have to find ways to see this stuff.  It's like, no, I want you to do math. Then make decisions. This is Redlands, California. We asked them what that thing was.  We're like, no, it's actually this. Who would have thought a two-story jewelry store was more productive than the skyscraper? Look at the data. This is one of my other favorites. I love that it's a very creatively titled shoe repair. It's just a seven foot wide building scabbed onto the end of a building. But it's pulling $4 million of value per acre. So basically three acres of it would equal the 13 acre Walmart. What kind of harassment would you run this person through if somebody showed up with that as a proposal in downtown? You know, yet it's incredibly productive. When you use your real estate, you can harvest wealth. So taking one block of their downtown, both property and retail taxes. And I don't know if y'all have been to Redlands. Not anything to write home about from like an urbanism standpoint. But basically that much of downtown would equal all of that in retail and property. 18 acres of a downtown, a healthy downtown would equal 120 acre new development. So when you use your land, how much of it do you want to use? The thing that killed me was how much they tore out what they got rid of. I mean, look at these humans with their fancy technology of things called horses. And somehow they were able to build this urban environment in downtown Redlands. All this stuff on the right hand side is gone. So this is gone. This is the old Casa Loma Hotel. President Taft and President Roosevelt have spoke there. And now it's a state or brothers at like $500,000 of value per acre. Again, when you take that big stuff out, you're dropping the taxes. If I knock a building down, I've lowered my taxes. That's the tax system. So we went and got their mall and figured out what they tore out. So we pulled their sandborn maps and reproduced these buildings.   Here they all are. We could measure them and figure them out. So basically here's your mall at about $6 million of value. But by the way, this is called foreshadowing in the industry. That's downtown. So here's what you threw away. So basically you threw away $15 million of taxable value when you modernized, when you upgraded. Did you run the numbers on that? You know, it just blows my mind that we do these impacts on cities. We're not asking the economic questions. We all fall prey to the Kabuki Act of how we're gonna behave when we get into this council chambers. And we bring our own baggage in here. We don't think through the math of this stuff. Follow the data. So speaking of history, since we're talking about it, this is Charleston, South Carolina, one of the oldest cities we've ever done. Here's the three county metro area. You can see where Old Town is. It was kind of fun to mess with them in Charleston. We're just like, y'all didn't make the ocean. We're gonna go ahead and get rid of all the value that the ocean gave you. So the beaches are gone. This is what humans made. Charleston's an old city. It predates the decoration of independence. So I have a birth date for our country. You can see it up there July 4th, 1776, right? So we grabbed all the buildings that are older than our country. Things like this built in 1686. This is the Red Dot liquor store. It's the oldest liquor store in the entire country. But for 20 years when it was called something else, but they still sold liquor. There's a revolutionary getting his drink on. So we grabbed these buildings. Here they all are in plan. Here they are 21 acres of those buildings. And this is what they paid in county taxes in 2015, $600,000. They paid city taxes and business improvement district taxes on top of that. This is just what the county got, $600,000. Out in the county is a Walmart. Well, it happens to be the same number of acres, 21 acres. What it paid the same year. This building was born in 2005. That means it's gonna be gone by 2025, 2030. Those buildings on the right have survived half a dozen wars, a bunch of hurricanes, an earthquake, fires, and they've continued to produce this wealth for the community because of the longevity of how they're designed. They also are cool. So look at the numbers of this stuff and understand that the modern financial industry has figured out where all the loopholes are in our tax system. Back then we weren't designing things that way. We were designing communities because the money was local and if you did a bad building, you were embarrassed. Now we use national money to do this stuff and we're not paying attention to this cash flow. So parks, you know, Judy asked me a question about parks and the value that parks add. And this is back to Minneapolis for a second. This is just the dirt model. So we can go into the model, turn the buildings off, just look at the dirt value per acre. So this is just the dirt value per acre. Here's Minneapolis here. This is a little town called Wayzetta. So Minneapolis and Wayzetta. And it was kind of stunning to me. I was like, wow, Wayzetta downtown is pulling what Minneapolis is. I mean, it's pretty close. And when I show this to the planner, one of the planners is like, oh my God, you just demonstrated ordinance 1983, 22-65. I'm like, what are you talking about? He's like, well up until 1983 all lakes had to be publicly accessible in Hennepin County. And in 1980, because they're Minnesotans, they're very social. But in 1983, they changed the law that you could privatize the edge of the lake. So that is a privatized edge of a lake, right? So you see all of the people that could afford the edge of the lake will buy that property and they get the view of the lake. These people behind them don't. And you could see that right in the value right there. We're over here. This is a 1920s neighborhood. They have a publicly accessible greenway around both lakes and the park. So the value of all of that transferred into the neighborhood rather than just the few. This is how you can design open space to have accessible value to your community. It's got to be connected and it has to be integrated. And you all do a good job with that. But just be aware and be mindful of that, that you can actually add value to your community with that open space. Lots of times I hear, is this, are we doing all right with time? Fine. Maybe two minutes more. Okay. We were here in a, I was here with Chuck about five years ago. Chuck Marrone wrote a book called Strong Towns. I highly recommend Chuck's blog. Chuck's more of the cost side and we did a project together if we can get the revenue and the cost together. And we did it in Lafayette, Louisiana. And I don't know if you know much about Cajun people. They're really quirky. They're very funny and they're very of Louisiana. But when we got their books, I kid you not, this is the cover of their budget document from 1983. Do you think the finance officer was sending a message of the state of the fairs of the government? So that's the government in a onesie about to get hit by a shark and eaten, or hit by a wave and eaten by a shark, right? Now, what do you think the council did when they were faced with this? Basically they're going bankrupt. What do you think the officials did? I mean, they're just like, well, maybe next year it'll be better. They just kicked the can down the road. The finance officer to her credit, she's like, yeah, we're still screwed. And then the third year, they did this joint city county government. The counties are called parishes there. So basically the county was collapsing and they just shackled the city onto the county and it took them 20 years to sink the city with it. So here we are with them and we're like, what did you do to change your behavior? If you knew you were going broke, what did you do to change your behavior? Did you just fire the artist from the first two years and go to Microsoft clip art? Like, what did you do? And so here's their revenue model. Here's their downtown. Here's some new urbanism and they generally spread out into the swamps while fighting mother nature is super, super expensive. So pavement, things like pavement, do y'all know that they have a 6.6 square miles of roads? Is like, think of it as a really big parking lot. You don't know that you own this stuff. And as we're talking about it, and we're gonna do a distributive model to figure out who pays for what part and all of that stuff. One of the counselors said this to me, I thought this was great. It's not where you live. It's what you believe. What does that even mean? Like, yeah, I believe I'm Brad Pitt. Sooner or later I gotta walk by a mirror and get data, right? You know? What's funny was the response from the Public Works Director. He responded to the counselor by saying this, there's no such thing as an infrastructure ferry. We have $250,000. We can ship and seal about a quarter mile. That's all we're gonna get in this budget year. That's all you can pick, whichever quarter mile you want. That's all the money I got.  So we Photoshopped Kevin in on this one. And Kevin's like, you need to like explain it to them in the data perspective. So here's the failure. Anybody work in finance in the city here? Cities have to follow this thing called a CAFR standard. And in a CAFR standard, your roads are listed as assets. And when we sat down with the finance officer, I said, Lori, look, my computer's an asset.   Can you pick your roads up and can you sell them to Baton Rouge? And she goes, well, no. And Chuck goes, that's a liability. And she goes, but our CAFR standards. I'm like, Lori, look, no one's gonna show up from the GFOA and give me a demerit if I don't follow your CAFR standards, we're gonna show you how you actually function. So here's the debt load of their roads. Here's what they have as money set aside to fix that. So let me ask you a super complex municipal finance question. Do you have enough blue to pay for the red? No. So they're looking at 18 times a liability load of their revenue. Now here's the scary thing. They started taking out bonds. And I'm like, that's great. They were taking out bonds. You owe the bonding company the money back. That's like taking out a credit card to pay off your mortgage. You still have to pay somebody. And the bonding companies have right of first-world fusel to come in and skim off half their revenue. So they only have 25 million to pay for that. So it's actually worse than you think. So this is their whole city floating in a lake. The red stuff we sent everybody a bill for where they live. And the green stuff is the money that everybody pays in revenue. The negative against the revenue, this is what you get. This is the whole thing in 3D. You can see where you're bleeding your money. And if you take this thing and drop it on the floor, so all this stuff pops vertically, this is what it looks like. And they told me like, well, Joe, but people really want to live out here. And I said, yeah, that's what you're paying people to move out there. And I don't care that you do that. That's your choice. It's your community. But make sure you can understand that you can pay for that. Do y'all get that? This is the red, if anybody's colorblind, this is the colorblind model. But this stuff is covering the cost of that stuff. That's not a free market. That's a subsidy. And make sure you write it down so you can afford it. The scary thing is city after city we go through, we just grab stuff that they're sitting in their office. This is the amount of, they had 34,000 people in 1950, five feet of pipe per person, 2.4 fire hydrants per 1,000 people. They grew their population to 121,000. This is their feet of pipe per person now and fire hydrants per 1,000. So 350% growth in population, 1,000 and 2,000% growth in liability. Right? And they told me like, Joe, we got rich. We got oil money out of the Gulf. We're like, all right, we'll measure it.  They're actually richer than we are in Asheville. That's 160% growth in revenue, 1,000 and 2,000% growth in liability. They don't match up. That's like getting a $1,000 a year raise and convincing your partner into building an 80,000 square foot addition on your house. It just doesn't make sense. And the reason why it doesn't make sense is we don't see this bill until it comes due 40 and 50 years later. It is surely this is only happening here. Well, let's know. This is Lancaster, California. Lancaster's up and over the mountain from Los Angeles. Right? Not a great model. They just have one building that's three stories tall. You can see it right there. They didn't build up their downtown because they grew up at the wrong time. But what's crazy is they have 953 miles of roads in total. That's from Los Angeles to Portland paving a road. So imagine doing a capital campaign. Every 50 years you're gonna pave a road to Portland. That's what they have to do because they own those roads. So we put them on a timeline from 1910 to 2015 and we said, you're not building another road from 2015 to the future but your great grandparents went on a little road building in Spree in 1910 and then went to sleep until after World War II. And we all can see in this model what happened in 1953 when you built all of that. Right? It wasn't you, it was your grandparents that did it. Now that comes back to haunt your parents' generation with the first rebuild right there. When you're hit with that bill, when you're on council and you have this huge capital expense, like, oh, we've gotta get some money somewhere, right? Most communities, what do you do? You annex more land, you expand your boundary, you add more infrastructure, which they did, right? This comes back to haunt you for a second rebuild and it brings along with it the new stuff. So just looking at their model, we said, we're just gonna cash flow what you got. This is what it looks like. Chelsea, a problem.  Now, none of us penciled that out. We basically came back from the war, very rich. We didn't blow up our cities. We had this headway of lots of money and we invested in a system to re-engineer the way cities worked. We just dumped a bunch of money in the city streets and grew in that one cycle. And then we went ahead and repeated it because this felt so good that we wanted to do it again and we're convinced this is who we are now. This is our culture. And now by not adding roads, check this out, it's getting bigger and bigger without adding more roads. And it's because you're getting into second and third cycle rebuilds. Roads don't disappear, folks. Pipes don't disappear, you have to fix them. So they can only afford 50% of their roads. This is the system that they're in. And this is what they're going through right now is trying to find a way to figure out how to handle this. Some of the roads, they're gonna revert to dirt. They're just gonna let go, but they're making hard choices. And this is what just last month with you guys. I mean, it's right in your paper. You have the worst roads in the region. Why is that? Why haven't you invested in your roads? Why haven't you put that cash there? And it's not like they disappeared. You're gonna have to fix them whether you like it or not. So you're going through the same exact thing. You may not have the full scale of the problem that they have on Lancaster, but you still have the genetic problem. Every American city does. You're not alone. This has been a habit that we've been doing. There is a way out of this. Eugene, Oregon, we did their cash flow model. Here's their top of their model. If you lift this up, like you're looking for a salamander, this is the bottom. And you can see the spread of that subsidy across the model. And it comes down to building types. Basically, you've got residential, low, medium, and high density, mixed use, low, medium, high, and commercial, low, medium, high. This is their community, their buildings, and this is how they pencil out. The average single family detached house is subsidized there to the tune of about $1,400 per acre. That's a check that the community writes to that lifestyle. So make sure you can afford it. Or, oh, by the way, did you all know that this is all stuff that came out in 1973? This is the Nixon document cost of sprawl right there. We've known this for 50 years and we continually choose not to take that path because the suburban environment is so nice. I don't have a neighbor. I've got, it was super awesome. Somebody else picks up the cost on my road. So this is what they've got to deal with. So when you have 80% of your land use in that subsidized pattern, that's not a good recipe for success. So you have to dial up the other parts of your community and balance things out a little bit. Do a little bit more downtown or commercial stuff. So you can add in downtown, but also look at your model and learn from it. So there's this little thing up here called Crescent Village. So we said, why don't you just focus on four more of those somewhere and fill up your downtown if you want to keep single-family housing? Or you could do in the case of Minneapolis where they just eliminated single-family housing. Just like it's no longer protected, sorry. So there's lots of things you can do, but we're all in these kinds of problems right now. One quick one on incentives. There's a lot of biases baked into the model that we're not conscious of. This is one of my favorites. This is, again, back to land, taking the buildings off the ground and just looking at dirt per acre. And when I was presenting this in the community, I was like, hey, what's going on here with this big parcel of land is $15,000 an acre when you cross the street, it doubles to $40,000 by crossing the street. Do y'all know this standard? So the tax assessor was sitting in the front row and she raises her hand and she just yells out, you don't understand. I was like, what am I missing? Remember, there's no buildings here, this is just dirt. It's the same zoning district, same school district, same everything. And she goes, well, they have more land. The more land you have, the lower the value per acre. They have a smaller parcel, so the higher the value per acre. That was the reaction of the mayor. He's like, what? She goes, well, the more land, it's our standard, the more land you have, less people can afford larger tracks of land. When you have less people that can afford it, you have less market supply for that purchaser, so therefore we have to offer a discount. I was like, whoa, whoa, hold on a second. I've got three miles of street around this property. This fellow's got 200 feet. She goes, yeah, we don't count the investment as part of the valuation.  You don't want that money back. She goes, it's not our standard. Our standard is the more land you have, the lower the value. I went to the assessor's conference. This is the reason why I was there, because I wanted to find out where the hell this came from. And their magazine is called Fair and Equitable. And I asked them, how is this fair and how is it equitable? To their credit, they're like, it's not. I'm like, where did this come from? Did Moses deliver it to you? Where did this come from? They're like, we don't know. Go talk to Larry. I'm like, Larry who? They're like Larry Clark. So I tracked this guy down in the hallway. Larry thought this was hilarious. And I'm like, where did this come from? He's like, I don't know. Something in the 1700s when we came across the ocean from England, we probably carried it. It's probably a legacy from agricultural policy. But now that you point that out, it's not fair. It'll just take a little while to change through the system. If you aren't paying attention to this, you can't see what's going on economically. I'm gonna show one more example on subsidy before you yank me. These are all the market forces that are changing things. So Peoria, they told us they had a parking problem. So we measured it. Here's their water. Here's their green space. Here's their streets and sidewalks. Here's their surface parking. Here's their buildings. And of those buildings, these are parking. So it doesn't look like they have a parking problem. Looks like they've got a perception problem. When you build your city, there is a cash flow that happens. These are their numbers. The average Peorian, there she is, she's got 2.5 parking spaces dedicated to her in about 1,200 square feet of building dedicated to her. When it gets built, this is the valuation. This is their numbers. 35 bucks a square foot is the value of the average building. Parking's a buck 40.  Right?  Is a financial incentive to parking? Y'all remember that vote? Was that taken before the council? Do you have minutes where you've decided to give parking a 27 times bonus? Because that's what's going on financially. If you're paying 2% in taxes on that and 2% in taxes on that, this is paying 27 times less, but the cost is the same. That's a subsidy. So just separating them and running a cash flow, if you just put your money into a bucket, 100% of that 2% into a bucket, no police officers, no parks, no greenways, just purely in our road fund, the 2% off that would take 32 years to pay off that $22. This would take 786 years. Has anybody seen a road last 786 years? No. So why does our cash flow system, and again just write it down so that you can afford it, have a ledger where this is our subsidy that's gone out there. When you do the whole city this way, it's no surprise that they drop off around the downtown because you have a choker collar of parking. Even in your downtown, just walk a block or two off the main street, you'll find this. When you go out into the burbs, they're so flat because we mandate a bunch of parking out there. So doing the whole county this way, that's what you need for an entire county's worth of buildings in Peoria, that's it. But hey Joe, look, we're not from Europe, we don't want to be so close to each other. We want to stretch out, got land. Well, you need to park it, and then these are the roads to get there. So these are their numbers, they have more land to parking than building. Here's your liability, here's everything else. So these are their numbers, per square mile, you're getting a billion dollars per mile out of that. This is giving you 40 million, this is costing you 250, this is everything else. Why don't these two numbers match? This is the car moving, this is the car stationary, right? We know who's using parking lots, the car. So why don't we tax it, can measure it to the cost of the roads and make that uniform, it's real simple. So they have enough roads to go from Peoria to Vancouver. Do y'all know how many roads you have? Put on a map, take a look at it. This is all just spatial analysis. This joke only works for people over the age of 35, by the way, I know that. But just to close, we call this geo-accounting. You know, just putting data on a map and being agnostic about it and seeing what's happening. Your accountant is not gonna make choices for you, but your accountant's gonna make it clear what you need to do, right?  I don't care what your choices are, I just care that you can afford that boat. So we're just putting information on maps and not judging, we're just seeing what's going on so you can see it. I would recommend Chuck's book. He's writing a series of, and this is his first one on the American financial system and how he got into this mess. And do your math. Thank you. So we have a few minutes for questions. I just ask that to the point questions instead of long statements, we'll give more people to get their questions asked and we'll move around and start over there. Minneapolis eliminated single-family zoning as an as-of-right zoning. So you could still have a single-family house if you choose to, but your neighbor can turn into a duplex and you can't stop them. Actually, I think the neighbor can go up to a quadplex. So yeah, fourplex, yeah. So it's basically, yeah, they just raised their bottom up higher. He uses this one, I'll bring that one out. So I assume Davis doesn't charge what the market will bear for downtown parking in order to subsidize a vibrant downtown retail so that people won't just shop at Target on the outskirts of town. What do you think about that kind of subsidy? Or do you say, well, we just have to decide if it's appropriate? Well, what I would do is I would run the numbers on what that subsidy is, what's your cost in that. You charge the park in a deck. Why? If you're gonna make parking free, make it all free. Or if you're gonna charge for the stuff that's most expensive to service, which is the on-street stuff. You wanna have more in and out, more trips moving faster on the road. I mean, just read Don Sheep's High Cost of Free Park and he covers a lot of that.  Just Jeff Speck's chapter in Walkable City is a much easier digestion. But cities have figured that out and it's always controversial. The merchants don't like it. People don't like it because you're getting a free commodity.    And then you typically see the opposite where people are paying more for those quick in and outs and it turns over those spaces faster because that's gonna be the first choice people are gonna do. They're gonna wanna do the drive-by. So you gotta get those spaces active. I was just wondering, I mean, obviously some of these places have made significant decisions. How did they get turned around? I mean, how do we, for example, I mean, I would bet most of the people in here agree with you. But a lot of the people who need to hear this aren't here. And they're writing letters about how we're subsidizing this or we're subsidizing that. And they don't know the other subsidies because they're saying, well, our roads aren't getting fixed. So how did some of these other places turn it around? A lot of what this is is behavior. There's a book I'd recommend called Predictably Irrational, where we assume a more rational actor, but yet when you see an irrational behavior, it's kind of like, why are they thinking this way? How's this going? It's very emotive and it can actually change a lot of politics. I've seen the communities that are actually suffering are more quick to think about change where communities that are doing all right can do crazy stuff. My community, Asheville, North Carolina, our industry is tourism. Our college is only 2,000 people. So we depend on tourists. That's the reason why we have 150 restaurants. We have, by 1930, we had 30 hotels downtown. Now we have eight. And my community thinks it's too much. There's too much tourists. So we passed a moratorium on hotels. A lot of those old buildings that I showed you were all old hotels that we've repurposed in the housing. Architecture can change if it's designed well enough in an urban pattern that it can grow with the community and change uses. Don't fuss about uses. Fuss about the architecture and the building and making it urban and fit into a community so you can grow with it. But anyway, our baseball team in our city is called the Asheville Tourists. I'm like, really? We just passed a moratorium. That makes a whole hell of a lot of sense. You know, there's gonna be irrational responses. I think the thing that I would challenge you all is when people say it, subsidize, ask. Show me how. You know, bring other data to the table. Show your parking and show your subsidy. You know, just get people past biases. Does that help? So I saw your presentation five years ago and I made comments about Prop 13 and I do appreciate that you've looked more closely into California. But the reality is under Prop 13, properties that turn over more quickly are the ones that subsidize those that don't turn over. And commercial properties do not turn over anywhere near as fast as personally-owned homes. So I'm confused, I guess I'd like more data on some of the examples like the two-story shops that basically make a whole lot more money because in all likelihood, they changed hands more recently. And so I agree with densifying downtowns and trying to make them more vital, but I think the reason why you see kind of the flat bump in our downtown core is that we don't have the incentives to have property turnovers. We don't get the property tax. I'd like to see the underlying dirt value of the current ownership of the various parts of Davis and just personally hearing people that live like in East Davis, they don't come downtown because there's no place to park. They go over to Target where they can park for free. So it's a conundrum and it's a lot more complicated in California. I'd like to see the full data on that. I put Oregon up here just to have fun with you. A, it's not that complicated here. B, what you all did when you passed that in 1979, unbelievably dumb. And it spread like wildfire through the country.  Different states have different measures and different ways of doing propositions. The most insane one that I've seen is here in Oregon. So you've mentioned something that's actually a remedy, which is when there's a transference, it foists the burden onto the backs of the new people in town. Patently unfair. In Oregon, they don't have that.  How awesome is that? It's unbelievably dumb. I mean, they took Prop 13 and said, how can we mess this up? Let's make it really messy.  Just let buildings burn down. That would be better for your city. You know, and it's crazy. And then they've got growth boundaries. They have all the same stuff that y'all have, but they have this really unbelievably bad quirk. Now you guys are going through a Prop 13 amendment. I guess this year you're considering putting it on the backs of commercial properties. Why? Shouldn't you all participate in that too?  Why should the commercial have this extra burden put on them? Yeah, it's politics because y'all are taxpayers and y'all have homes and you wanna pass that burden onto somebody else because right now you have a very inequitous system that, well, actually, let's talk about equity. Same problem, different state. This is Florida. Florida has a similar measure that restricts residential home ownership and there's a benefit that's given to the longer term residential person. What I love about Florida is it's incredibly vapid, super obnoxious. They love rich people. And once a year they do these newspaper articles. This is from the Fort Lauderdale Sun Sentinel where they're bragging about these mansions. And these are the tax bills that these mansions pay. This one mansion up here pays a million dollars in taxes. It's got a separate red and white tasting room. I don't know what you do with a blush or a rosé, maybe meet in the hall. This one's got two mansions because you don't wanna be in the same mansion with your partner. You wanna move them across the street over here. This one's got a golf course cause you know you need a golf course on the ocean. But you know me, I'm an apples to apples guy so we're like, this isn't the norm way to look at it. Let's do it per acre. These are the numbers. So actually the smallest one is the most productive. So let's rearrange them based on potency. And the golf course is the lowest one. The double mansions in the middle of the road, this is the most productive. So let's go from them to the great unwashed. Those of us in the 99%, the multi-dollar mansions. From middle income, this is a poor black neighborhood in West Palm Beach. I used to be the zoning administrator here. I've never seen such poverty in my life. This house is the size of a parking space. She's paying about $1,000 in taxes, right? So that house right there. But again, that's their total tax bill. Per acre, this is what they're paying. I know you don't remember those numbers. Let's go back for a second. Let's take this guy right here, 77,000. And let's compare him. He's actually more productive than the golf course mansion. That's the numbers. He doesn't have an ocean view. He doesn't even have a yard. He's got a jacuzzi sitting there, right? What's even more awesome is he doesn't have a street. He's on the oldest block in Palm Beach County. He's got this thing called mango promenade that's literally a sidewalk going through the block. So he doesn't have infrastructure either. He's productive, right? Let's go to these things, townhouses. In lots of communities, you have to give your firstborn to go through a process to try to get these things built. But look at the taxes they're paying. That's what they're paying. Here's per acre, they're crushing it. $400,000 an acre, $300,000. It's like more than the double mansion. So these are more productive. They have less infrastructure. They're gonna increase, or decrease trips in your community, produce you more wealth on top of it. So this is usually where I stop.  We grabbed the Medal of Honor recipient, this guy. And so here he is, this is his market value. Here's his taxable value. So he gets a 50% haircut in his market value to his taxable value, right? That's just math inside the tax system, right? Wouldn't you like a 50% tax break? That's what he's getting. Let's go back to her, what does she get? Does that seem remotely fair? Again, it's math that's there. We tend to look at our own lot in life. We don't see where we're foisting that burden on others. At $33,000 of taxes per acre, she's actually more productive than Mar-a-Lago. It's math. So I guess back to your question, what I would ask is, I wanna see those numbers, and I wanna see what that change is gonna do to the commercial environment. But I don't think it's fair to just leave the residential out of it and say just assume that there's lots of transactions that are happening. It's like, you may, you may not, I don't know. But you can easily pull that data and see what the transactions are and see who's higher and who's lower. So we've got time for two more. Yes, my question has to do with the political implications of cities who haven't learned yet to do the math and haven't proactively pursued developers to build higher density cities to avoid urban sprawl. And when you have nothing but wall to wall developers beating on your doors to develop ag land that has no longer in Williamson Act, you end up with a political round circle that never seems to stop. So the question is, how do we change the political landscape so that it's, we invite developers to come bring higher density to avoid urban sprawl? Well, when I'd start maybe talk to some local developers and ask them about their experiences here, ask them for an unvarnished, what works, what doesn't, folks that have worked in other communities. I mean, you need people to build buildings. And particularly what's going on now, you've got the campus building all of this housing on their campus. We did a project in Gainesville, Florida and the director of economic development for the city. She's like, I don't want that stuff on the campus. It doesn't pay me taxes. I'm gonna find a place for that in my community. And she's done this growth plan to harvest wealth between the campus and downtown and she's filled in an entire neighborhood. She's maximized opportunities. So it's ultimately that development needs to happen somewhere. Where is it gonna grow?  But go say that to young individuals. Say that to people at the campus. How is that fair for the community to just pull up the drawbridge? And there's gonna be economic consequences to that. There'll be winners and losers and make sure you write it. But I think there's a deeper psychological problem of how we talk about politics and I put this slide up directly because it's a habit that we're in. This is the environmental movement and we all remember what the Coyahoga River caught fire in Cleveland, Ohio because it was polluted and tarred. That spurred this guy's book, Design with Nature. I don't know if you remember that book but it was, Ian McCard wrote this book and it's the grandfather of GIS. It's also all an economic study of the world, the planet, what we're living on and putting a number on it. But they even did development plans where they ran the economics in 1968 to show the value and to do smart growth. He even says, plan growth is more desirable and more profitable. So how have we not learned this 50 years ago? This guy did this book in 1973. I already showed you that too. We just shelved it. We're dealing with science, right? There's, I put this in here for you that you were talking about climate change in how to deal with this stuff. Yet meanwhile, it's too difficult to do things politically locally. We have to change that behavior. Our scientific talk has always been about physical in the natural world, the water system, the wetlands, permeable surfaces. Well, let's talk about the science of your behavior. This has got science to it too, right? And they're behaviors that notice stuff. These two guys won Nobel prizes. They're psychologists. They won Nobel prizes in economics because they figured out our brains and how they operate. There's a brain that we think we all use, which is the contemplative think-e-brain. But the reality is most of our decisions are an automatic stimulus response that we then rationalize data behind it for most of us.  We're behaving like Homer Simpson, you know? This is making most of our decisions. We're going after the donut, yet we tend to think like we're Mr. Spock or something. And we need to understand that. This guy won a Nobel Prize too. This is a book I'd highly recommend called Misbehaving, where he talks about how we look at the wrong thing. We tend to predict or think that there's economic arguments, but they're really irrational discussions. So that's not an answer to your question. I just want, there's a deeper, we need to understand the politics of this. But we also need to understand how humans respond. But I would reward the thing that makes, makes the thing that you want easier to get, right? So if you want to have density and you want to have mixed use buildings downtown, make that easy. One last question. Who's got a burning question? All right. Hi there. I'm an economist, so I appreciate the shout outs that they learned, Kahneman. I was glad you ended on do the math, because I actually had some questions about the math and some of the assumptions that you're doing in there. In particular, when you're looking at this shoe shop, and then you're, and particularly essentially the measure that you're using of this tax dollars per acre. And so when you're looking at something like this shoe shop, as sort of an artifact of that measure that you're adopting, because it's a very small place, you are likely to, as just an artifact, you are going to have a very high valuation because you've essentially compressed it. So I mean, to me it seems like this is an argument for density, which I think is a very reasonable and rational one. But in your model, it seems like the assumption you're actually making across this model is that those values are gonna be constant across densities and that that can essentially be replicated. So when you're looking at with these downtown values per acre, it's not clear to me that you could actually just replicate those values that you're seeing uniformly if you just increase density uniformly, because it seems like there actually is a, at some point there must be diminishing returns to densification and growth. Does that work that way in Boston or San Francisco? Is it diminishing returns in Paris to be denser? You used a word that I kind of like I bristled a little bit when you said my assumptions. We do this magic stuff called going to your assessor's office. We don't make any of this up. We grab the assessor's files and then we grab your shape files, which are boundary shape files that your community has. These are fixed geometries. We take one and divide it into the other. We use fifth grade math. So it is what it is. The data that we have is a data that we have. I can show you that same, we call them the little Lebowski overachievers, these little tiny buildings that are crushing it in tax value because our assumption is to look at the total tax bill and not understand it at a productivity level. So yes, it's valuable because it's hitting every square inch all four corners of its property. It's a 100% density object. Density does reward value when you have a lot of stuff on the site. When you start to spread or put a little building on a big parcel, you get this bonus that's baked into the math of the more land you use, the lower the value, because that's where the assumption is, which is that if you're not using your real estate, it's not worth anything. You're being taxed on how you use something, so there's a perversity to underuse the real estate. Yet how much planet can we have? So in Ontario, they actually just passed a legislation, just passed legislation, that you are no longer taxed on how you use land, you're taxed on your potential opportunity of the land. Have you ever heard of Henry George? That's straight up Henry George. Anybody heard of Henry George? Got a couple. So Henry George was a tax economist from the 1800s, and he came up with this concept that why should we tax on your productive use of the real estate is? Because now if I built a granite building next to your wooden shack, why am I taxed more than you when you're right next door? When I've made an investment that's gonna last generations in my community architecturally, and you've taken advantage of the system and just built this wood hut economic advantage for you, right?  Meanwhile, the cost of society is going up all around us. That seems patently unfair. Spurred a whole movement in a country called Georgism, there was like Georgia's conventions where they wanted to change the economic system because they thought it was more economically fair for people. If you want to wasteland and sit on it, great, we're gonna tax you through the roof and you can sit on that land all day long, but why should you be able to bequeath that land to your kids? And meanwhile, we all have to suffer. Elizabeth Maggie Phillips was a Georgist. I love her eyebrows, but she invented a board game that teaches Georgia's theory. Look familiar? So how do you win? Now, it's like there's lots of things baked into the math of how assessment works. I would ask you and challenge you to go a little further upstream. You're gonna be taxed more based on how transactions operate in the community. And assessors have a really hard job of figuring that out because I don't know, if I need a show of hands, who bought property and did a very, very rational, cost-benefit analysis before you bought your house? A couple people, I mean, I was trying to solve an argument with Max's wife. We're just like, that one works, let's go for it. And we paid way too much for that real estate. So when you have your rational actors in the marketplace making purchasing consequences, is it really truly what the market wants? Are they really truly paying pull of market price? I would say let's just get past that and figure out how much it costs to service the property and send somebody a bill for that. And if they're underprivileged or have low wealth, give them a little discount. They have to show their income. But to have this wildly arbitrary process where we just build a city and then we're just like, well, we gotta figure out how to pay for this. Then we put all these constrictions in the supply where just because you've been here a while, you could a tax break.  Like I could have a, there's a great article in the Los Angeles Times about Bo Bridges. Giving his son Jeff Bridges a house in Malibu. And he's taxed on it at like 1960 value. That's measure 50. Do you have a house in Malibu that you can rent out to people and pay like $1,000 in taxes a year right on the ocean? This isn't outside your tax system. So there's lots of weird economic stuff going on here. We're just trying to get you to see that there's math happening. But that house, that little building, we can find little buildings in every city that are crushing it like that. What I'm showing you is that that thing that's further out is wasting your real estate and you have more infrastructure that go to it. So yes, that assumption is that land is finite for me. So how you use the land can make another planet. You guys have a growth boundary. You're gonna have properties inside your growth boundary right now that are under productive. The real simple question to ask, do a simple query where the building is worth less than the dirt that's under it. Just make that map. You've probably got, I don't know, maybe 100 acres of land in around your core area. That's stuff where you're financially upside down right now. So there's lots of things you could do. So our time has run out. In fact, we've run over about 10 minutes. So I think the first thing to do is everybody, one last round of applause for Joe Minna-Kazi. Wonderful presentation. And I've been asked to point out that there are two other events coming up for Futures Forum on March 23rd. There's an event building better trees in a paved world on April... Let's see, I need the reading glasses. On April 23rd, Rick Call, who's a new urbanist, will talk about 30 years on the cutting edge, density and livability in our cities. Thank you so much for coming.