Thursday, February 6th, 2014

A Road Privatization Plan That Makes Sense

I’m a little late to the party on this one, but wanted to chime in on Long Grove, Illinois’ proposal to privatize residential streets by vacating them and turning them over the subdivision owners to maintain, either via a homeowners associations or special service districts.

This has been presented in some quarters as the cost of sprawl coming due, but I wouldn’t spin it that way. Long Grove is an affluent community and doesn’t even levy a property tax at all. Clearly the village has a the fiscal wherewithal to afford to maintain these roads.

Rather, I see this as intelligently recognizing the fact that the roads are already private. Many subdivision streets effectively serve no public purpose to anyone outside the development in question. Why should they then be paid for out of general taxes anymore than private driveways are? Indeed, the village actually wised up long ago and decided to no longer accept subdivision streets into its inventory. As the linked article above from the Chicago Tribune put it:

Local leaders first realized in the 1970s that to pay for maintaining roads without a property tax, something had to give, said Long Grove Village Manager David Lothspeich. After that, the board allowed public streets in new subdivisions only if they were main roads, and eventually entire subdivisions sprang up without a single public road, he said.

The article also notes that private roads are what allows gated communities, something that actually has proven a selling point. I didn’t see in the article whether or not the developments in question would be able to erect gates on their newly privatized streets, but why not?

So much of the traditional sprawl development is based on backloaded subsidies for things like street maintenance. By establishing up front that these de facto private roads are in fact actually private, and forcing the cost of maintenance, snow removal, etc. onto the private beneficiaries, we can start getting close to the true market cost of these houses.

Topics: Public Policy, Strategic Planning, Transportation

7 Responses to “A Road Privatization Plan That Makes Sense”

  1. AIM says:

    This sounds good in theory but what I’ve seen in practice is that these roads get neglected because of the cost of properly maintaining them and overhauling them at the end of their service life. Homeowners don’t want to pay now for a future long-term cost and when the bill finally comes due, no one wants to pay it. As the streets go to pot(hole), it can negatively impact property values and you get into a vicious cycle of declining property values and the inability to finance the needed improvements. I can show you numerous examples in southeast Michigan of dirt road streets in areas that urbanized decades ago because of the inability/unwillingness of homeowners to finance paving the street. Plus, properly replacing a street that’s beyond its service life is a very expensive proposition and often beyond the financial capabilities of a local homeowners association because it requires decades of prudent financial stewardship to amass the funds necessary to pay for the repairs.

  2. Ian Rae says:

    A very interesting tragedy of the commons situation. To give some numbers: our rural county has 800 km of roads, which need paving roughly every 20 years. That’s 40 km per year at $100,000 per km. So 4 million bucks a year in road maintenance.

    I’m not sure if suburban streets with curbs and sewer grates would be more or less expensive, but a small subdivision with 4 km of road might be looking at 20,000 per year.

  3. Matthew Hall says:

    How do we get people to pay the cost of the widened roads and interstates without which their property would have not been built in the first place?

  4. John Morris says:

    Maybe we don’t build them?

  5. Matthew Hall says:

    They’re already built. Do we let them crumble until they can’t be used?

  6. John Morris says:

    In many cases, that is the best policy. This is the classic issue left by non market planning. Since the roads were not built according to rational market inputs, its hard to sustain or privatize them.

  7. Peter Javsicas says:

    Do we really want to facilitate the proliferation of gated communities? This isn’t about the Commons; it’s about the Enclosures – a further step toward expanding the gap between the rich and everyone else. How could such a subdivision “pay for itself,” when the costs of its existence extend far beyond its physical boundaries? The subdivision doesn’t exist in isolation, but is interdependent with surrounding areas in terms not only of land use and transportation but politically, socially, economically and on and on.

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