I’m an engineer, so I’m burdened with way too much knowledge in some realms and not enough in others. This was especially true when I did these analyses roughly 15 years ago. For example, how much does a street cost? Well, that depends on the width of the street. It also depends on the depth of the surfacing material, whether that material is bituminous or concrete, the quality of the materials that have been specified and the time of year it is constructed. It will also depend on the quality of the base material—is it built on forgiving sand or on a swamp?—and how well the site drains. It will depend on how far materials need to be hauled on that particular site, the cost of transport at the time, the international market for asphalt, etc…

One can then look at the pipe. Is the sewer pipe installed extra deep, or the pipe upsized, in order to accommodate future growth? Is the water main given an extra loop, or increased in diameter, or provided with extra service connections, to accommodate anticipated new development? If the answer to any of this is affirmative, how should that extra cost be allocated? Where in the budget, and correspondingly where in the wealth of the community, is the burden for that cost placed?

I shared most of my early work with fellow engineers and it was roundly criticized on these kinds of grounds. Chuck, you can’t allocate the cost of that pipe to those property owners because the pipe is upsized for growth elsewhere. It was that kind of thing over and over. The only conclusion my fellow engineers would allow me to make was that the system was complicated, and everything was interconnected, so the only valid analysis was to look at everything at once.

Looking at everything at once, with the level of detail and knowledge required to satisfy myself and those early critics, was technically unfeasible (even in a small town). There is just too much happening, too many variables. So I started to think of the kinds of things that would be expected to happen if my beliefs were wrong. If cities were not becoming more prosperous due to the infrastructure projects I worked on, if they were becoming poorer, what should I expect to see happen? Well, I’d expect taxes to be going up (check), public debt to be rising (check), public budgets to be tight (check), growing backlogs of deferred maintenance (check), and basic services to be cut (check). I started to look at this kind of thing and the correlations became silly, like the way two financial analysts on CNBC look at the same numbers and draw completely different conclusions. They were circumstantial, but also multi-causal.

“It’s The System”

The conclusion people kept giving me was that “it was the system” I needed to look at. Sure, one project here or there might not have an immediate payback, but when the system was looked at as a whole, that is where the magic happened. It was as if each street that could be built, each pipe that could be connected, added magically to a growing and prospering whole. I started to call this the Quantum Theory of Economic Development, the notion that no individual component could be measured in isolation in a way that would be relevant to the rest of the system. I just needed to have faith in what couldn’t be seen, something my free market disposition made me inclined to want to do anyway.

I pondered the Quantum Theory of Economic Development for a long time until I realized that what I needed to understand it was an atom smasher. The proton colliders that have been constructed—atom smashers—smash two protons into each other to look at the debris. I once had them described to me as akin to scientists standing on top of the Empire State Building trying to figure out how a car operated. So they smash the cars together, look at the guts of what flies out, and try to see if they can reconstruct it. I would love to have been a physicist.

I realized that I could get to the base elements of a city by looking at its simplest components and drawing inferences from that. The simplest component of a suburb is a dead-end cul-de-sac. There is no through traffic. No commercial traffic. No upsizing for future expansion. No extra pipe or strange sizing or depth to accommodate future expansion. The cul-de-sac is, quite literally, the end of the line. The infrastructure in a cul-de-sac is as stripped down and simple as can be; it’s the bare minimum needed to make it work. If I could study the return-on-investment for cul-de-sacs, it would tell me a lot about what was going on in places where the infrastructure was more complicated.

And considering the investments we were making in others parts of the system to upsize and plan for future expansion, I realized that work was being done for the end result of getting the fully-developed cul-de-sac. In a suburban development pattern, the cul-de-sac is the gravy. It’s the cherry on top. Financially, if the Quantum Theory of Economic Development holds true, it should be the most profitable part of the system, the place with the most tax base for the least amount of cost.

The Humble Cul-de-Sac

At the time I was working through this, there was a maintenance project I was involved in presenting the ideal test case. It was 40 homes on a closed loop system and a dead-end cul-de-sac. No through traffic, no commercial traffic, and no future expansion. The street exists only to provide service to the homes along it; no homes and the street would be unnecessary.

A developer had built the street in the 1980s, a cost that was passed on to property owners. Those property owners paid that cost in their mortgage and counted it as part of their property value while simultaneously paying taxes to the city to maintain the street. After decades of use, the street needed a simple maintenance project. No large reconstruction; just basic maintenance.

The cost was $354,000. Again, because I’m an engineer, I’m going to emphasize that this wasn’t a full reconstruction project. It didn’t involve the replacement of any underground utilities. It was just a reclamation and resurfacing. Basic, basic maintenance.

I was able to get some assistance to calculate the revenue produced by these properties (I needed help because I didn’t know how—neither engineers nor planners have to know how to do this for their jobs). Annually, it was $44,473.