Thursday, June 28, 2012

Stockton, CA - Broke

If you haven't heard, Stockton, CA recently became the largest American city to declare bankruptcy putting a fire sale on virtually all city assets.  While this may belong to the state of California, I have an idea where to start:

Stockton boomed for the ten years of cocaine and steroid fueled housing euphoria, but alas it has come back to Earth, as things are wont to do when those evading the high prices (and taxes) of the bay area sought browner(?) pastures of affordability at the sprawling edge of an agricultural community well over an hour from where many worked.  Perhaps unsurprisingly, given their current fiscal status, the local property tax rate + county rate is pretty shockingly low.

Much of the blame has fallen upon the waterfront redevelopment scheme.  It's an appropriate target.  Waterfronts AND the two stadiums built on it were sucker bets.  Both can serve as cherries on top, but not the foundation of economic development.  The result: broke.

The city is remarkably in tact form wise, except for the leapfrog development of the most recent housing bubble.  That, and some underdevelopment and seemingly flagging industrial along freight rail lines and the waterfront.  I'll try to put together a map showing the new development from last ten years with underdevelopment.  Should be illuminating.

While selling off the Right-of-Way under state highway CA-4 doesn't do much to guarantee demand for the development that could theoretically replace it, selling the land off at a quarter on the dollar ensures a level of affordability + proximity to amenity (and a train station connected to San Jose) that the sprawling edge can't provide.  The edge has affordability (now), that is, if anybody is still living in them (or ever were).  It will make the place more livable while being affordable, which not too much of California can provide both.  It's a start.

I have some rough financials that I'll try to assemble tomorrow.  But after running them, I can't see how Stockton can possibly maintain their low tax rate in combination with low density and high infrastructural burden.  In other words, sell off the burden.