Subsidies for Suburbs

I was looking around online and found an interesting post about subsidies for suburbs. Since Det_ard brought it up in the regionalism thread, I thought I'd post it here in hopes of avoiding a derailment.

There isn't a line-item in the federal budget that says "Direct Subsidy to Prop Up Suburbs," it is a collection of funds from a collection of sources. The biggest subsidies are loans and highways. Highways were federally-funded expenses that made most auto suburbs possible. Prior to the highways, suburban developers had to provide a means of transportation from their suburb to the downtown neighborhood. Once the government got into the roads and highways business, the private industries that provided that transportation could no longer compete.

Government-backed loans--FHA and VA being the biggest and best-known--changed the rules for mortgages. Instead of paying 50% down and borrowing 50%, these government programs let people pay 3-5% down and borrow 95-97%. But almost none of these loans could be used in existing city neighborhoods--they could only be used in new-growth areas, which were all auto suburbs. Urban neighborhoods and non-white neighborhoods were redlined: they were considered too high a credit risk and could not get these government-mandated and subsidized loans. In order to avoid becoming credit risks, suburban neighborhoods often prohibited non-whites until those laws were declared illegal in the 1960s--although redlining was still on the books until the 1970s.

Accelerated depreciation promoted commercial developers to build cheaper, less permanent commercial buildings in suburbs, using a tax structure that discouraged long-term investment and permanent buildings and rewarded building cheap strip malls, maintaining them until depreciated enough, then building a new set farther out.

Utilities were subsidized by government programs: federal clean-water programs hooked up suburban neighborhoods to city water, and rural electrification programs connected them to the electric grid, with large federal subsidy.

Gas subsidies, in the form of tax write-offs, oil depreciation allowances, Department of Energy expenditures in oil exploration research and other technical assistance, made gas cheaper and made living farther out in the suburbs more economical as travel costs were kept artificially low. Government worked hand in hand with the oil and auto industries to this end, connected together by the highway lobby, an alliance that destroyed the privately-owned railroads and streetcar companies.

Another subsidy is harder to quantify: Suburbs often make great efforts to avoid taking care of social problems. By simply lacking low-income housing by not building any, and lacking things like homeless shelters, mental health or alcoholism treatment centers, or other undesirable land uses, those in the suburbs who need such services are pretty much required to leave that suburb and head to the nearest major city. Cities generally can't get out of having to provide these services, so in many ways they end up having to shoulder the responsibility for the region's problems, but are not compensated by the adjacent communities who benefit.