Wednesday, March 7, 2012

Billboards Are Bigger Than You Think

Billboards confer an economic advantage to an area. The existence of billboards creates tax dollars and increases visibility of local businesses. As a form of advertising there is a lot of value in their economic contributions to a local area.

Or is there? What is the purpose of a billboard? What are the benefits of having billboards? Do the benefits negate the costs? If you want to save five minutes, the short answer is no.

Billboards do not exist in a vacuum. Their existence in a local region makes them part of the community. The businesses, although they are giant multi-national corporations, pay taxes and participate in the public process.

That is largely the extent of the benefits of a billboard. Those who advertise on billboards get some peripheral economic gains from purchasing a sign but certainly it isn’t the only form of advertisement in the region. Think about that for a moment. If all the billboards in the country disappeared would people still know where to go to get the biggest burger in town? How about the best place to get a lap-dance? Or maybe to see the next big action flick?

The truth is that with the rapidly expanding role of the internet in our lives, a billboard in the modern era is becoming increasingly obscure. Social review sites like Yelp are erasing the economic benefit to advertisers on billboards.

In terms of an economic argument, that leaves only the tax dollars that the companies pay on the property that the billboard sits on. Those tax dollars go to the cause of essential public services like fire, roads, police, emergency medical services, and social programs. The taxes the billboards pay have a positive economic effect then.

Well, not exactly. Billboards decrease the property values of nearby parcels. Billboards actually immediately reduce the tax revenue of nearby properties. If a property is appraised at a low value, the corresponding taxes are similarly low. And the cycle is just beginning. Low property values encourage low quality establishments. Sure there are plenty of examples in the news of high quality establishments arriving in beat up neighborhoods. But that’s precisely why they are in the news, because they are the exception to the rule.

When the rule for properties around a billboard is low quality and low value then the instance of concentrated poverty goes up. Concentrated poverty is the densification and clustering of low income housing and businesses tailored to low income households. Basically, clumps of really poor people.

It is a well documented fact that the majority of problems correlated with poverty arises in instances of concentrated poverty—and only concentrated poverty. That means that instances of drug abuse, graffiti, assault, robbery, auto theft, prostitution, and a myriad of other issues are prevalent in areas of concentrated poverty.

In areas such as Baltimore where housing policies have encouraged diverse economic classes to live next door to each other, there has been a significant drop in correlated crime. That means that only where there are clusters of economically disadvantaged do the worst effects of poverty take effect.

And when there are clusters of one economic group, there are businesses that similarly cater to said demographic. In layman’s terms, the discount cigarette and liquor store follows. This creates a perpetuating cycle where poverty follows poverty. By now, the properties around the billboard have all lost a lot. And they are about to lose a lot more.

Billboard companies happily advertise for whoever puts up the cash. In areas of concentrated poverty, such as the neighborhood that is rapidly deteriorating with the addition of a billboard, liquor and cigarette advertisers like to advertise their goods. In fact, alcohol and tobacco intentionally target these areas because there is such a high instance of addiction in poor neighborhoods.

One billboard can severely limit the upward mobility of an area. Think, no one puts a mansion under a billboard and no one puts a billboard in a neighborhood of mansions. Billboards are thus an economically limiting factor for a given neighborhood. In fact, they are excellent predictors of nearby crime as exhibited by their propensity to perpetuate an economic condition.

Add in the morally questionable way in which billboards fail to discern the larger impacts of the advertisements they hold and their benefits are erased. Inner city communities have been arguing this for decades. They have argued that billboard advertisements for booze and cigs have perpetuated many of the woes of low-income neighborhoods.

And it is important to remember that these are neighborhoods. Plenty of children grow up in areas where they look up at ads for cheap spirits on their way to school. Ads where Bud Light and attractive women lounge around are far more numerous than billboards that advertise college degrees.

It is no surprise then that crime starts to climb while education levels start to dive in these areas. Down the road this leaves the taxpayer with a fairly large burden: extra police services to try to tamp down crime; extra costs to maintain the prisons that house the criminals that are caught; extra social services to deal with high rates of poverty; lost productivity from kids that grew up without motivation to get higher education; and on and on.

A billboard is a social injustice. By the time the greater social costs are factored in the measly tax dollars that come from an enormous metal sign on a sliver of land are completely erased.

A billboard alone can have a negative effect; now add whole sections of a town where billboards are on nearly every block. This is a reality that many cities face. But regulating all of these billboards would be an unnecessary interference with government. It would be against the small government mentality of a libertarian-minded state like Nevada. But not quite.

“Don’t tread on me,” the Libertarian philosophy states, “keep my government small.” And with billboards that seems to be what has been done. Many local governments have largely given free reign to the billboard industry to craft and implement their own rules regarding signage. Which is a very libertarian way of doing things—government out. But the libertarian philosophy has a second component that is usually lost in the blaring accusations of “big government!” That component is that government does have a role to step in when its citizens are harmed. Government—even in a very individual-centric perspective like libertarianism—has an obligation to protect its citizens from harm.

It’s the same reason everybody pays for roads, fire, police, etc. And when billboards have such a vast and negative effect it is hard to see why there isn’t a more stringent approach to siting billboards. A billboard’s existence keeps tax-dollars away from the local government while simultaneously boosting the services that are required by that government. This forces cities to take on debt. Similarly the lost potential of the children that grew up around that billboard contributes to the stagnation and collapse of an entire region.

To put it mildly, billboards aren’t very good. Billboards, while certainly an industry, are nevertheless detrimental to individuals, communities, and governments. They harm citizens by perpetuating toxic environments. They harm communities by locking whole areas into concentrated poverty. They harm governments by destroying positive revenue streams. To believe that a billboard can always be a positive thing for a community is to look right past the glaring societal problems that we as a nation face everyday. To not consider those factors when formulating legislation is to look at the world through a pinhole.