Smart growth and economic vitality.

• Author: Boyle, Brenda
• Position: Economic development with environmental sustainability

New urbanism, smart growth, or sustainable economic development--whatever they're calling it, local governments across the country are starting to consider the environmental impact of growth and development, and factoring these concerns into their planning and economic development framework. The emphasis is not on trying to limit growth, but on using smarter growth strategies that will not only be more sustainable over the long term and have less negative impact on the environment, but will also enhance economic vitality in communities, cities, and regions.

"Smart growth is a development strategy that is environmentally sensitive, economically viable, community-oriented, and sustainable. It is an approach to land use planning that promotes compact, transit-oriented urban communities that are attractive and livable" Smart growth is closely tied to sustainable development, in which communities "seek to balance environmental protection, economic development, and social objectives to meet the needs of today without compromising the quality of life for future generations." (1)

Traditional development patterns spur urban sprawl by favoring low-density development far from city centers and by failing to invest in existing buildings and infrastructure. Communities across the country are beginning to recognize that sprawl is not likely to be feasible or beneficial over the long term. Although not necessarily opposed to growth and development, concerned communities are "questioning the economic costs of abandoning infrastructure in the city, only to rebuild it further out" (2) In response, smart growth initiatives are reinvesting in city centers, providing a variety of housing and transportation options (pedestrian, bicycle, bus, train, and automobile), preserving natural areas and open space, and forming mixed-land-use zoning regulations to bring stores, schools, offices, and parks closer to residents' homes. The benefits are well-planned communities that have a unique sense of place and a thriving economy.

Smart growth has arisen through collaborations among government officials, planners, architects, engineers, developers, community activists, and environmentalists. Since smart growth is closely tied with the concept of economic development, government finance officers should be aware of its implications. Sustainable economic development and smart growth, in fact, may have the potential to increase a governments' economic vitality, as traditional development methods become stagnant and less effective. As a representative of a national research institute said: "Environmental policy has emerged as a central organizing principle of economic growth at the metropolitan level in America. It's a very new development, and it's logical. Being more energy efficient and more environmentally sensitive lowers costs and makes metropolitan regions better places." (3)

POSITIVE ECONOMIC IMPACT

Smart growth is a new strategy for enhancing economic vitality and increasing the tax base. According to Frank Benest, City Manager of Palo Alto, California, "Smart growth ... has a powerful tangible impact on expanding a community's economic base, increasing local government revenue, reducing infrastructure costs, and bringing diverse interests together around not only an improved standard of living, but a far healthier quality of life." (4)

Smart growth can have a positive impact on the economic performance of a city or region. In times of financial crisis or difficulty, governments need to be able to manage growth and development in a fiscally responsible and efficient manner to stimulate or sustain local economies. As traditional economic development strategies and methods become stagnant and less effective, smart growth practices can benefit local and regional economies and government finances by: 1) saving the government money, 2) making the government money, and 3) investing taxpayer dollars wisely

Save the government money. Smart growth has the potential to reduce infrastructure and service costs for governments because of economies of scale in higher-density neighborhoods and urban city centers. (5) Developments with lower population density often have higher service costs because there are fewer taxpayers in an area to pay for roads, utilities, police, etc. Sprawling communities also require ever-increasing infrastructure, while high-density locales tend to have lower per capita infrastructure costs. As more residents begin to settle in city centers or in compact towns and older suburban areas, the marginal costs of serving the population decreases, creating beneficial economies of scale. Making more efficient use of its resources allows a government to do more with taxpayer dollars.

A 2004 study projected that governments practicing managed growth from 2000 to 2025 can reduce road building costs by 11.8 percent, water and sewer costs by 6 percent, and recurring operations and maintenance costs by 3.7 percent. (6) In fact, in 2002, the Minneapolis-St. Paul Metropolitan Council estimated that smart growth techniques could save the region...