Smart Growth is Smart Business This report shows how business leaders are supporting smart growth policies and projects, and puts forth five key smart growth business actions. This report profiles 17 business groups that are profiting while revitalizing communities and improving livability across the nation. Quality of life, reinvestment in established communities, business involvement in regional growth management, and long-term investments in smart growth projects directly affect the bottom line. Many companies and whole new business sectors are now engaged in smart growth. Business leaders are reaping the returns of smart growth strategies. This report shows how building better communities boosts the bottom line. Smart Growth is Smart Business: New report! Free hard copies available - order yours today

Although the urgency rises during boom years, smart growth never makes more sense than when economic times are tough. Smart, efficient development decisions save taxpayers money and allow governments to stretch their dollars farther, even as they make it possible for households to spend less on expenses such as transportation. And there is mounting evidence that metro areas with smart-growth attributes – healthy central cities and inner suburbs, excellent transportation networks, vibrant centers and neighborhoods – have stronger economies.

In region after region, forward-thinking business leaders are recognizing this fact and pressing for smart growth policies, even as unions are awakening to the stresses that sprawl puts on their members.

SAVING TAX PAYERS MONEY AND PRESERVING TAXBASE
HOW SMART GROWTH STRENGTHENS REGIONAL ECONOMIES
LABOR’S SUPPORT FOR SMART GROWTH
EXPANDING CONSUMERS PURCHASING POWER WITH SMART GROWTH

Saving taxpayers’ money and preserving the tax base

Because it makes the most efficient use of taxpayer investments in roads, water and sewer systems and services from police to fire fighting, smart growth stretches taxpayer dollars farther. Numerous studies have affirmed this to be the case.

Among the most recent was a five-year study by researchers at Rutgers University and the Brookings Institution that found the nation could save hundreds of billions of dollars and preserve 4 million acres of land over the next quarter-century by channeling development into existing urban areas and compact new towns. All this could be done without sacrificing the American dream.

The five-year study, conducted by researchers at Rutgers University’s Center for Urban Policy Research and the Brookings Institution, argues that the savings could be realized by employing “smart growth” strategies to channel new development into dense centers and existing cities and suburbs.

In November, 2002, Federal Reserve governor Edward Gramlich cited another study by the Research Institute for Housing America in telling Fed-sponsored conference that smart growth strategies could save $250 billion in infrastructure costs over the next 25 years.

“Fix it first”

Even as we’re overinvesting in subsidizing new sprawl development, we’re dramatically underinvesting in maintenance, repair and upgrading of infrastructure in existing areas. This is economically unsustainable in the long haul, notes Prof. Robert Burchell, the author of the Rutgers study.

As tough times linger for state and local governments, more and more officials – in states from Massachusetts to Pennsylvania to Tennessee — are abandoning traditional subsidies for sprawl development and adopting a “Fix it First” policy. Where they are undertaking new capital projects, they are insisting that hard-won infrastructure investments go as far as possible.

Instead of letting the recession extinguish the debate about growth, many communities are taking advantage of today’s conditions to gain an upper hand over sprawl. They’re investing in sensible economic development, preparing for future growth, and properly accounting for and deploying the scarce resources they possess. When rapid growth returns, they’ll be ready.

Preserving and expanding the tax base

When economic vitality departs existing areas for sprawling new locales, remaining taxpayers suffer a double whammy declining services and rising tax rates, even as residents of the receiving areas see their taxes rise to accommodate new growth.

By emphasizing strategies such as the revitalization of depressed areas, the reuse of aging buildings, redevelopment of dying strip centers and development of vacant and abandoned properties, smart growth builds the tax base for the benefit of both city and suburb dwellers.

A prime example is the cleanup and use of “brownfield” industrial sites. Smart Growth America and its coalition members worked hard to help President Bush pass a federal law to promote brownfield reuse in 2002. And there are additional benefits to this approach: In his signing ceremony speech, President Bush argued that “every acre of brownfield that is redeveloped saves 4.5 acres of open space.”

How smart growth strengthens regional economies

Smart growth is critical to the longterm economic sustainability of metropolitan regions.

When employers can’t recruit a reliable workforce because of grueling commutes; when working parents can’t find housing that puts them within reach of both jobs and their children; when key industries are scattered randomly so that they have all the disadvangtages and none of the important benefits of aggregation; when quality of life begins to erode – people and businesses leave and economies decline.

Beyond that, however, there is growing research demonstrating that productivity and overall economic performance are improved when smart growth elevates regions’ employment density, improves transportation efficiency, and reduces city-suburb gaps in economic health.

The following evidence is summarized from a forthcoming paper from the Brookings Institution:

A study by Ciccone and Hall (1996) found that workers in the ten densest states were 25 percent more productive than those in the least dense states. They attributed most of the difference to the density of economic activity, rather than other factors, such as population size. In 2000, Robert Cervero confirmed these findings and extended them, demonstrating that compact, “accessible” cities with efficient transportation links were more productive than more dispersed places. That same year, Nelson and Peterman demonstrated that metropolitan areas that practice growth management actually can improve their economic performance relative to other regions. They found that restraining sprawl can yield sufficient taxpayer savings, efficiency gains, and quality-of-life benefits to boost economic development. At the same time, a 1998 study showed shown that, to the extent smart growth revitalizes urban centers and reduces core distress it also benefits the entire regional economy. It found that shoring up older urban centers—as smart growth attempts to do—can build wealth for entire metropolitan areas, city and suburbs alike.

Community character, quality of life and the “creative class”

Richard Florida, author of “The Rise of the Creative Class” offers yet another argument in favor of the kinds of communities smart growth aims to produce. According to Florida, metropolitan regions that are mostly placeless sprawl lacking in vibrant centers of urbanity are competing poorly in the changing economy. In a recent article for Washington Monthly, he writes:

“In all parts of the country, some regions are moving toward higher creative growth (Austin, Boston, Minneapolis-St. Paul, Denver, Portland) while others become mired in either slow growth (New Orleans, Grand Rapids, Buffalo), low-end service-economy growth (Las Vegas), or no growth at all. Those in the first group are emerging as the clear overall winners in the new creative economy.

What’s driving this split is a massive flow of human creative capital. My research finds mobile, demanding creative workers migrating to certain kinds of places they favor: places where they can find not just “a job” but lots of opportunities, and where they can find participatory amenities—active outdoor sports, not just stadiums; café-and-gallery “street-level” culture, not the symphony. They also seek places of demographic diversity, openness to newcomers, and stimulating cultural interplay. And the catch is, such regional qualities tend to be self-reinforcing. A region with many creative industries and creative-class workers will thus attract more of both, while the losing regions—well, they lose them.”

Labor’s support for smart growth

In the last couple of years many union leaders have come to recognize the negative effects that sprawl is having upon their members.

Anti-sprawl resolutions have recently been adopted by the national AFL-CIO, by one of its largest affiliates, and by a state labor federation. One union — the 1.4 million-member United Food and Commercial Workers Union (UFCW) — knows the sprawl issue because of its long antagonism with virulently anti-union Wal-Mart. And a few unions that represent public transit workers, especially the Amalgamated Transit Union, have long advocated for transit service.

For more see, Greg LeRoy’s, “Smart Growth: It’s a union thing.”

Expanding consumer’s purchasing power with smart growth

The following is an excerpt from a December 2002 story in The Atlanta Journal Constitution headlined “Transportation Outstrips Housing in Costs”:

"As bigger and cheaper homes pull people ever farther from their jobs, they pay the hidden sprawl price in commuting costs, not realizing or not caring that the combined cost of owning and operating a new car was put by the American Automobile Association at 50.2 cents a mile, including loan interest, tax, registration, insurance, gas, maintenance and depreciation.

According to U.S. Department of Labor 1999-2000 data, annual household spending for transportation has reached $7,118, compared with $7,114 for housing (both 18.7% of total spending).

Although transportation takes a big bite out of family budgets, some mortgage lenders, including Bank of America, gloss over its impact on borrowers’ cash flow. Not the Federal Home Loan Bank of Atlanta, whose chief economist Richard Fritz stresses the need to ask not only ‘’where people are going to live and can they afford it,’’ but also ‘’where they are going to work and can they afford to get there?’’ Consumer driving needs are also important to many car insurance companies that offer low-mileage discount rates, in the case of Allstate Insurance Co. for driving fewer than 7,500 miles a year.”