Smart Growth Cities Are Cheaper To Build And To Run

Want a solution to financial problems of cities around the country? Smart development.

Smart Growth Cities Are Cheaper To Build And To Run
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It stands to reason that if cities concentrate more people in an area, it’ll be cheaper to provide infrastructure and services, and you’ll generate more in taxes for the same size of land. But how much cheaper, and how much more revenue?


According to a new report from Smart Growth America–which advocates for more efficient use of land and “better connections” to jobs, shops, and schools–a lot more.

The report reviews 17 municipal studies comparing the impact of “smart growth development”, and “conventional suburban development–where homes, schools and businesses are spread out, and “designed primarily for driving.”

It finds, on average, that smart growth costs 38% less in upfront infrastructure (roads, water, sewers, libraries, and so on). For example, Champaign, Illinois, concluded that smart growth could save $52 million, or 42%, over 20 years.

Then, the report looks at the relative cost of services like fire, police, and ambulances. It finds a 10% saving, on average. Charlotte, North Carolina, for example, worked out that a “smart growth neighborhood” would cost a quarter of a conventional one.

And third, the report looked at the impact on tax revenue, finding that smart growth produces 10-times more tax revenue per acre, on average. You can see why from a study conducted by Raleigh, North Carolina. A mixed use six-story building brought the city $110,461 in 2011, while a 3- to 4-story residential building brings in only $26,098. A major out-of-town shopping mall brought in even less.

Smart Growth America reckons that about development pattern decision drive about one-third ($525 billion) of all municipal spending ($1.6 billion). So, more compact, better connected, cities could make a big difference.


That’s certainly what the report says: “The evidence … suggests improved strategies for land use and development can help local governments maintain and improve their fiscal solvency.”

And, it adds: “Every community can use these national figures to inform their decisions about whether to grow in different, perhaps more beneficial, ways.”

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.