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Smart city solutions: Making the business case

Submitted by jesse_berst on May 21, 2013
Everywhere I go I ask about the obstacles to smart city progress and the best ways to overcome them. If I had to pick a single roadblock that is named most often, I would choose "making the business case." The industry is still not doing a good job giving cities tools to prove the return on investment.

That's why I thought you might want to see how Smart Growth America has approached that problem. I must caution you that this organization, which is a member of the Smart Cities Council Advisory Board, uses "smart" to mean land use planning that puts housing and transportation and schools near to job centers. It seeks to end the suburban sprawl and commuting nightmares of bedroom communities.

Smart Cities Council uses "smart" to mean the application of digital technology to improve livability, workability and sustainability. But even though this report does not apply directly to smart cities as we define them, the methodology certainly does. Take a look at the great job this organization has done to document the economic benefits from the approach it promotes. And then ask yourself how we could do this kind of thing in behalf of digital technologies. -- Jesse Berst, Smart Cities Council Chairman

Cities will typically compare development strategies to understand how they might impact their finances. And many municipalities, suggests Smart Growth America (SGA), have found that a smart growth approach will benefit their bottom line – whether by saving money upfront on infrastructure, reducing the cost of ongoing services or some other means.

But until now, the organization says, there has not been a national study that examines these savings as a whole. That's what SGA's new report -- Building Better Budgets: A National Examination of the Fiscal Benefits of Smart Growth Development – sets out to do. The report surveys 17 studies that compare different development scenarios, including a new one of Nashville-Davidson County, Tennessee which was commissioned specifically for the report.

You'll want to read the full report for details on the revenue potential and costs associated with smart growth development versus conventional suburban development. But according to SGA, key findings when comparing the two include:

  • Smart growth development costs one-third less for upfront infrastructure.
  • Smart growth development saves an average of 10 percent on ongoing delivery of services.
  • Smart growth development generates 10 times more tax revenue per acre than conventional suburban development.

SGA notes that municipal leaders can use the information in the report to make better fiscal decisions about development, noting that the findings are true for any rural, suburban or urban community anywhere in the U.S.