For decades, if a community wanted to increase jobs, the go-to approach was to offer companies tax breaks and subsidies to relocate there.
This approach has lots of downsides. But perhaps the biggest problem for economic development officials now is that too often, this strategy simply doesn’t work.
Companies today are less interested in tax breaks and more interested in vibrant neighborhoods with affordable housing options, restaurants, nightlife, and other amenities in walking distance, and a range of transportation options for their employees.
If tax breaks were the old way to do economic development, creating great places is the new way.
On Tuesday, June 28, we’ll release Amazing Place, which details how six cities are using a place-based approach to economic development.
Transportation plays a critical role in connecting Americans and communities to economic opportunity. Today, we’re excited to announce a new project that will help people connect to public transportation easily, efficiently, and affordably.
The Transit-Oriented Development technical assistance initiative, a project of the Federal Transit Administration in partnership with Smart Growth America, will provide state and local leaders with new ideas, resources, and capacity for building transit-oriented development, or “TOD”. Well-done TOD takes advantage of nearby transit to create desirable places to live, work, and visit that feature amenities like entertainment venues, parks, retail, restaurants, an improved pedestrian environment and diverse housing choices.
You’ve read the research about downtown development. More and more Americans want to live in walkable, downtown neighborhoods, and companies want to locate in these places too. These neighborhoods generate strong tax revenues and have lower municipal costs per capita. And they are the often the heart of a town or region’s economic activity.
But one big question remains in your mind. How could my town do it?
(Re)Building Downtown:A Guidebook for Revitalization is a new guide coming out from Smart Growth America on December 14, 2015, and it’s a resource designed to be used by any community, no matter their size, to bring people and businesses back to downtown.
Earlier this year, Smart Growth America released a new model for analyzing the fiscal implications of development patterns. Since then we’ve analyzed development in Madison, WI, West Des Moines, IA, and Macon, GA.
For the latest installment, Smart Growth America teamed up with New Jersey Future to find out how much state, county and municipal governments in New Jersey could save on road maintenance bills by building in more compact ways.
The Fiscal Implications of Development Patterns: Roads in New Jersey analyzes population and employment density to understand just how much money could be saved if the distribution of New Jersey’s population and jobs could be made even incrementally more dense and compact.
Researchers at Smart Growth America and New Jersey Future took two distinct but related approaches to these questions. Smart Growth America partitioned the whole state into grid cells of equal size and then compiled data for each cell. Using U.S. Census data regarding population and employment, and the New Jersey Department of Transportation’s database of road segments, Smart Growth America’s researchers calculated the relationship between density and the road area per capita.
In 2010, global biotechnology company Biogen moved its offices from downtown Cambridge, MA, to a large suburban campus in Weston, 25 minutes away. In 2014, less than four years later, the company moved back.
“There is so much going on in Cambridge,” said Chris Barr, Biogen’s Associate Director of Community Relations. “It is such a vibrant place to live and work—it’s been a great move back for us.”
Biogen is one of hundreds of companies across the United States that have moved to and invested in walkable downtowns over the past five years. Our newest research takes a closer look at this emerging trend.
Core Values: Why American Companies are Moving Downtown is a new report released today by Smart Growth America in partnership with Cushman & Wakefield and the George Washington University School of Business’ Center for Real Estate and Urban Analysis. The new report examines nearly 500 companies that moved to or expanded in walkable downtowns between 2010 and 2015, and includes interviews with more than 40 senior-level staff at those companies.
The results provide an overview of why these companies chose a walkable downtown and what they looked for when considering a new location. The report also includes ideas for cities about how they can create the kinds of places these companies seek.
Actually, more than quadruple. It would generate 4.7 times the fiscal impact as development on the edge of town.
Back in April, we released a new model for analyzing the fiscal implications of development patterns. Since then we’ve analyzed development in Madison, WI and West Des Moines, IA.
Now, Macon, GA is the most recent city in which we’ve applied our model.
We looked at four scenarios of how Macon could grow over the next 20 years, and what each scenario would mean for the city’s finances. Our research found that development on the edge of town would generate about $165,000 for the city each year. The same development, if located downtown, would generate at least $428,000 per year for the city—and potentially as much as $788,000 per year if walkable places’ higher property values were factored in.
These results are similar to those from Madison and West Des Moines: building in compact, more walkable ways benefit a city’s bottom line. These strategies reduce the cost of infrastructure and services, while also generating more tax revenue per acre. The only question is, how much would your city gain with a smart growth approach?
In early April, Smart Growth America released a new model for analyzing the fiscal performance of urban development. The City of Madison, WI, was the first city to use the new model in their development planning.
Today we’re proud to release new analysis of development patterns in West Des Moines, IA. The new research examines four different strategies for West Des Moines’ growth over the next 20 years. Each scenario assumes the development of 9,275 housing units and 2.69 million square feet of commercial space, which is in keeping with West Des Moines’ current growth.
The four scenarios have different densities and a different mix of home types. A “base density” scenario approximates the average density of development in West Des Moines today; a “low density” and “higher density” scenario represent incrementally lower, and higher development densities, respectively, than the base. And a “walkable urban” scenario has the highest density of all scenarios considered and represents a more dramatic departure from the typical development pattern in West Des Moines (though does not propose any high-rise development).
The model calculates average annual public costs for each scenario. Our researchers subtract that from the average annual public revenues generated by each scenario. The result is the net fiscal impact of each type of development.
A smart growth approach can help municipalities support their long term financial health, and a new tool will help local leaders understand specific ways this approach can help their community.
The Fiscal Implications of Development Patterns, released today by Smart Growth America and real estate advisors RCLCO, is a new model for analyzing the fiscal performance of urban development.
It is designed to help towns, cities, and counties understand what financial returns their development currently generates—and what strategies could generate better returns in the future.
This new model is unique in that it is sensitive to both geography and density. We allow municipal costs per capita to vary based on these factors.
Join today’s kickoff event
Smart Growth America will be presenting this new tool at a live event today at 2:00 PM EDT in Madison, WI. The event will also be live streamed on the web, and we invite you to watch.
Madison is the first city in the country to use our new model, and today’s event will also include a demonstration of how the model applies to Madison’s development specifically.
Smart Growth America is always working to help towns and cities better understand the impacts of their development choices. Our new model is the most recent in this line of work and we look forward to sharing it with you. Join us later today to learn all about the new resource.
P.S.—Want to conduct this analysis in your town, city, or county? Contact us to learn about our consulting services.
Madison, WI, is the first city to use a forthcoming analysis model from Smart Growth America and RCLCO.
Every town and city makes decisions about how to grow and what kind of development to build. These decisions shape entire neighborhoods, and form the foundation of American communities as we know them.
These decisions also impact a city’s finances. Some development patterns generate net revenue, others run a deficit. A smart growth approach can help cities build in ways that support long term fiscal health, and a new tool will help local leaders understand specific ways this approach can help their community.
Next week Smart Growth America and RCLCO will unveil a new model for analyzing the fiscal performance of urban development. This new model will be applicable in every town or city across the country, and is designed to help cities understand what financial returns their development currently generates—and what strategies could generate better returns in the future.