Growing

Wealthier
ith the
pace of economic recovery uncertain
and the real estate market still uneven,
developers, policy makers and trans-
portation professionals seek information
to guide their investments. At the same
time, market analysis reveals pent-up
demand for walkable communities
driven by demographic changes poised
to transform the real estate industry.
In our new report, Growing Wealthier:
Smart Growth, Climate Change and
Prosperity, the Center for Clean Air
Policy (CCAP) considers ten common-
sense principles that can help guide new
development in ways that respond to
emerging market demand and bolster
Smart Growth, the economy. We find that an inclu-
Climate Change sive planning process following smart
growth principles that yields more
and Prosperity walkable neighborhoods with broader
options for housing and transportation
can help communities, businesses and
Chuck Kooshian individuals make money, save money
Steve Winkelman and improve quality of life (Table 1).

Center for In Growing Wealthier we provide

Clean Air Policy
January 2011 examples and studies from around the
Table 1. Highlights of Smart Growth Economic Benefits

Business Household Municipal & Regional National

Return on Investment

Access to new markets Enhance or preserve Higher public revenues More efficient use of
housing values transportation
Reduced investment risks Reduced citizen opposition
investments
Better access to jobs to development
Construction & transit jobs
Construction & transit jobs
Attracts private investment
Higher property values
More efficient economy
Productivity enhancements
due to agglomeration

Savings on Expenditures

Employee health care Save on travel costs Infrastructure savings Energy security
savings (construction & operation)
Reduced energy & water use Health care savings
Better information & Reduced costs from
Health care savings
decision making urban decline
Lower taxes for infrastructure
Reduced parking Green infrastructure
services
requirements (such as natural filtration)
replaces gray infrastructure
Reduced energy & water use

Improved Quality of Life

Quality places attract high Better access to services Reduced exposure to Reduced GHGs
quality workers congestion
Affordable housing
Improved environment for Thriving public spaces
Access to nature &
small businesses
recreation Growth reflects community
values
Increased physical activity
Protects natural resources

country, as well as an annotated bibliography of evidence

“CCAP is a strong, credible, influential voice on issues of on smart growth, climate change, the economy, and sus-
transportation and climate change. This is another must- tainability. We challenge popular notions about driving
read report.” and prosperity, considering standard economic indica-
- Dan Sperling, Director, Institute of Transportation tors as well as livability concerns such as public health
Studies, University of California, Davis
and well being, community vibrancy and resource sus-
“Growing Wealthier cuts to the chase by defining the tainability. We show that reducing daily driving by just
benefits of smart growth in dollars and cents. This is two and half miles per person, in concert with vehicle
long overdue and provides the framework for problem and fuel improvements, can put the transportation sector
solving in a language everyone understands.” on path to meeting climate goals.
- John Inglish, CEO Utah Transit Authority

“Growing Wealthier will help equip communities to thrive

Smart Growth, Driving and Economic Health
in the emerging real estate market demanded by the Transportation is vital to the production and exchange
knowledge economy.” of goods and services. But in our transforming econ-
- Christopher B. Leinberger, real estate developer, author omy, economic activity can happen in myriad of ways;
of The Option of Urbanism vehicles and people in motion are only a part of a much
greater whole. Although vehicles miles traveled (VMT)
 Figure 3. Historical Growth of Total On-road VMT and GDP Figure 4: Travel Intensity of the US Economy: VMT per $1,000 GDP
350
(1970-2030)
180

280
150

GDP Index
120 210
VMT Index
Historical Forecast
90
1990=100%
140

60

70
30

0
1970 1980 1990 2000 2010 2020 2030
1960 1970 1980 1990 2000 2010

Figure 5: U.S. Household VMT and Income (1967-2008) Figure 7. Per capita GDP and VMT for US States (2008)

1.70

1.60

Average Household VMT

1.50
Average Household Income
1.40

1.30

1.20 Median Household Income

1.10

1967=1.00
1967 1972 1977 1982 1987 1992 1997 2002 2007

rose along with gross domestic product for decades there negative relationship between vehicle travel and produc-
is now evidence that the relationship is changing (Figure tivity; that is, many states with higher VMT per capita
3). According to U.S. Chamber of Commerce analysis, actually performed worse economically that those with
the importance of travel as a component of the economy lower rates of driving (Figure 7).
has been declining since the early 1990s, and is expected
to continue to decline through 2030 (Figure 4). Ten common-sense principles that many urban planners,
public officials, real estate professionals, architects and
As VMT increases along with fuel and other vehicle costs, designers subscribe to, can guide new development in
the hit to the household budget expands, so that today ways that improve accessibility and alleviate many of the
transportation and housing together take about half of problems of sprawling land use, while enhancing qual-
every dollar earned. While vehicle travel per household ity of life. Three rigorous studies in the past few years
increased by 70% from 1969 to 2001, incomes for 60% found that communities following smart-growth strate-
of American households increased only 18%. These gies either have succeeded in, or have the potential to, re-
Americans drove substantially more, but did not share duce their citizens’ driving up to 60 percent. In Growing
proportionately in income growth (Figure 5). CCAP has Wealthier we walk through each smart growth principle,
dubbed travel that contributes little or nothing to the identifying a variety of economic and prosperity benefits.
economy “empty miles”. At the state level, we found a Following are some key examples.
 For more information and references, please download
the full report: www.growingwealthier.info

Economic Benefits: Real-world Snapshots Recommendations

Creating a range of housing opportunities in proxim- Do. Measure. Learn. To realize the full prosperity ben-
ity to jobs saves households money. Washington DC efits of smart growth, we need incentive-based policy
region households living in the jobs-rich core spent programs centered on the themes of action, measure-
about 30% of their income on housing and transpor- ment, and analysis.
tation, while those in the car-dependent outer suburbs Equip and Empower. Transportation practitioners need
spent over 40%. new tools and technical assistance to enhance their
Improving neighborhood “walkability” enhances ability to implement and evaluate smart growth and
property values. WalkScore.com rates locations ac- travel efficiency policies and their economic impacts.
cording to a walkability index from 1 to 100. One This would be an important role for federal agencies,
study found that, in general, every one-point increase such as US DOT.
in a home’s Walk Score raised its value by $700 to Do More Get More. Government programs should
$3,000. reward communities that make efficient use of re-
Walkability also enhances health. In Seattle, a 5% in- sources to promote economic and environmental sus-
crease in the overall level of walkability was linked to tainability.
a 32% increase in minutes of walking or biking and a Empirical Research. There is a solid foundation of
reduction in Body Mass Index. research on the economic effects of smart growth
Creating a range of transportation options can in- but much remains to learn. The federal government
crease property values, investment and jobs. In should increase funding for such research and provide
Denver, homes within a half mile of stations on the support for evaluating pilot projects and innovative
Southeast light rail line rose in value an average of policies.
17.6% between 2006 and 2008; other Denver homes Ask the Sustainability Question. Ask ourselves, “Does
declined by an average 7.5%. American Recovery this infrastructure or land development decision pro-
and Reinvestment Act investments in public trans- mote long-term environmental and economic health
portation created almost twice as many jobs per bil- in an equitable way?”
lion dollars invested as highway projects – 16,419
vs. 8,781 job-months. A $100 million investment
in Portland streetcars helped attract $3.5 billion in “Growing Wealthier continues filling the knowledge
private investment. gap on the ‘third leg’ and identifies the important smart
growth principles that will be necessary to address
Directing development towards existing communities
greenhouse gas emissions in the transportation sector
can reduce infrastructure costs. Sacramento calcu- while improving economic activity.”
lated the infrastructure price tag of their Blueprint - John J. Viera, Director, Sustainability &
Smart Growth scenario to be $9 billion less than Environmental Policy, Ford Motor Company
conventional development.
Building within a smaller footprint can reduce water “Kooshian and Winkelman make a clear and
convincing case that as we develop our communities,
use and improve storm water runoff management. A
doing the right thing for the climate can do the right
2006 EPA report found that in a compact subdivi- thing for the economy.”
sion in Sacramento, California, water demand was - Mike McKeever, Executive Director, Sacramento
20-30% less than conventional subdivisions in the Area Council of Governments
same city.
Reducing the need to drive saves big money. The Vision “Growing Wealthier sheds important light on how smart
growth policies can enhance prosperity and quality of
California project calculated that a “green” compact
life while reducing greenhouse gas emissions.”
growth scenario could save California residents $8,600 - Mary Nichols, Chairman, California Air Resources
in driving related costs per household by the year 2050, Board
or more than $170 billion annually statewide.