Analyzing the economic benefits and costs of smart growth

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California Air Resources Board


California’s Senate Bill 375, (Chapter 728, Statutes of 2008), aims to reduce transportationrelated greenhouse gas emissions through more efficient patterns of land development. Advocates claim these smart growth policies will reduce vehicle travel while benefitting residents, cities, and regions in the form of more attractive communities, more affordable housing, and healthier municipal finances. In this study, we analyzed the economic impacts of existing smart growth plans similar to those currently being considered and adopted throughout metropolitan California. Through five case studies of neighborhood-level plans already implemented in California, we examined the effects of smart growth interventions on residential development, commercial development, municipal budgets, and vehicle travel. We used a combination of quantitative and qualitative methods to estimate the net benefits and costs from the regional, municipal, and household perspectives. We found the plans, in most cases, produced net benefits for the stakeholders considered. The benefits emerged from plans that resulted in denser development in relatively central locations with good access to transit. However, in some cases the plans produced costs, and impacts were not evenly distributed. The research suggests smart growth policies can produce benefits, but planners must be aware of potential costs.